Celcuity Q4 2023 Earnings Call Transcript

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March 27, 2024

There are 9 speakers on the call.

Operator

Good afternoon, ladies and gentlemen, and welcome to Celltivity 4th Quarter and Year End Financial Results Conference Call. At this time, all lines are in a listen only mode. Following the presentation, we will conduct a question and answer session. Instructions will be provided at that time for you to queue up for a question. I would now like to turn the conference over to Maria Jankoskie 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 CellCuity's Q4 and full year 2023 financial results and business updates. Earlier today, Celcuity released financial results for the Q4 and full year ending December 31, 2023. The press release can be found on the Investors section of the website. Joining me on the call today are Brian Sullivan, Celcuity'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.

Speaker 1

Before we begin, I would like to remind listeners that our comments today will include some forward looking statements. These statements involve a number of risks and uncertainties, which are outlined in today's press release and in our reports and filings with the SEC. 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.

Speaker 1

These non GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the company's current performance. Management believes the presentation of these non GAAP financial measures 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. And with that, I would now like to turn the call over to Brian Sullivan, CEO of Celcuity. Please go ahead.

Speaker 2

Thank you, Maria, and good afternoon, everyone. In 2023, we made significant progress advancing development of galatilisib while strengthening our balance sheet and adding to our leadership team. Our Phase 3 VICTORIA-one trial remains on track to report top line data from the PIK3CA wild type patient subgroup in the second half of this year and top line data for the PIK3CA mutated patient subgroup in the first half of twenty twenty five. We were also excited to begin development of getetalucid for patients with metastatic castration resistant prostate cancer this past year. Enrollment has begun in our Phase IbII trial evaluating gatatelucip in combination with darolutamide and we look forward to sharing preliminary data from this trial in the first half of twenty twenty five.

Speaker 2

Our VICTORIA-one Phase 3 clinical trial is designed to evaluate gatatelisib in combination with fulvestrant with and without cabociclib in patients with advanced hormone receptor positive HER2 negative breast cancer whose disease has progressed after treatment with a CDK4six inhibitor. We're seeking to improve outcomes for this patient population, which today receives only limited benefit from current second line standard of care therapies. We estimate that this initial potential target population represents over 100,000 breast cancer patients globally on an annual basis. Current standard of care for these patients includes endocrine therapies such as fulvestrant and regimens that combine fulvestrant with an mTOR specific or PI3K alpha specific targeted therapy. These therapies only offer modest progression free survival periods and in the case of the approved PI3K alpha inhibitor, a very challenging safety profile.

Speaker 2

Significant unmet need for these breast cancer patients has led to development and subsequent investigation of a significant number of new therapies, An oral SERG for patients with an ESR1 mutation and AKT inhibitor for patients with a PIK3CA or AKT mutation was recently approved. Median progression free survival or PFS for these tumor therapies range from 3.8 to 5.5 months respectively in the same patient population our Phase III trial is enrolling. While the availability of new drug alternatives for patients is always good news. Based on the results reported for these drugs, the unmet need for these patients will still remain. To further elucidate the different therapeutic effects of gatatelisib versus other PI3KAKT, mTOR or PAM inhibitors, we performed a series of non clinical studies using breast cancer cell lines.

Speaker 2

We presented the results of these studies during a poster session at the 2023 San Antonio Breast Cancer Symposium. In a panel of 28 breast cancer cell lines, gataceletzabuosan to be more cytotoxic and at least 300 fold more potent on average compared to the single node PAM inhibitors. Mechanistically, getafilisib decreased cell survival, DNA replication, protein synthesis, glucose consumption, lactate production and oxygen consumption more effectively than the other PAM inhibitors. In vivo studies confirm that pan PI3K mTOR inhibition by gatatelucid reduced tumor cell growth more effectively than single node inhibitors in breast cancer patient derived xenograft models with and without PAM pathway mutations. We believe gatatelicib's highly differentiated mechanism of action as an equipotent pan PI3K mTOR inhibitor is uniquely suited to most effectively address this unmet need, especially since gatatelisib has demonstrated activity independent of the PIK3CA or ESR1 mutational status of a patient's tumor.

