Celcuity Q1 2023 Earnings Call Transcript

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May 15, 2023

There are 7 speakers on the call.

Operator

Welcome to Cell Q80 First Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen only mode. A brief question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to introduce your I'll host Robert Duol with ICR Westwicke.

Operator

Please go ahead.

Speaker 1

Thank you, operator, and good afternoon to everyone on the call. Thank you for joining us to review Celcuity's Q1 2023 financial results and business update. Earlier today, Celcuity released financial results For the Q1 ending March 31, 2023, the press release can be found on the Investors section of the website. Joining me on the call today are Brian Sullivan, Cellcuity's Chief Executive Officer and Co Founder Vicki Hahn, Chief Financial Officer As well as Igor Gorbachevsky, Chief Medical Officer, who will be available during Q and A. Before we begin, I would like to remind listeners that our comments Today, we will include some forward looking statements.

Speaker 1

These statements involve a number of risks and uncertainties, which are outlined in today's press release and in our reports and filings with

Speaker 2

the SEC.

Speaker 1

Actual events or results may differ materially from those projected in the forward looking statements. Such forward looking statements and their implications involve known and unknown risks, Uncertainties and other factors that may cause actual results or performance to differ materially from those projected. On this call, we will also refer to non GAAP financial measures. These non GAAP measures are used by management to make strategic decisions, is useful for investors' understanding and assessment of the company's ongoing core operations and prospects for the future. You can find the table reconciling the non GAAP financial measures to GAAP measures in today's press release.

Speaker 1

With that, I would now like to turn the call over to Brian Please go ahead, sir.

Speaker 2

Thank you, Robert, and good afternoon, everyone. Since we provided a corporate update just 7 weeks ago during our full year of 2022 financial call, I'll only make brief prepared remarks today. I'm very pleased with the execution to date of our VICTORIA-one Phase 3 clinical trial enrollment activities at our trial sites. As we've reported previously, Factorio 1 is evaluating ganetolizib in combination with fulvestrant with and with alpalaciclib in adults with HR positive HER2 negative advanced breast cancer, whose disease progressed while receiving a CDK4six inhibitor. Our team is relentlessly focused and keeping us on track to report the primary analysis for the non mutated patient subgroup in the second half of twenty twenty four and the primary analysis for the PIK3CA mutated patient subgroup in the first half of twenty twenty five.

Speaker 2

This is consistent with our prior guidance. At the ESMO Breast Cancer Congress last week, we presented updated median progression free survival data for treatment naive HR positive HER2 negative advanced breast cancer patients. We think the data is very encouraging. In our poster presentation, we provided updated efficacy and safety data and treatment naive patients Who are enrolled in escalation arm A and expansion arm A of our Phase 1b study. We have previously reported data for this group of patients At the San Antonio Breast Cancer Symposium, last December, we had a cutoff date of June 29, 2022.

Speaker 2

The median PFS and expansion RMA has not yet been reached. As of March 16, 2023 data cutoff date, With the benefit of the additional follow-up period, we were able to report final median progression free survival and median duration of response data for these patients. For treatment naive patients in escalation RMA, median progression free survival was 45.8 months and for patients in expansion RMA, It was 48.6 months. When the results for treatment naive patients from each of these arms are analyzed together, Median progression free survival was 48.6 months and median duration of response was 46.9 months. These results compare very favorably to the median PFS of 24.5 months reported in the PALOMA-three study for palociclib plus letrozole.

Speaker 2

We think these results demonstrate the intrinsic role the PI3K mTOR pathway plays as a disease driver in advanced HR positive HER2 negative breast cancer. This data also highlights the potential opportunity to develop getathelisib as a first line treatment option. We continue to characterize getathelisib's activity in various tumor types In comparison to activity to other drugs in the class, as we've previously reported, the non clinical studies we presented at ASCO GU in February for prostate cancer And at AACR in April for gynecological cancers highlighted gatatelisib's differentiation from other drugs in this class. In each of the studies we performed and all of the tumor types assessed, gedatilisib demonstrated superior therapeutic effect relative to the other PI3Ks, AKT and mTOR inhibitors evaluated. Based on the results from these internal non clinical As well as published reports of prior clinical results with drugs in this class, we think there is a significant opportunity for us to develop getafilisib in these tumor types.

