CYTOKINETICS INC

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 — Organization and Significant Accounting Policies

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. In addition, in February 2026, the European Commission approved MYQORZO® (aficamten), 5 mg, 10 mg, 15 mg and 20 mg tablets for the treatment of symptomatic (New York Heart Association, NYHA, class II-III) oHCM in adult patients and which first became available for prescription to patients in Germany in the second quarter of 2026. Moreover, in December 2025, the China National Medical Products Administration approved MYQORZO for the treatment of adults with (New York Heart Association class II-III) oHCM, to improve exercise capacity and symptoms. MYQORZO first became available to patients in China in the first quarter of 2026 under the Sanofi License Agreement.

Our financial statements contemplate the conduct of our operations in the normal course of business. We have incurred an accumulated deficit of approximately$3.9 billion since inception and there can be no assurance that we will attain profitability. We had a net loss of$404.8 million and net cash used in operations of$305.3 million for the six months ended June 30, 2026. Cash, cash equivalents, and investments was$1.7 billion as of June 30, 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.

Basis of Presentation

Our condensed consolidated financial statements include the accounts of Cytokinetics and our wholly-owned subsidiaries. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with GAAP for interim financial information and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The financial statements include all adjustments (consisting only of normal recurring adjustments) that management believes are necessary for the fair statement of our financial information. These interim results are not necessarily indicative of results to be expected for the full fiscal year or any future interim period. The balance sheet as of December 31, 2025 has been derived from the audited financial statements at that date but does not include all of the information and footnotes required by GAAP for complete financial statements. The interim condensed financial statements should be read in conjunction with the audited financial statements and notes thereto contained in the Company’s Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission.

Reclassification of prior periods

Certain comparative figures have been reclassified to conform to the current period presentation. Specifically, $2.4 million and $4.0 million previously reported research and development expenses in the three and six months ended June 30, 2025, respectively, have been reclassified to collaboration cost of revenues. These reclassifications had no effect on the previously reported total assets, total liabilities, or net income.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. We evaluate our estimates on an ongoing basis. We base our estimates on our historical experience and on assumptions that we believe are reasonable; however, actual results could significantly differ from those estimates.

Investment in non-marketable equity security

During the first quarter of 2025, we made an equity investment of $5.0 million that does not have a readily determinable fair value. We have elected the measurement alternative under which we measure the investment at cost, less any impairment. If we observe price changes in orderly transactions for identical or similar securities of the same issuer, we will remeasure the investment at fair value as of the date of the observable transaction. As of June 30, 2026, the investment has a carrying value of $5.0 million and is classified as “Other assets” on the condensed consolidated balance sheet.

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 and Europe. 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.

The Company generates revenue from a small number of specialty pharmacies and specialty distributors. The following customers accounted for over 10% of total gross product revenue during thethree and six months ended June 30, 2026. As the Company launched MYQORZO in January 2026, there were no sales in prior periods.

Accounts Receivable, net

The Company's trade accounts receivable arise from product sales and represent amounts due from its customers. In addition, the Company records accounts receivable arising from its collaboration and licensing agreements. The Company provides allowances against receivables for estimated losses, if any, that may result from a counterparty's inability to pay. Amounts determined to be uncollectible are written-off against the allowance.

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 goods sold 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 goods sold for the next several quarters are expected to reflect a lower average per unit cost of materials.

Note 2 — Net Loss Per Share

The following instruments were excluded from the computation of diluted net loss per share for the periods presented because their effect would have been antidilutive (in thousands):

During the three months ended June 30, 2026, holders converted the remaining $21.1 million aggregate principal amount of the 2026 Notes into 2,002,817 shares of the Company'scommon stock. There areno outstanding 2026 Convertible Notes as of June 30, 2026.

Note 3 — Agreements with Royalty Pharma

On January 7, 2022, we entered into the 2022 RPI Transactions with affiliates of Royalty Pharma International plc. Pursuant to the 2022 RPI Transactions, the RP Multi Tranche Loan Agreement and the RP Aficamten RPA described below, are determined to be debt instruments subsequently measured at amortized cost and were entered into with parties that were at the time of our entry into the 2022 RPI Transactions affiliated and in contemplation of one another. We used the relative fair value method and made separate estimates of the fair value of each freestanding financial instrument and then allocated the proceeds in proportion to those fair value amounts. Arrangement consideration for the RP Multi Tranche Loan Agreement and the RP Aficamten RPA totaled $150 million, consisting of the two $50 million up front payments for the signing of the RP Multi Tranche Loan Agreement and the RP Aficamten RPA and milestone of $50 million for the initiation of the first pivotal trial in oHCM for aficamten that was deemed probable at the signing of the agreements.

