Cytokinetics, Incorporated 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 in the first quarter of 2026.

Our financial statements contemplate the conduct of our operations in the normal course of business. We have incurred an accumulated deficit of approximately $3.7 billion since inception and there can be no assurance that we will attain profitability. We had a net loss of $206.0 million and net cash used in operations of $145.5 million for the three months ended March 31, 2026. Cash, cash equivalents, and investments was $1.1 billion as of March 31, 2026. 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 commenced 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 achieve profitable operations, we intend to continue to fund operations through payments from strategic collaborations, additional sales of equity securities, 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 this Quarterly Report on Form 10-Q. 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.

Reclassification of prior periods

Certain comparative figures have been reclassified to conform to the current period presentation. Specifically, $1.6 million previously reported research and development expenses in the three months ended March 31, 2025 has been reclassified to collaboration cost of revenues. These reclassifications had no effect on the previously reported total assets, total liabilities, or net income.

Net Product Revenue

Our first commercial product MYQORZO® (aficamten), was approved by the FDA in December 2025. 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 intended to support a favorable benefit-risk profile in light of the risk of heart failure due to systolic dysfunction. In patients with oHCM, myosin inhibition with MYQORZO reduces cardiac contractility and left ventricular outflow tract obstruction. The Company enters into agreements with specialty pharmacies and specialty distributors (each a “Customer” and collectively the “Customers”) to sell MYQORZO in the United States. Revenues from product sales are recognized when the Customer obtains control of the Company’s product, which occurs at a point in time, typically upon delivery to the Customer.

Revenue is recorded net of variable consideration, which includes prompt pay discounts, returns, chargebacks, rebates, and co-payment assistance. These deductions to product sales are referred to as gross-to-net deductions and are estimated and recorded in the period in which the related product sales occur. The variable consideration is estimated based on contractual terms as well as management assumptions. The amount of variable consideration is calculated by using the expected value method. Estimates are reviewed quarterly and adjusted as necessary. Taxes assessed by governmental authorities and collected from customers are excluded from product sales.

Accruals are established for gross to net deductions and actual amounts incurred are offset against applicable accruals. The Company reflects these accruals as either a reduction in the related account receivable from the customer or as an accrued liability, depending on the means by which the deduction is settled. Sales deductions are based on management’s estimates that involve a substantial degree of judgment.

Prompt Pay and Distributor Fees: Customers receive a prompt pay discount for payments made within a contractually agreed number of days before the due date. Customers may receive a contractually agreed upon distribution fee. Both of these discounts are accounted for as a reduction of the transaction price and recorded as a contra receivable.

Returns: We typically permit returns if the product is damaged, defective, or otherwise cannot be used by the customer. We typically permit returns six months prior to and up to one year after the product expiration date. The Company records allowances for product returns as a reduction of revenue at the time product sales are recorded. Product returns are estimated based on industry data. A returns reserve is recorded as an accrued liability.

Rebates and Chargebacks: Rebates and chargebacks include amounts due to payers and healthcare providers under various programs based on contractual arrangements or statutory requirements, which may vary by payer and individual plans. Providers qualified under certain programs can purchase our products through our specialty pharmacies and distributors at a discount. The specialty pharmacies or distributors then charge the discount back to us.

Rebates and chargebacks are estimated primarily based on product sales, historical and estimated payer mix and discount rates, among other inputs, which require significant estimates and judgment. Since we launched our first commercial product in the first quarter of 2026, we do not have historical data and we are relying on industry information. We assess and update our estimates each reporting period to reflect actual claims and other current information.

Co-Payment Assistance: Co-payment assistance programs are offered to eligible end-users as price concessions and are recorded as accrued liabilities and a reduction of the transaction price. The Company uses a third-party to administer the co-payment program for pharmacy benefit claims. Our accrual for co-pay assistance programs is based on an estimate of claims and the cost per claim that we expect to receive associated with inventory that exists in the distribution channel at period end.

Inventories

Inventories, which consist of raw materials, work in process and finished goods, are stated at the lower of cost or estimated net realizable value, using standard costs, based on a first-in, first-out method. We have entered into manufacturing and supply agreements for the manufacture or purchase of raw materials and production supplies in prior years. Our inventories include the direct purchase cost of materials and supplies, charges from contract manufacturing organizations and manufacturing overhead costs. We will periodically review our inventories for factors that could impact the future recoverability and realization of future sales, which require estimates and judgments. We will analyze our inventory levels quarterly and write down inventories subject to expiry, in excess of expected requirements or that has a cost basis in excess of its expected net realizable value. These write downs will be charged to cost of sales in the accompanying consolidated statements of operations and comprehensive loss.

We received FDA approval for MYQORZO on December 19, 2025 and began capitalizing inventories upon FDA approval. Costs incurred prior to approval have been recorded as research and development expense in our consolidated statement of operations and comprehensive loss. As a result, inventory balances and cost of sales for the next several quarters are expected to reflect a lower average per unit cost of materials.