Speaker 2

We'll provide an update on our clinical development priorities later this year. And finally, the FACT 1 and FACT 2 trials are continuing to patients with early stage HR positive HER2 negative breast cancer, whose HER2 pathway is hyperactive as detected with our Cigna test. We now expect to announce interim results from these studies in the first half of twenty twenty four. And with that, I'll now turn the call over to Vicki Hahn to review our financial results.

Speaker 3

Thank you, Brian, and good afternoon, everyone. I'll provide a brief overview of our Q1 2023 financial results. The first quarter net loss was $11,900,000 or $0.55 loss per share compared to a net loss $7,900,000 or $0.53 loss per share for the Q1 of 2022. Because these quarterly net losses include Significant non cash items, including stock based compensation and interest expense. We also included in our Press release non GAAP adjusted net loss for the quarter ending March 31, 2023.

Speaker 3

Our non GAAP adjusted net loss for the 1st Quarter of 2023 was $10,200,000 or $0.47 loss per share compared to non GAAP adjusted net loss for the Q1 of $11,300,000 for the Q1 of 2023 compared to $6,700,000 for the Q1 of 2022. The approximately $4,600,000 increase resulted primarily from cost supporting activities related to the VICTORIA-one pivotal trial. General and administrative expenses were $1,300,000 for the Q1 of 2023 compared to $800,000 for the Q1 of 2022. The approximately $500,000 increase This was a result of non cash stock based compensation and professional fees associated with being a public company. Net cash used in operating activities for the Q1 of 2023 was $12,900,000 compared to $5,900,000 for the Q1 of 2022.

Speaker 3

This was a result of non GAAP adjusted net loss of $10,200,000 working capital changes of approximately 1,000,000 And non cash interest income of approximately $1,700,000 We ended the quarter with approximately $157,500,000 of cash, cash equivalents and short term investments compared to $168,600,000 at

Speaker 2

Thank you, Vicki. Operator, could you please open the call for questions?

Speaker 4

Sure.

Operator

Maury Raycroft with Jefferies. Please go ahead.

Speaker 4

Hi, congrats on the progress and thanks for taking my questions. I was wondering as it relates to the preclinical data that you presented at ASCO GU and AACR data and the positive ESMO breast cancer frontline PFS data. Can you talk more about what gating factors are to inform your next steps with development later this year? I guess what would go into those decisions and would it be based on the Phase 3 progress?

Speaker 2

So we've been somewhat independently evaluating the landscape of opportunities to consider for development of gatifelicit. And so in parallel, our R and D group has done a great job of reporting and developing the data, conducting the studies for the data that we presented at ASCO and And AACR. And that helps inform our decisions. Simultaneously, we've been doing a review of prior published data For clinical trials, evaluating indicator inhibitors in this class. And then we've also evaluated The market opportunity, standard of care treatment, the unmet need, essentially doing holistic analysis of catalyst of both its Differentiation, its characteristics as well as the unmet needs and prior results in other areas.

Speaker 2

And all of that has led us to develop some conclusions about how we would prioritize. We expect to announce the next step for us in development The next few months, I would say, essentially by no later than Q3. And at that point, we'll make clear what went into our decision And why we prioritize that. With respect to first line breast cancer, that would obviously be a very long study, very significant study. And it's one that we would probably And it's one that we would probably say we'd have to essentially hold off for practical purposes until we get through our second line study.

Speaker 2

We think the data is still very interesting and compelling and certainly important as for investors to consider if they're trying to evaluate the long term potential for the company is. I think for most drug developers, the goal is ultimately to have a drug that's capable of Providing benefit for patients as early as possible. And the data that we updated and presented at ESMO suggests that we could Potentially, the data certainly points us in this direction, enhance significantly the progression free survival period For patients who are treatment, I. E. Newly diagnosed with metastatic breast cancer.

