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Here’s Why Cytokinetics is Plunging Tuesday (CYTK)

2575598759_f2109d9152_zShares of Cytokinetics (NASDAQ: CYTK) is plunging Tuesday morning after it announced that an experimental heart drug it was developing with Amgen (NASDAQ: AMGN) had not met its primary endpoint of improving shortness of breath symptoms but did show favorable dose and concentration trends on dyspnea response.

To investors, the big words don’t change the fact that the drug failed to adequately treat the primary symptom it was indicated for and that’s why the stock is down 16 percent in early trading.

But investors might be overreacting. Amgen said that it would continue testing an oral version of the drug in a separate Phase II study and those results would indicate whether it progresses to Phase III trials or the company gives up on the drug.

Some analysts, are saying that based on the data provided, the drug could warrant phase III testing.

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Disclosure: At the time of this writing, the author had no position in the company mentioned.

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