On May 22, 2024, we entered into the 2024 RPI Transactions with affiliates of Royalty Pharma International plc, which included an amendment to the RP Aficamten RPA, a component of the 2022 RPI Transactions. The 2024 RPI Transactions include the 2024 RP OM Loan Agreement, the RP Ulacamten RPA, the RP Stock Purchase Agreement, the RP Multi Tranche Loan Agreement Amendment and the RP Aficamten RPA Amendment, as described below, are accounted for as a debt modification of the 2022 RPI Transactions.

Liabilities Related to RPI Transactions Measured at Fair Value

As permitted under ASC 825, we elected the fair value option for recognizing the liabilities related to the 2024 RP OM Loan Agreement and the RP Ulacamten RPA. The fair value option was elected because these liabilities included embedded derivatives which would have otherwise required separate recognition and measurement. The Company elected the fair value option as it is believed to be more practical for each liability as a single unit of account at fair value. Under the fair value option, debt issuance costs are expensed as incurred and the Company is required to record the fair value option elected arrangements at their fair value on the date of issuance and at each balance sheet thereafter. Changes in the estimated fair value of the arrangements are recognized as changes in fair value of liabilities related to RPI Transactions in the condensed consolidated statement of operations and comprehensive loss.

Accounting for RPI Transactions Measured at Fair Value

The fair values of the liabilities for the RP OM Loan Agreement and RP Ulacamten RPA are based on significant unobservable inputs, including the probability of clinical success and regulatory approval based on historical industry success rates for product development specific to cardiovascular products, the estimated date of a product launch, estimates of pricing, sales ramp, variables for the timing of the related events, probability of change of control, and discount rates (which ranged from 14% to 17% and 12% to 17% for the three and six months ended June 30, 2026, respectively, and 10% to 18% for the three and six months ended June 30, 2025), which are deemed to be Level 3 inputs in the fair value hierarchy. As products containing omecamtiv mecarbil and ulacamten have not yet been commercialized, the estimates are highly subjective. For example, assumed increases in the probability of the clinical success for the omecamtiv mecarbil or ulacamten programs could increase the value of the liabilities. Similarly, assumed decreases in the discount rates used in the fair value measurements could also increase the value of the liabilities at period end.

The Company recorded a gain of$2.4 million and$0.8 million for the three and six months ended June 30, 2026, respectively, and a loss of$14.6 million and$10.7 million for the three and six months ended June 30, 2025, respectively, associated with thechange in fair value of the liabilities related to 2024 RP OM Loan Agreement and the RP Ulacamten RPA. The change in the fair value has been recognized in the condensed consolidated statement of operations and comprehensive loss.

The following tables summarize the changes of the fair value of the RP Ulacamten RPA and RP OM Loan (in thousands):

Liabilities Related to Revenue Participation Right Purchase Agreements

RP Aficamten Royalty Purchase Agreement

The carrying amount of the RP Aficamten Liability is based on our estimate of the future royalties to be paid to RPI ICAV over the life of the arrangement as discounted using an imputed rate of interest. In the second quarter of 2024, we recorded an additional $33.3 million to the carrying value related to the 2024 RPI Transactions entered into May 22, 2024. The imputed rate of interest on the carrying value of the RP Aficamten Liability was approximately 26.1% as of June 30, 2026 and 20.5% as of June 30, 2025.

2017 RP Omecamtiv Mecarbil Royalty Purchase Agreement

The carrying amount of the RP OM Liability is based on our estimate of the future royalties to be paid to RPFT over the life of the arrangement as discounted using an imputed rate of interest. The excess of future estimated royalty payments over the $92.3 million of allocated proceeds, less issuance costs, is recognized as non-cash interest expense using the effective interest method. The imputed rate of interest on the RP OM Liability is reassessed periodically and is not reduced below 0%. The imputed rate of interest on the carrying value of the RP OM Liability was 0.0% as of June 30, 2026 and 0.1% as of June 30, 2025.

