Cytokinetics Announces Inducement Grants Under Nasdaq Listing Rule 5635(c)(4)

Rhea-AI Summary

Cytokinetics announced inducement grants under Nasdaq Listing Rule 5635(c)(4) on June 4, 2024. The company granted stock options, RSUs, and PSUs to its new CFO, Sung H. Lee, and 12 other employees. Sung H. Lee received 53,417 stock options, 34,684 RSUs, and 34,426 PSUs, while the other employees were granted 93,525 stock options, 60,724 RSUs, and 40,610 PSUs. The RSUs will vest over three years, and stock options will vest over four years with an exercise price of $48.51 per share. PSUs will vest based on achieving performance goals. All grants are inducements for employment.

Positive

• Grant of 53,417 stock options, 34,684 RSUs, and 34,426 PSUs to new CFO Sung H. Lee.
• Grant of 93,525 stock options, 60,724 RSUs, and 40,610 PSUs to 12 new employees.
• RSUs will vest over three years, encouraging long-term employee retention.
• Stock options have a 10-year term, offering long-term value potential.
• PSUs based on performance goals, aligning employee incentives with company success.

Negative

• The exercise price for stock options set at $48.51, which might be high given current market conditions.
• Long vesting periods (three years for RSUs and four years for stock options) may not be attractive to all employees.
• Performance goals for PSUs may be challenging to achieve, adding uncertainty to the value of these grants.

SOUTH SAN FRANCISCO, Calif., June 04, 2024 (GLOBE NEWSWIRE) -- Cytokinetics, Incorporated (Nasdaq: CYTK) today announced that on May 31, 2024 it granted stock options to purchase an aggregate of 53,417 shares of common stock, 34,684 restricted stock units (RSUs) that will be settled in shares of common stock upon vesting and 34,426 performance stock units (PSUs) that, if earned, will be settled in shares of common stock upon vesting to Sung H. Lee, the Company’s Executive Vice President and Chief Financial Officer, whose employment commenced on May 8, 2024, as a material inducement to his employment.

The Company also granted stock options to purchase an aggregate of 93,525 shares of common stock, 60,724 RSUs that will be settled in shares of common stock upon vesting and 40,610 PSUs that, if earned, will be settled in shares of common stock upon vesting to an additional 12 employees, whose employment commenced in May 2024, as a material inducement to their employment.

The RSUs will vest over 3 years, with 40% of the RSUs vesting on the first anniversary of the applicable grant date, an additional 40% of the RSUs vesting on the second anniversary of the grant date and the final 20% vesting on the third anniversary of the grant date, in each case, subject to each respective employee’s continued service with the Company. The stock options that were granted are subject to an exercise price of $48.51 per share, which is equal to the closing price of the Company’s common stock on May 31, 2024, and will vest over 4 years, with 1/4^th of the shares underlying the employee’s option vesting on the one-year anniversary of the grant date and the remaining shares thereafter vesting in monthly installments at a rate of 1/48th of the shares underlying such stock options over the subsequent 36 months, subject to each respective employee’s continued service with the Company. The stock options have a 10-year term. The PSU award is subject to two performance goals and will be earned as to up to 50% of the number of shares subject to the PSU award upon the certification by Compensation and Talent Committee of the Company’s Board of Directors (Committee) that the Company has achieved the first performance goal and as to up to 50% of the number of shares subject to the PSU award upon the certification by the Committee that the Company has achieved the second performance goal. The earned shares will vest as to 50% of the earned shares on applicable Committee certification date and as to 50% of the earned shares following the one-year anniversary of the applicable Committee certification date, subject to the respective employee’s continued service with the Company. These awards are subject to the terms and conditions of the Company's Amended and Restated 2004 Equity Incentive Plan and the applicable award agreements pursuant to which the awards were granted.  

The stock options, RSUs and PSUs were granted as material inducements to employment in accordance with Nasdaq Listing Rule 5635(c)(4).