Speaker 2

The results from our Phase Ib study and patients receiving the Phase 3 dosing schedule for get atelisib in combination with palociclib and fulvestrant was very promising. Median PFS was 12.9 months and the objective response rate was 63%, both of which compares very favorably to published data for current standard of care regimens. Another important goal for us in 2023 was to begin development of getatilisibin, a new tumor type. In the Q4, we initiated a Phase IbII clinical trial to evaluate gatatelicib in combination with darolutamide, which is a potent androgen receptor signaling inhibitor in patients with metastatic castration resistant prostate cancer. We enrolled our 1st patient in the study in February and we expect to report preliminary data in the first half of twenty twenty five.

Speaker 2

Treatment options for these patients are limited and there's an urgent need for new drugs to treat them. Numerous preclinical studies have demonstrated interaction between the antigen receptor and PAM pathways suggesting that combining a PAM inhibitor with an androgen receptor inhibitor may induce a synergistic anti tumor effect in patients with prostate cancer. There's also compelling clinical evidence with an earlier generation PAM inhibitor providing a proof of concept of our hypothesis that combining getafilisib with an androgen receptor inhibitor may be efficacious. And finally, as we get closer to having data for the PIK3CA wild type patients in our Phase 3 breast cancer study, we need to begin laying the commercial and marketing groundwork necessary to bring data solicit to the clinic. To head up our commercialization efforts, Eldon Mayer joined our management team as our Chief Commercial Officer in February.

Speaker 2

Eldon has over 30 years of biopharma commercial experience in companies ranging from early stage biotechs to full scale pharmaceutical companies across many therapeutic areas, including oncology. Eldon's an exceptional leader with a proven track record of building commercial organizations from the ground up to support the launch of a biotech company's first drug. And with that, I'll turn the call over now to Vicki Hahn, our Chief Commercial Officer, to review our financial results.

Speaker 3

Thank you, Brian, and good afternoon, everyone. I'll provide a brief overview of our financial results for the Q4 full year 2023, and I invite you to review our 10 ks, which will be filed later today for a more detailed discussion. Our 4th quarter net loss was $18,800,000 or $0.65 per share compared to $11,600,000 net loss or $0.69 per share for the Q4 of 2022. Net loss for the full year of 2023 was 63,800,000 dollars or $2.69 per share compared to $40,400,000 net loss or 2 point 6 $4 per share for the same period in 2022. Because these quarterly and full year net losses include significant non cash items, including stock based compensation and non cash interest.

Speaker 3

We also include in our press release non GAAP adjusted net loss for the quarter and full year ending December 31, 2023. Our non GAAP adjusted net loss was 17 point $6,000,000 or $0.61 per share for the Q4 of 2023 compared to non GAAP adjusted net loss of $10,300,000 or $0.61 per share for the Q4 of 2022. Non GAAP adjusted net loss for the full year 2023 was $57,800,000 or $2.44 per share compared to non GAAP adjusted net loss of 35,000,000 or $2.27 per share for the full year 2022. Research and development expenses were 18 point $1,000,000 for the Q4 of 2023 compared to $10,600,000 for the Q4 of 20 22. R and D expenses for the full year 2023 were $60,600,000 compared to $35,300,000 for the prior year.

Speaker 3

Of the approximately 25 $300,000 increase in R and D expenses year over year, dollars 22,900,000 was related to activities supporting the VICTORIA 1 Phase 3 trial and the initiation of the Phase 1btwo clinical trial. The remaining $2,400,000 increase in R and D expense is related to increased employee and consulting expenses. General and administrative expenses were $1,600,000 for the Q4 of 2023 compared to $1,000,000 for the same period in 20 22. G and A expenses for the full year of 2023 were $5,600,000 compared to $4,100,000 for the prior year. Of the approximately $1,500,000 increase in G and A expenses, dollars 1,100,000 was related to increased employee related expenses and $400,000 related to professional fees and other expenses associated with compliance related activities that support financing and clinical operations.

