Company: CYTK
Filing Date: 2025-05-06
Form Type: 10-Q
Source: 0000950170-25-064529
Chunk: 7

Company: CYTOKINETICS INC
Filing Date: 2025-05-06
Form: 10-Q
Item: Part I, Item 3
Chunk 7
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Our exposure to market risk has not changed materially since our disclosures in "Item 7A —Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2024, except for the following:

Interest Rate Risk

We are exposed to market risk related to changes in interest rates. As of March 31, 2025, our cash and investments totaled $1.1 billion, comprising U.S. Treasury securities, U.S. and non-U.S. government agency bonds, commercial paper, a global portfolio of corporate debt, money market funds, and repurchase agreements backed by U.S. Treasury securities.

Our investments are subject to interest rate risk and could fall in value if market interest rates increase. We have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. A hypothetical 1% increase in market interest rates would result in a decline in the value of our investments of approximately $5.4 million and $6.1 million as of March 31, 2025 and December 31, 2024, respectively. 

In addition, we have elected the fair value option for certain liabilities. The fair value of the liabilities related to 2024 RP OM Loan Agreement, the RP CK-586 RPA, and the derivatives of the RP Multi Tranche Loan Agreement will increase as market interest rates decrease. In addition, the fair value of the liabilities may fluctuate based upon changes in the Company’s credit rating. Changes in the interest rate environment and the credit rating of the Company could have an effect on our future earnings. For example, a hypothetical 1% decrease in the discount rates used to measure the 2024 RP OM Loan Agreement, the RP CK-586 RPA, and the derivatives of the RP Multi Tranche Loan Agreement would result an increase in the fair value, and the recognition of a loss, of approximately $5.6 million as of March 31, 2025. During the three months ended March 31, 2025, we recognized a gain on the change in the estimated fair value of liabilities of approximately $3.9 million, primarily due to changes in the discount rates used to measure the 2024 RP OM Loan Agreement and the RP CK-586 RPA. The discount rates ranged from 12% to 18% as of March 31, 2025, compared to 10% to 18% as of December