About Cytokinetics

Cytokinetics is a late-stage, specialty cardiovascular biopharmaceutical company focused on discovering, developing and commercializing first-in-class muscle activators and next-in-class muscle inhibitors as potential treatments for debilitating diseases in which cardiac muscle performance is compromised. As a leader in muscle biology and the mechanics of muscle performance, the company is developing small molecule drug candidates specifically engineered to impact myocardial muscle function and contractility. Cytokinetics is preparing for regulatory submissions for aficamten, its next-in-class cardiac myosin inhibitor, following positive results from SEQUOIA-HCM, the pivotal Phase 3 clinical trial in obstructive hypertrophic cardiomyopathy. Aficamten is also currently being evaluated in MAPLE-HCM, a Phase 3 clinical trial of aficamten as monotherapy compared to metoprolol as monotherapy in patients with obstructive HCM, ACACIA-HCM, a Phase 3 clinical trial of aficamten in patients with non-obstructive HCM, CEDAR-HCM, a clinical trial of aficamten in a pediatric population with obstructive HCM, and FOREST-HCM, an open-label extension clinical study of aficamten in patients with HCM. Cytokinetics is also developing omecamtiv mecarbil, a cardiac muscle activator, in patients with heart failure. Additionally, Cytokinetics is developing CK-586, a cardiac myosin inhibitor with a mechanism of action distinct from aficamten for the potential treatment of HFpEF, and CK-136, a cardiac troponin activator for the potential treatment HFrEF and other types of heart failure, such as right ventricular failure resulting from impaired cardiac contractility.

For additional information about Cytokinetics, visit www.cytokinetics.com and follow us on X, LinkedIn, Facebook and YouTube.

Forward-Looking Statements

This press release contains forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995 (the "Act"). Cytokinetics disclaims any intent or obligation to update these forward-looking statements and claims the protection of the Act's Safe Harbor for forward-looking statements. Examples of such statements include, but are not limited to, statements relating to Cytokinetics' and its partners' research and development activities of Cytokinetics’ product candidates. Such statements are based on management's current expectations, but actual results may differ materially due to various risks and uncertainties, including, but not limited to the risks related to Cytokinetics' business outlined in Cytokinetics' filings with the Securities and Exchange Commission particularly under the caption “Risk Factors” in Cytokinetics’ latest Annual Report on Form 10-K. Forward-looking statements are not guarantees of future performance, and Cytokinetics' actual results of operations, financial condition and liquidity, and the development of the industry in which it operates, may differ materially from the forward-looking statements contained in this press release. Any forward-looking statements that Cytokinetics makes in this press release speak only as of the date of this press release. Cytokinetics assumes no obligation to update its forward-looking statements whether as a result of new information, future events or otherwise, after the date of this press release.

CYTOKINETICS® and the CYTOKINETICS and C-shaped logo are registered trademarks of Cytokinetics in the U.S. and certain other countries.

Contact:
Cytokinetics
Diane Weiser
Senior Vice President, Corporate Affairs
(415) 290-7757

FAQ

What are the details of the stock options granted by Cytokinetics on May 31, 2024?

Cytokinetics granted stock options to purchase an aggregate of 53,417 shares to Sung H. Lee and 93,525 shares to 12 other employees, with an exercise price of $48.51 per share.

How will the RSUs granted by Cytokinetics vest?

The RSUs will vest over three years: 40% on the first and second anniversaries, and 20% on the third anniversary of the grant date.

What are the vesting conditions for the PSUs granted by Cytokinetics?

PSUs will vest based on achieving performance goals set by the Committee, with 50% vesting upon certification of each goal, and the remaining 50% one year after certification.

What is the tenure of the stock options granted by Cytokinetics?

The stock options have a 10-year term.

When did Sung H. Lee start his role at Cytokinetics?

Sung H. Lee began his employment on May 8, 2024.