Speaker 2

So long term, we think that would represent a significant Opportunity to help a bigger group of patients for longer periods of time.

Speaker 4

Got it. All makes sense. And maybe one other question just on the Phase 3. In the past, you've mentioned how powering and the statistical analyses are conventional All for the Phase 3. Are you providing any more specifics on powering assumptions for the 3 primary endpoint statistical analyses And how those factor into the regulatory path forward?

Speaker 4

Or would that be something that we can learn more about at a later point before the second half 'twenty four readout?

Speaker 2

Well, the fiscal analysis plan has been reviewed by the FDA. That was part of the process we went through last year and once we described to folks. So We've vetted essentially our approach, the primary analysis that we proposed to use and that's all been You talk about conventional powering, I mean, typically for primary analysis, I think the expectation is that you have certainly north of 85%. We think 90% is probably more typical. And we would, I would say on the side of being more conservative and have a higher power used for determining sample size and effects Numbers to do the primary analysis.

Speaker 2

And then certainly, the alpha is fairly standard, typically 0.025 For on one-sided analysis. And so we're not breaking trail on any of that. And I think investors, it shouldn't be A consideration, but those types of details typically we think are more appropriate to present when you're presenting the data.

Speaker 4

Got it. Okay, that's helpful. Thanks for taking my questions. I'll hop back in the queue.

Speaker 2

You're welcome. Thank you.

Operator

Next question comes from Boris Peaker with Cowen and Company. Please go ahead.

Speaker 5

Great. Thanks for taking our question. This is Nick on for Boris. So just a quick question on Celsigna. So I note that it was delayed and that you anticipate having the data in the first half of twenty twenty four.

Speaker 5

I was wondering if this is the same for the other FACT trials, if they've been if the potential data has also been pushed back slightly, because of some of these delays?

Speaker 2

Yes. I would say just in general, the Ability to get samples, biopsy samples essentially requires additional screening and Results in a longer or greater pool of patients we have to prescreen and screen to be able to get patients to enroll. And with the stop start we had with the pandemic, We use certain assumptions to project for enrollment and I think those projections were slightly off. And Again, the conditions that Celsigna trials face are wholly different from VICTORIA-one for instance. VICTORIA-one is enrolling of all commerce were essentially women who have progressed on a prior CDK4six and meet other eligibility criteria are Able to enroll.

Speaker 2

There's no significant screening out required, which is the case with CELCYGNA where Only patients, roughly 20%, 25% of patients who have a research biopsy and then are found to have hyperactive HER2 signaling are eligible. So that two step process just It's harder to project the activity and also results in a slower rate of overall And you would have for a more conventional trial like VICTORIA-one.

Speaker 5

Understood. Thanks for that detail. Just another quick one. I know what you guys ended up with cash. I was just wondering if you have had any guidance as to The cash runway or cash burn or anything like that?

Speaker 2

We previously provided guidance that this cash would take us to the end of 2025 and we are sticking with that guidance. Great.

Speaker 5

Thank you very much.

Speaker 2

You're welcome.

Operator

Next question comes

Speaker 5

Questions. Can you tell us how many patients have been enrolled in the FACT 1 and FACT 2 studies? And then secondly, is there anything you can tell us about your ex U. S. Plans?

Speaker 5

Thanks.

Speaker 2

So we haven't provided updates on enrollment activities in those studies. And basically, we're providing And as far as ex U. S, I guess, are you referring to Commercial activities, development activities, could you maybe provide a little more detail on that question? Yes.

Speaker 5

If you can just talk about your commercial preparation and activities, that would be great. Thanks.

Speaker 2

Sure. Well, our primary focus now is in conducting the study And making sure all our efforts are getting the data as soon as practically possible. As far as the commercial efforts, I mean, there's certainly a well understood path to be able to commercialize that you Prepare somewhat in parallel to preparation of your NDA. The activities in the U. S.