Accounting for Revenue Participation Right Purchase Agreements

We periodically assess the amount and timing of expected royalty payments using a combination of internal projections and forecasts from external sources. The RP OM Liability and the RP Aficamten Liability are measured using the effective interest method based on estimates of future royalty payments over the life of the arrangements. To the extent such payments are greater or less than our initial estimates or the timing of such payments is materially different than itsoriginal estimates, we will prospectively adjust the amortization of the RP OM Liability and the RP Aficamten Liability and the effective interest rate. A significant change to unobservable inputs could also result in a material increase or decrease to the effective interest rate of the liabilities. Note, for the RP OM Liability, the effective interest rate is reassessed periodically and will not be reduced below 0%.

There are a number of factors that could materially affect the amount and timing of royalty payments, a number of which are not within our control. The RP OM Liability and the RP Aficamten Liability are recognized using significant unobservable inputs. The estimates of future royalties require the use of several assumptions such as: the probability of clinical success, the probability of regulatory approval, the estimated date of a product launch, estimates of eligible patient populations, estimates of prescribing behavior and patient compliance behavior, estimates of pricing, payor reimbursement and coverage, and sales ramp. A significant change in unobservable inputs could result in a material increase or decrease to the effective interest rate of the RP OM Liability and the RP Aficamten Liability.

We review our assumptions on a regular basis and our estimates may change in the future as we refine and reassess our assumptions. Changes to the RP Aficamten Liability and the RP OM Liability are as follows (in thousands):

Approximately $1.3 million of the RP Aficamten Liability balance is recorded in short term accrued liabilities based upon the royal ties currently due from the most recent quarter sales.

RP Multi Tranche Term Loan

Tranche 7 under the RP Multi Tranche Loan Agreement Amendment for $175.0 million is drawable at Cytokinetics’ discretion within one year of FDA approval of aficamten in oHCM.

As of June 30, 2026, the estimated fair value of the Tranche 1, Tranche 4, Tranche 5, and Tranche 6 term loans was$259.3 million. The fair value was estimated based on Level 3 inputs.

Derivative Liabilities Measured at Fair Value

We have bifurcated and recognized the embedded derivatives in the RP Multi Tranche Loan Agreement. These embedded derivatives include repayment features based upon a change in control.

The fair values of the derivative liabilities are determined using the probability-weighted expected return method and the “with and without” method. The fair values are based on significant unobservable inputs, including the probability of change of control, the probability of default (less than 10%), discount rates (ranging from 14% to 15% and 12% to 15% for the three and six months ended June 30, 2026, respectively, and 10% to 12% and 10% to 14% for the three and six months ended June 30, 2025, respectively) and other factors.

The following table summarizes the changes in the fair value of the derivative liabilities for the RP Multi Tranche Loan Agreement (in thousands):

Note 4 — Research and Development Arrangements

Collaboration for Commercialization of Aficamten in Greater China

Effective December 17, 2024, Sanofi has an exclusive license to develop and commercialize aficamten in China and Taiwan (the "Sanofi License Agreement"). The total maximum development and commercial milestone payments achievable for development and commercial milestone events in the field of oHCM and nHCM are $160.0 million, of which we have already earned $10.0 million in 2024 and $15.0 million in 2025, following regulatory approval of MYQORZO by the National Medical Products Administration ("NMPA") in China and the FDA in the United States. We are also entitled to receive tiered royalties in the low-to-high teens range on the net sales of pharmaceutical products containing aficamten in China and Taiwan, subject to certain reductions for generic competition, patent expiration and payments for licenses to third party patents.

The Sanofi License Agreement will, unless terminated earlier, continue on a market-by-market basis until expiration of the relevant royalty term.

Collaboration revenues for China were$0.8 million and$1.2 million for the three and six months ended June 30, 2026, respectively, related to certain development cost reimbursements, along with an insignificant amount of royalty revenue. Collaboration revenues werenot material for thethree and six months ended June 30, 2025. Accounts receivable from Sanofi was$0.4 million as of June 30, 2026 and$15.1 million as of December 31, 2025.

Collaboration for Commercialization of Aficamten in Japan

On November 19, 2024, we announced that we had entered into a collaboration and license agreement with Bayer Consumer Care AG, an affiliate of Bayer AG, for the exclusive development and commercialization of aficamten in Japan, subject to certain reserved development rights of Cytokinetics to continue to conduct certain clinical trials (the "Bayer License Agreement").

