Sharon Barbari, Cytokinetics Executive Vice President of Finance and Chief Financial Officers
Thank you Fady, under the expanded collaboration Cytokinetics received 55 million in the form of an upfront payment of 30 million, 10 million for the purchase of 2040816 shares of Cytokinetics’s common stock and a milestone payment of 15 million related to the decision to advance CK107 into phase 2 clinical development. In addition Cytokinetics expects to receive potentially over 20 million for the reimbursement of sponsored activities in connections with the agreed research and development plans covering the next two years. From accounting stand point the upfront payment of 30 million will be recognized proportionately over the terms of the agreed research and development plans for 2015 and 16.
The 15 million dollar milestone was earned in 2014 and the stock purchase closed in 2014. Under the amended agreement Cytokinetics is eligible to receive over 600 million and free commercialization in commercialization milestone payment of which over a 100 million is payable for CK107 in each of SMA and other neuromuscular indications. The agreed terms also provide for escalating royalties to Cytokinetics with increased sales. Cytokinetics retains the option to co-fund the development of CK107 in SMA and other neuromuscular indications in exchange for increased milestones and royalties and if Cytokinetics exercised at co-promotion option. Astellas will reimburse Cytokinetics for certain expenses associated with promotion activities. This expansion into our collaboration provides Cytokinetics additional cash and continued sponsorship of ongoing research and agreed development activities over the next two years. We expect to provide financial guidance for 2015 that will incorporate the impact of our expanded collaboration during our Q4 earning’s call scheduled to occur on February 12th, 2015. I will now turn the call back over to Robert to provide some additional comment.
Robert Blum, President and Chief Executive Officer
Thank you Sharon, we are pleased to expand our collaboration with Astellas’ to enable the joint pursuit of CK107 in SMA and potentially other neuromuscular indications. While we plan for initial phase 2 initial trial of CK107 in patients with SMA. Our expanded collaboration provides a mechanism through which we and Astellas may agree to pursue the development of CK107 in other neuromuschular indications and we remain committed to pursue the potential non-neuromuscular indications as well. Potential non-neuromuscular indications for fast skeletal troponin activators include diseases and medical conditions associated with aging, for example sarcopenia, claudication, rehabilitation related deficits for example disused atrophy and cakepsia in connection with heart failure cancer and COPD. Cytokinetics and Astellas continue to seek non-neuromuscular indications which maybe suitable for CK107 or other skeletal sarcomere activators under our collaboration.
As we believe as a hall mark of Cytokinetics deals. Under this expanded collaboration Cytokinetics retains certain options attract with the continued maturation of our development capabilities and other potential shareholders. Under our expanded collaboration with Astellas, Cytokinetics retains an option to conduct early stage development activities for certain agreed indications at our initial expense subject to reimbursement, if development continues under the collaboration. In addition Cytokinetics retains the options to co-fund certain later stage development activities relating to CK107 in SMA and other neuromuscular indications in exchange for increased milestone payments and royalties. Similarly with this expanded collaboration Cytokinetics retains certain options rights and responsibilities with regard to potential commercialization activities Cytokinetics and Astellas may jointly commercialize CK107 and other fast skeletal troponin activators in neuromuscular indications in the US, Canada and Europe.
The amended agreement also provides the Cytokinetics to lead certain activities relating to the commercialization of collaboration products neuromuscular indications in the US, Canada and Europe under particular scenarios. We look forward to the further development of potential commercialization of CK107 without partner Astellas. We are pleased to our collaborate nature of our partnership as well as the strategic vision that Astellas’ bring to this program as well as the capabilities in the areas of novel mechanism bio-pharmaceutical R&D. With the expansion of our collaboration with Astellas, we believe we are continuing to execute in our mission to expeditiously advance innovative drug candidates focused to muscle biology for patients suffering from grievous diseases. Operator! That concludes our formal presentation, if you would please open the call for questions?