Speaker 3

Net cash used in operating activities for the Q4 of 2023 was $18,500,000 compared to $9,500,000 for the Q4 of 20 22. This was the result of non GAAP adjusted net loss of $17,600,000 plus approximately $900,000 of working capital changes. Net cash used in operating activities for the full year 2020 was $53,800,000 compared to compared to $36,000,000 for the full year 2022. This was a result of non GAAP adjusted net loss of approximately $57,800,000 offset by working capital changes of approximately $3,900,000 We ended the year with approximately $180,600,000 of cash, cash equivalents and short term investments compared to $168,600,000 on December 31, 2022. The increase in cash year over year is a result of 2 financing activities that occurred in the Q4 of 2023 and yielded gross proceeds of $65,000,000 which was offset by cash used in operating activities of $53,800,000 in 2023.

Speaker 3

The first financing activity included a private placement offering through a prefunded warrant arrangement, which generated $50,000,000 in gross proceeds. The second financing activity generated gross proceeds of $15,000,000 by accessing our at the market offering. We expect cash, cash equivalents and investments and available funds under our debt facility to provide adequate capital to fund current operational activities into the first half of twenty twenty six. I will now hand the call back to Brian.

Speaker 2

Thank you, Vicki. Operator, could you please open the call

Operator

Your first question is from Tara Bancroft from TD Cowen. Please ask your question.

Speaker 3

Hi, good afternoon. I was wondering if you could tell us more about the overlap of ESR1 and PIK3A mutations and if the FDA still considers arm C or fulvestrant alone the best comparator for arms A and B now a year into the launch of elacestrant. So I'm just basically trying to gauge your level of confidence in the arm B versus C endpoint or even the chances that you might go for an ESR1 wild type labeling for that subset or what? Thank you.

Speaker 2

Thanks for the question, Tara. We have not seen any variation in output outcomes for patients associated with ESR1 mutation with the combination of therapy that we're evaluating in this study. And so we don't anticipate a challenge on that front. We closely collaborated with the FDA when we were developing the design of our study. We reviewed the study with them on an ongoing basis through a series of Type B meetings where we are collaborating with them and in close contact to review not only the clinical development, but also work associated with what we hope is a future NDA.

Speaker 2

As far as changing the control, there's no discussion or consideration of that. Drug was recently approved, that used fulvestrant as a control just this past few months. And so we'll certainly have data available to us to report potential outcomes in patients according to their mutational status, but we don't anticipate, as I said earlier, to find any differences or meet clinically meaningful differences.

Speaker 3

Great. Thanks. Have you said, which HR you're powering to for the B versus C endpoint? You commented on that.

Speaker 2

We haven't commented on that. But again, we're powering the study sufficiently to support regulatory approval.

Speaker 3

Okay. Thanks so much.

Speaker 2

Thank you.

Operator

Thank you. Your next question is from Mary Reitov from Jefferies. Please ask your question.

Speaker 4

Hi, thanks for taking my questions. It seems like the data timing is intact and on track. Is there anything else you're saying about enrollment rate? I think at one point you mentioned you aim to enroll 50% of the wild type patients by the end of

Speaker 5

the Q1.

Speaker 4

Wondering if you've achieved that milestone and is that something that you could announce for the wild type cohort?

Speaker 2

Yes. That milestone is associated with one of the terms of our debt facility and we did achieve that milestone during this quarter. And so we remain on track that is consistent with the guidance we provided about having data in the second half of this year.

Speaker 4

Okay, great. And for the Phase 3 readout, can you provide an estimate for how much follow-up you think you will have by the time of the data readout?

Speaker 2

That's not a number that we'll disclose at this point. We anticipate obviously reporting the top line data and the data readout is will be triggered by achieving sufficient events and that factors in follow-up period necessary to get a fulsome mature set of data.

Speaker 4

Okay. Yes, it makes sense. And lastly, another question on mutations. When you analyze the Phase 1b data, you reported similar efficacy in patients with or without PI3K mutations. But can you remind me if you looked at other mutations in the pathway, including AKT, mTOR and PTEN loss?