License and milestone revenues from Bayer was none and$11.9 million for the three and six months ended June 30, 2026, respectively, and$64.3 million for the three and six months ended June 30, 2025. The amount recognized in the six months ended June 30, 2026 relates to the milestone achievement of the first commercial sale of MYQORZO in the United States. Milestones associated with the first dosing of aficamten to the first patient in Japan in a Phase 3 clinical trial in nHCM and in a Phase 3 clinical trial in oHCM were achieved in 2025 and recognized as revenue in 2025. The first dose of aficamten in Japan in a Phase 3 clinical trial in nHCM occurred in June 2025 and the first dose of aficamten in Japan in a Phase 3 clinical trial in oHCM occurred in August 2025. There are no outstanding receivables related to license and milestone revenues from Bayer as of June 30, 2026.

The Company earned €10.0 million in the first quarter of 2026 and remains eligible to receive up to an additional €70.0 million upon achievement of development and commercial milestones. The Company is also eligible to receive up to an additional €490.0 million in commercial milestone payments upon the achievement of certain sales milestones, and tiered royalties on net sales of aficamten in Japan.

Collaboration revenues from Bayer were$2.5 million and$4.7 million for the three and six months ended June 30, 2026, respectively, and$2.4 million and$3.9 million for the three and six months ended June 30, 2025, respectively, related to certain research and development cost reimbursements. We had accounts receivable from Bayer of$2.5 million as of June 30, 2026, and$2.6 million as of December 31, 2025.

We re-evaluate the probability of achievement of development milestones and any related constraints each reporting period. We will include consideration, without constraint, in the transaction price to the extent it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

Research Collaboration

In May 2025, we entered into a research collaboration where we will reimburse our collaborative research partner for their research expenses. The reimbursement of research expenses was$1.5 million and$2.7 million for the three and six months ended June 30, 2026, respectively, which were recorded as research and development. There wasno reimbursement of research expe nses for the three and six months ended June 30, 2025. Subject to the terms of the agreement, our collaborative research partner may receive potential research, development and commercial milestone and royalty payments from us and we may develop and commercialize development candidates.

As of June 30, 2026, the collaborative partner under this collaboration provided a data package, which resulted in the achievement of a specified preclinical development milestone. Accordingly, the Company has recorded a liability of$2.5 million in accrued liabilities on the condensed consolidated balance sheet in anticipation of paying the milestone in the third quarter of 2026.

Note 5 — Fair Value Measurements

We value our financial assets and liabilities at fair value, defined as the price that would be received for assets when sold or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). We utilize market data or assumptions that we believe market participants would use in pricing the asset or liability, including assumptions about risk and the risks inherent in the inputs to the valuation technique. These inputs can be readily observable, market corroborated or generally unobservable.

We primarily apply the market approach for recurring fair value measurements and endeavor to utilize the best information reasonably available. Accordingly, we use valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible and consider the security issuers’ and the third-party issuers’ credit risk in our assessment of fair value.

We classify fair value based on the observability of those inputs using a hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement):

Level 1 — Observable inputs, such as quoted prices in active markets for identical assets or liabilities;

Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or through corroboration with observable market data; and

Level 3 — Unobservable inputs, for which there is little or no market data for the assets or liabilities, such as internally-developed valuation models.

Fair Value of Financial Assets:

The following tables set forth the fair value of our financial assets, which consists of cash equivalents and investments classified as available-for-sale securities, that were measured on a recurring basis (in thousands):

Investments in corporate debt securities, commercial paper, asset-backed securities and U.S. Government agency securities are classified as Level 2 as they are valued based upon quoted market prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuation techniques for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs obtained from various third-party data providers, including but not limited to benchmark yields, interest rate curves, reported trades, broker/dealer quotes and reference data.

No credit losses on debt securities were recognized in the periods presented. In its evaluation to determine expected credit losses, management considered all available historical and current information, expectations of future economic conditions, the type of security, the credit rating of the security, and the size of the loss position, as well as other relevant information. The unrealized losses as of June 30, 2026 are attributed to market interest rate changes and are not attributed to credit. The Company does not intend to sell any of these available-for-sale investments before their effective maturity or market price recovery.

