Stifel initiated coverage on Cytokinetics Incorporated (NASDAQ:CYTK), noting the company’s catalyst rich one to two years.

The M&A speculation ramped up in early 2024 after the company released SEQUOIA-HCM Phase 3 trial data of aficamten in December 2023. However, last year, Novartis AG (NYSE:NVS) decided to step back from pursuing the Cytokinetics deal.

Amgen Inc (NASDAQ:AMGN), AstraZeneca Plc (NASDAQ:AZN), and Johnson & Johnson (NYSE:JNJ) also all popped up as potential suitors, though the stock faded from there as a deal never materialized.

Also Read: Cytokinetics Sets Stage For Mid-Stage Study For Heart Failure Drug After Encouraging Data From Phase 1 Study

Cytokinetics has fallen out of favor with investors after a turbulent start to 2024, marked by a controversial Royalty Pharma Plc (NASDAQ:RPRX) deal and no mergers or acquisitions.

Investors poorly received the structure of the Royalty Pharma deal at the time, and it continues to be a concern for many even today.

Stifel has initiated coverage with a Buy rating and a price forecast of $80. However, the outlook appears promising, with its valuation adjusted and several catalysts expected over the next 12+ months.

Stifel analyst James Condulis writes Cytokinetics’ aficamten is an exceptional drug as it sets a strong competitive standard for a multi-billion-dollar obstructive hypertrophic cardiomyopathy (oHCM) market.

As the rollout of Bristol Myers Squibb Co’s (NYSE:BMY) Camzyos mavacamten continues, some concerns remain about its potential in treating obstructive hypertrophic cardiomyopathy (oHCM).

While the initial launch is not seen as a negative sign for mavacamten’s potential, its Risk Evaluation and Mitigation Strategy (REMS) is a barrier to fully unlocking the market.

Cytokinetics appears well-positioned to capitalize on Bristol Myers’ groundwork with its second-to-market drug, aficamten, which is expected to have a best-in-class profile. There is a strong case for aficamten to secure a differentiated REMS, potentially including six-month echocardiograms (Q6M echos) as a standard.

Under conservative assumptions, aficamten could drive the U.S. oHCM market to approximately $3 billion.

Looking ahead to 2025 and 2026, Phase 3 nHCM data and early findings for HFpEF could present new opportunities. Although mergers and acquisitions are not a key focus, potential strategic interest could bring unexpected benefits.

Price Action: CYTK stock is up 3.45% at $47.40 at last check Wednesday.

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This article Cytokinetics Heart Drug's Future Sparks Optimism Despite M&A Hurdles and Royalty Deal Concerns: Analyst originally appeared on Benzinga.com

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