Common-Size Income Statement
Cytokinetics Inc., common-size consolidated income statement
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The financial data exhibits notable fluctuations in various expense and revenue categories over the five-year period. The composition of revenues demonstrates a significant shift, with research and development revenues declining steadily from 83.71% in 2018 to 6.96% in 2022, indicating a reduced reliance on this segment as a portion of total revenues. Conversely, license revenues have shown a marked increase, peaking at 77.89% in 2021, though not reported in 2019 and absent in 2022. Milestone revenues appear modestly in 2020 through 2022, implying occasional contributions to overall revenues. The realization of revenue participation rights was absent until 2022, where it surged to 91.98%, suggesting a unique or one-time event impacting that year’s revenue structure.
Examining the expense structure relative to revenues, research and development expenses remain the largest component, consistently negative and exceeding 200% of revenues each year. Despite its volatility, it reached a minimum negative percentage in 2020 (-173.66%) before increasing again in subsequent years. General and administrative expenses have also escalated from -99.3% to -188.16% by 2022, reflecting growing overhead or operational costs. Total operating expenses mirrored these patterns, with a significant increase between 2018 and 2019 (-382.26% to -467.97%), followed by a decline in 2020 and an upward trend thereafter.
Operating losses tracked closely with operating expenses, peaking in 2019 at -367.97% of revenues, then reducing to -168.27% in 2020 before rising again to -342.75% in 2022. Interest expense oscillated within a narrower range, generally decreasing over time from -12.05% to -20.52%, with an anomalous loss on settlement of debt arising in 2022 (-26.37%). The non-cash interest related to revenue participation rights diminished steadily from -56.4% in 2018 to -33.56% in 2022, indicating a lowering burden from these liabilities.
Interest and other income showed variability, initially increasing to 16.88% in 2019, dropping sharply by 2021 to 0.47%, then recovering somewhat in 2022 to 11.99%. Overall loss before income tax mirrored the broader cost and revenue trends, reaching the highest negative level in 2019 (-452.93%) before dropping in 2020 and then intensifying markedly again in 2022 (-411.21%). No income tax provision data was reported throughout the period.
Net losses consistently followed the pattern of pre-tax losses, signaling ongoing challenges to profitability. The substantial magnitudes of losses relative to revenues highlight a critical need for addressing cost structures and revenue diversification to enhance financial stability. The pronounced changes in revenue composition in 2022, particularly the surge in realization of revenue participation rights, warrant further investigation to understand their impact on sustainable income generation.
- Summary of Key Trends
- - Steady decline in research and development revenues as a percentage of total revenues.
- - Significant increase in license revenues in select years, with absence in others.
- - Appearance of revenue participation right realization exclusively in 2022, contributing heavily to revenues.
- - High and volatile research and development expenses, consistently exceeding total revenues.
- - Increasing general and administrative costs over the period.
- - Operating losses fluctuating but remaining at substantial negative levels relative to revenues.
- - Decreasing trend in non-cash interest expenses related to revenue participation liabilities.
- - Persistent net loss throughout all years with a peak in 2019 and another increase in 2022.