Note 6 — Balance Sheet Components

Cash, cash equivalents, and restricted cash

A reconciliation of cash, cash equivalents, and restricted cash reported in the accompanying condensed consolidated balance sheets to the amount reported within the accompanying condensed consolidated statements of cash flows was as follows (in thousands):

As of June 30, 2026, the Company's restricted cash balance of$3.1 million is used to collateralize certain credit instruments.

Accounts receivable, net

Accounts receivable, net was as follows (in thousands):

Inventories were as follows (in thousands):

Inventories, long-term, are comprised of raw materials and work in process that are expected to be sold beyond the next 12 months.

Accrued liabilities

Accrued liabilities were as follows (in thousands):

Note 7 — Debt

Convertible Notes

2031 Notes

The following table presents the total amount of interest cost recognized relating to the 2031 Notes (in thousands):

The effective interest rate of the 2031 Notes was 2.23% as of June 30, 2026. As of June 30, 2026, the unamortized debt issuance cost for the 2031 Notes was$18.1 million and will be amortized over approximately 5.3 years.

2027 Notes

The following table presents the total amount of interest cost recognized relating to the 2027 Notes (in thousands):

The effective interest rate of the 2027 Notes was 4.2% as of June 30, 2026 and 2025. As of June 30, 2026, the unamortized debt issuance cost for the 2027 Notes was$0.9 million and will be amortized over approximately 1.0 years. During the three months ended June 30, 2026, the conditions allowing holders of the 2027 Notes to convert were met. As a result, the 2027 Notes are convertible as of June 30, 2026.

As of June 30, 2026, the estimated fair value of the 2031 Notes and 2027 Notes was$1.1 billion and$239.8 million, respectively, and was based upon observable, Level 2 inputs, including pricing information from recent trades of the Convertible Notes.

2026 Notes

The following table presents the total amount of interest cost recognized relating to the 2026 Notes (in thousands):

During the three months ended June 30, 2026, holders converted the remaining $21.1 million aggregate principal amount of the 2026 Notes into 2,002,817 shares of the Company'scommon stock, together with an immaterial amount of cash paid in lieu of fractional shares. The conversions were completed in accordance with the original conversion terms of the 2026 Notes, and no gain or loss was recognized. As of June 30, 2026, the 2026 Notes were fully converted andno principal amount remained outstanding.

The effective interest rate of the 2026 Notes was 4.6% before the conversion in May 2026 and as of June 30, 2025.

Note 8 — Stockholders’ Equity

Equity Incentive Plan

Our 2004 Plan provides for us to grant incentive stock options, non-statutory stock options, restricted stock, stock appreciation rights, restricted stock units, performance shares and performance units to employees, directors, and consultants. We may grant options for terms of up toten years at prices not lower than 100% of the fair market value of our common stock on the date of grant. Options granted to new employees generally vest 25% afterone year and monthly thereafter over a period offour years. Options granted to existing employees generally vest monthly over a period offour years.

Our annual grant of stock-based compensation takes place during the first quarter of each year. Our stock options and restricted stock units granted during the first quarter of 2026 were as follows:

In May 2025, our stockholders approved an amendment to the 2004 Plan to increase the number of authorized shares reserved for issuance under the 2004 Plan by an additional 5.0 million shares.

As of June 30, 2026, the total authorized shares under the 2004 Plan available for grant were 3.8 million.

Total stock-based compensation expense was recorded in the condensed consolidated statements of operations and comprehensive loss, and allocated as follows (in thousands):

For the three and six months ended June 30, 2026, we capitalized approximately$0.7 million and$1.1 million, respectively, of stock-based compensation into inventories.

Performance Stock Units

During 2025 through the second quarter of 2026, the Compensation Committee granted a total of 759,182 performance stock units ("PSUs") to certain employees with a grant date fair value ranging from$44.36 to $71.38 per unit. The fair value of the PSUs was determined on the grant date based on the fair value of the Company’s common stock at such time. The PSU awards are subject to performance goals and will be earned as to a pre-determined fixed number of shares subject to the certification by the Compensation and Talent Committee of the Company’s Board of Directors (the “Compensation Committee”) that the Company has achieved one or more of the relevant performance goals, in each case vesting as to 50% of the earned shares on applicable Compensation Committee certification date and as to the remaining 50% of the earned shares following the one-year anniversary of the applicable Compensation Committee certification date.