Speaker 4

And for the Phase 3, have you had discussions with PA3K mutations?

Speaker 2

We've done analysis of patients with these other mutations, but the numbers are small. And so we didn't feel that reporting those results would be scientifically rigorous enough to really discuss. But we have evaluated them and based on at least our interpretation of the small sample sizes, we haven't seen anything that is concerning or inconsistent with the comparable results we saw with wild type PIK3CA versus mutated PIK3CA. And as far as other mutations and how that might interact with the FDA, essentially when you design a clinical trial, Phase 3 clinical trial, you have a very detailed protocol with statistical analysis that's well prescribed. And you essentially interact with the agency quite a bit or at least we did to get their feedback and to ensure that our assumptions and the statistical analysis plan would be satisfactory subject to review to support an NDA and nothing on that front has changed.

Speaker 2

And the primary biomarker that we're using is primarily to assign patients to a study that's focusing on PIK3CA mutated patients and a study that's associated with or randomizing patients who lack a PIK3CA mutation. And we're using what the PIK3CA mutations that have supported approval of PIK3CA alpha inhibitor. So again, we're relying on an approved PIK3CA test and have confidence that that test will support subject to review by the FDA and NDA submission.

Speaker 4

Got it. That's helpful. Thanks for taking my questions.

Speaker 6

You're welcome.

Operator

Thank you. Your next question is from Hill

Speaker 2

Gil, I think that was for you.

Speaker 5

I think my name was butchered pretty severely there. Sorry. So, okay. Quick question on the prostate cancer. So just to understand, I mean, you're not only first patient, so a little far from this.

Speaker 5

What kind of signs of early efficacy would the company be looking for in that study? I mean, talking responses here or PSA activity? Thank you.

Speaker 2

Sure. While the study is primary endpoint is PFS, the PFS rate at after 6 months of treatment. And then there are a number of secondary endpoints, which include PFS at 9 12 months as well as evaluating PSA change. We think the most important milestone or rather endpoint is related to radiographic progressive free survival since that's the regulatory endpoint that we would use for evaluation and a registrational study. And so we will be, I think, consistently reporting that number.

Speaker 2

And as that number matures with number of patients who've achieved that whether 6 month milestone, 9 months or 12 month milestone that will conduct well, that will be a rhythm that we'll have for reporting data.

Speaker 5

That's very helpful. Maybe another detail on the enrollment here. So sounds like the wild type cohort is enrolling well. Any thoughts on the mutant cohort? Thank you.

Speaker 2

They enroll in tandem. Essentially, we're enrolling screening patients who have had prior CDK4six if they meet criteria, screening criteria that includes assessment of their PIK3CA status, they then get randomized. So essentially the enrollment of wild type and mutant are occurring concurrently. And so if our wild type is on track, then our mutant population is on track just because of the way the trial enrollment is designed.

Speaker 5

Thank you. That's a very helpful clarification. Thanks for taking our questions. You're welcome.

Operator

Thank you. Your next question is from Brad Bimino from Stifel. Please ask your question.

Speaker 7

Hi, good afternoon. I want to

Speaker 6

ask, is there any way you've been able to track adherence with the prophylactic mouthwash for stomatitis mitigation in

Speaker 2

Victoria 1? Well, we do. One of the primary advantages we have in managing that and monitoring compliance is when the patients come in for their 3 week on, 1 week off infusion. And so the treating physicians or the associated nurses are evaluating and including compliance with that prophylactic and standard questionnaire. And so we have a high degree of confidence based on that, that if patients aren't compliant, we'll find out, but also we reinforce the value of that prophylaxis.

Speaker 2

And just as a reminder that prophylaxis is only used and prescribed for the first two cycles of treatment. The data is fairly clear that for patients who may be prone to development of mucositis, it's in almost all cases likely to occur in the first two cycles of treatment. And so that if you are able to provide that prophylaxis for that first two cycles that the manifestation of mucositis is much, much lower after that period. So it's not a requirement then for patients to remain on that prophylaxis beyond those first two cycles.