Speaker 2

Are those early activities are In process, I would say we're on track with what you would expect for a company expecting to commercialize when we would. As far as ex U. S, we haven't really described in any detail publicly what our plans are. But I would say for Most biotechs in our position, they would look to some form of partnering to commercialize the drug ex U. S.

Speaker 2

We haven't made any commitments to that area. I think it's premature For us to finalize anything in that area, but I doubt that we'll be breaking trail. I think taking the path that others have taken, Finding partners to take on different markets or entire ex U. S. Is certainly a very plausible path for us to take.

Speaker 4

Great. Thank you.

Operator

Next question comes from Alex Nowak with Craig Hallum Capital Group. Please go ahead.

Speaker 6

Okay, great. Good afternoon, everyone. In the final cut or the latest cut of the ESMO data, were there any previously unreported toxicities or Any higher rates of adverse events that pops up maybe that are new to this study or this kind of the data versus the prior cuts?

Speaker 2

No, that's a great As it turns out, no. So the data has been updated relative to and we presented that data in December. So there really wasn't any change in that data as presented at ESMO rather as presented at San Antonio. But I think what's Very encouraging about the data is that we had patients that were on this drug for over 4 years or more, 5 years. And the toxicity profile for patients receiving this drug on a continuous basis for such an extended period of time is we think very encouraging.

Speaker 2

They stayed on the drug. The discontinuation rate was less than 10% with this group of patients due to treatment related adverse events. And that can typically well, that would only be the case if the side effect profile, if the adverse events These patients we're experiencing were tolerable and allow them to maintain a good quality of life. So I think the data, the longer The follow-up period, the more encouraged we are because the safety data doesn't change.

Speaker 6

No, that's certainly good. With the ESMO data and also the San Antonio data in hand here, I mean, Progression free survival almost double what the San Diego Care would potentially represent. How can you utilize this with to help with Victoria Whether it be sites or patients within the site?

Speaker 2

Well, we're just at ESMO last week. And I would say we presented this data and a number of our investigators from Europe attended as well, some from the U. S. And I would say the importance of the data is that it highlights the role that get a Telusib could potentially play long term as a drug treating breast cancer And the data is really, I would just say, remarkable. And I think that's the perspective that the investigators who are Our study have, which is, wow, this is great data.

Speaker 2

We want to investigate this drug. This drug seems very active and it sounds very exciting and We want to make sure we get our patients enrolled and we want to see this drug get evaluated and it certainly looks very promising. A big part of what helps with any clinical study is being able to stay in front of investigators have a reason to talk to them beyond just details And anytime you can provide additional data that further supports the hypothesis that the trial is evaluating It's very helpful. It just helps establish our credibility, the drug's credibility and their overall interest because they If I conclude that the likelihood of this drug being available to patients and playing a big role is Increases in probability when they see more data like that in their mind.

Speaker 6

Yes, absolutely. No, that's good to hear. And just last question, can you just remind us on the IP position Within data and within breast, and then certainly seems like you're building this to be a bit more of a platform going to other cancers. Just how do you take that IP and transition it from breast and the other Indications, they are potentially targeting?

Speaker 2

Sure. So any drug has multiple kind of layers of patents or different approaches it takes to Yes. To build out a patent state, everybody will get patents for its Tack the pharmaceutical ingredient, the API, the actual molecule itself, and then they'll We had additional patents typically for different formulations. And we think the exclusivity for the drug that we're evaluating in breast cancer and other Cancers would provide an exclusivity period through the end of 2,039. So we think we have a long runway.

Speaker 2

And With an IV drug, there's opportunities to think about how to optimize the formulation for different applications and those present Yes, different opportunities to further extend the runway of IP protection.

Speaker 6

Okay, great to hear. Appreciate the update. Thanks.

Speaker 2

You are.

Operator

There are no further questions at this time. I would like to turn the floor back over to Brian Sullivan for closing comments.

Speaker 2

Thank you everyone for participating in the call today and for your ongoing support. We look forward to seeing you at the Craig Hallum Conference at the end of this month or at the Jefferies Healthcare Conference in June. Hope everyone has a great evening. Goodbye.

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