The Company recognized expense for the PSUs of$1.8 million and$2.3 million for the three and six months ended June 30, 2026, respectively, compared to a credit of$1.1 million and an immaterial amount of expense for the three and six months ended June 30, 2025, respectively. There was$11.2 million of unamortized stock-based compensation related to the portion of PSUs vesting that is deemed probable as of June 30, 2026.

Public Offering of Common Stock

On May 8, 2026, the Company closed an underwritten public offering of 11,338,028 shares of common stock at a public offering price of $71.00 per share, which included the exercise in full by the underwriters of their option to purchase up to 1,478,873 shares of common stock at the public offering price. The net proceeds to the Company from the offering were approximately $760.1 million, after deducting underwriting discounts and commissions and offering expenses payable by the Company.

Controlled Equity Offering Sales Agreement

On February 27, 2025, we entered into an Open Market Sale Agreement SMwith Jefferies LLC under which we may offer and sell, from time to time, at our sole discretion, shares of common stock in “at the market offerings” pursuant to Rule 415(a)(4) under the Securities Act of 1933 through Jefferies LLC, as sales agent. As of June 30, 2026, we have not sold any shares of common stock under the Open Market Sale Agreement SMwith Jefferies LLC.

Note 9— Commitments and Contingencies

Legal Matters

From time to time, the Company is a party to legal proceedings in the course of the Company's business. The outcome of such matters is inherently uncertain and often involves significant judgment in assessing risk and estimating potential exposure. Accruals are recognized for legal matters when a loss is both probable and reasonably estimable. As of June 30, 2026, no material contingent liabilities have been recognized. If a material loss is reasonably possible and we can estimate the amount or range of the loss, we disclose such information. Unless otherwise noted, either the outcome of these matters is not expected to be material, or the potential loss cannot be reasonably estimated.

In re Cytokinetics, Incorporated Securities Litigation

On September 17, 2025, a putative stockholder class action lawsuit was filed against the Company and its Chief Executive Officer in the United States District Court for the Northern District of California, alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The action was purportedly filed on behalf of a class consisting of all investors who purchased or otherwise acquired the Company's common stock between December 27, 2023 and May 6, 2025. The complaint alleges that the Company made materially false and misleading statements regarding the timeline for the NDA regulatory approval process for aficamten and failed to disclose related material risks. The complaint seeks unspecified damages, together with interest, attorneys' fees, and costs.

On December 22, 2025, the Court appointed Gilbert Rosenthal as Lead Plaintiff and approved his selection of Pomerantz LLP as Lead Counsel. The action is now captioned In re Cytokinetics, Incorporated Securities Litigation, Case No. 3:25-cv-07923-RFL. On March 10, 2026, Lead Plaintiff filed an amended complaint, which, among other things, added the Company's Chief Financial Officer as a defendant. The Company filed a motion to dismiss the amended complaint and Lead Plaintiff filed an opposition to the motion. The Company expects to file a reply to the opposition in due course.

The Company and the individual defendants dispute the allegations in the amended complaint and intend to vigorously defend against the action.

Pohlmann v. Blum, et al.

On March 9, 2026, a purported stockholder derivative action captioned Pohlmann v. Blum, et al., Case No. 3:26-cv-01998-RFL, was filed in the United States District Court for the Northern District of California against certain of the Company's current and former directors and its Chief Executive Officer, with the Company named as a nominal defendant. The complaint asserts claims for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, waste of corporate assets, contribution under the Securities Exchange Act of 1934, and violations of Section 14(a) of the Securities Exchange Act of 1934 and Rule 14a-9 promulgated thereunder. The allegations are based substantially on the same underlying facts and circumstances as those alleged In re Cytokinetics, Incorporated Securities Litigation and principally concern statements regarding the Company's New Drug Application for aficamten and the subsequent extension of the related PDUFA action date. The complaint seeks, among other relief, unspecified damages on behalf of the Company, disgorgement, corporate governance reforms, and attorneys' fees and costs.

On March 27, 2026, the Court found the derivative action to be related to In re Cytokinetics, Incorporated Securities Litigation and reassigned the matter accordingly. On April 16, 2026, the Court entered an order, pursuant to the parties' stipulation, staying the derivative action in its entirety during the pendency of any motion to dismiss in the securities class action, subject to customary terms.

The Company and the individual defendants dispute the allegations in the derivative action and intend to vigorously defend against the matter.

Other Commitment

We have approximately$18.6 million of non-cancellable commitments related to purchases of materials and inventory manufacturing agreements.