Speaker 6

Okay. And then I'll try to ask another enrollment question, maybe in a slightly different way, because I think the continued reiteration of top line guidance for Victoria One is going to be important for investors. I think based on the enrollment pace you see, is there anything you can share about a time point that could be passed this year where you would reach that sufficient enrollment to fully secure the second half guidance for the wild type using the rate assumptions you've got for events?

Speaker 2

I think, again, we've provided the guidance for the second half of this year. Obviously, as we get closer to that, we can get more granular. And I think we'll update that each quarter. And so the closer we get, I think the more descriptive we can be. But so far, again, we monitor enrollment, we're monitoring event rates And you make certain assumptions about the event rate and we're tracking to what our assumptions are so far.

Speaker 6

Thanks for the question.

Speaker 5

You're welcome.

Operator

Thank you. Your next question is from Swayampakula Ramakanth from H. C. Wainwright. Please ask your question.

Speaker 8

Thank you. This is RK from H. C. Wainwright. Good afternoon, Brian.

Speaker 2

Good afternoon.

Speaker 8

Most of my questions have been answered. So when the data when you're ready to publish the data from the wild type in the second half, Would that I'm just trying to figure out how would you disseminate that information? Would that be a medical meeting or do a press release and then follow-up with a medical meeting at the appropriate time?

Speaker 2

It's somewhat situational depending on the timing of meetings and when the data will be cleaned and able to be released publicly. And so when the event threshold is triggered, we'll understand whether what the gross or not gross, but what the data is telling us. And we would finish up data cleaning at that point. Obviously, that's going on an ongoing basis. But it would be our expectation that we would announce the top line results, meaning whether or not we met statistical significance, whether the trial was positive and probably characterize how clinically relevant those results are.

Speaker 2

But I think it would it's typical that you present these results of a Phase 3 study at a medical meeting. That is our would be our current desire. But again, depending on the timing of when the data is available, we may reconsider. But we'll follow, I think, practice that's been used with other drugs. But I think it's fairly typical that if a major meeting isn't scheduled coincident with the availability of data that people will provide that top line and then wait till a medical meeting to provide the more fulsome description of the results.

Speaker 8

Thank you. Thanks for taking my question.

Speaker 6

You're welcome.

Operator

Thank you. Your next question is from Alex Nowak from Craig Hallum Capital. Please ask your question.

Speaker 7

Hey, great. Good afternoon, everyone. As we're getting close to the 1st Victoria readout here, you brought on new Chief Commercial Officer. That's great. Just what are other additional investment in the commercial talent, commercial resources do you need to plan for here over this year?

Speaker 2

Sure. You start to build out the team underneath Eldon, which I think typically includes a person who would head up your market access, a person who would head up your marketing and a person who would head up commercial operations. And with that team, you can do the planning that's necessary to lay the groundwork for obviously a lot more significant efforts once the data reads out and you're really marching towards a specific date for launch. And so yes, we factored that into the assumptions in our budget for this year. We've incorporated that in our forecast of cash requirements and they're not extraordinary.

Speaker 2

They're appropriate relative to what needs to be done and when.

Speaker 7

Okay. No, makes sense. And then can you remind us the IP position of GETA within breast cancer? And then the potential to expand that length within breast or potentially other cancer indications?

Speaker 2

Right. So we have 11 different patents that have been approved for GETA. We have several that are pending. The active pharmaceutical ingredient patent is would provide an exclusivity period through December 34. But because GAT is formulated and because formulation actually is critical to being able to deliver the drug, administer the drug, we think that patent will be very relevant and that patent would have an expiration date of December 39.

Speaker 2

And so we think we'll have an extended exclusive period that would potentially carry for more than 15 years post launch because that's our plan.

Speaker 7

Excellent. I appreciate the update. Thank you. You're welcome.

Operator

Thank you. There are no further questions at this time. Please proceed.

Speaker 2

Well, we appreciate your attendance to the call and we look forward to updating you in the future.

Operator

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect.

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Celcuity Q4 2023
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