Celcuity Q2 2024 Earnings Call Transcript

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August 14, 2024

There are 8 speakers on the call.

Operator

afternoon, ladies and gentlemen, and welcome to the Celcuity Second Quarter 20 24 Financial Results Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. This call is being recorded today, August 14, 2024. I would now like to turn the conference over to Maria Jankowski 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 Q2 2024 financial results and business update. Earlier today, Celcuity released financial results for the Q2 ending June 30, 2024. 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 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. And with that, I would now like to turn the call over to Brian Sullivan, CEO of CellCuity. Please go ahead.

Speaker 2

Thank you, Maria, and good afternoon, everyone. We appreciate your interest in CellCuity. We made significant strides advancing the clinical development of getatelisa this quarter. Overall enrollment in VICTORIA-one, our Phase 3 study evaluating getatelisa plus fulvestrant with and without palbociclib as second line treatment for patients with HR positive HER2 negative advanced breast cancer remains robust and on track. Our Phase 1btwo trial evaluating patients with metastatic castration resistant prostate cancer is also enrolling on schedule.

Speaker 2

And we further expanded the patient population eligible for gatatelisib when we initiated efforts to launch VICTUREIA II, a Phase III study designed to evaluate gatatelisib as a first line treatment option for patients with HR positive, HER2 negative advanced breast cancer. In our view, each of these three programs has the potential to generate blockbuster levels of revenue. If these three programs ultimately result in regulatory approvals, we estimate that nearly 200,000 late stage cancer patients globally would be eligible to be treated with gatedulisib. We first announced our plans to conduct the VICTORIA-one study over 2 years ago in May 2022. At that time, we estimated that 65% of the patients enrolled would lack detectable PIK3CA mutations and would thus be assigned to the study's PIK3CA wild type cohort.

Speaker 2

And this assumption was used to estimate enrollment by cohort and in turn the timing of events for primary analysis. We estimated that the threshold number of events required to trigger the primary analysis for this PIK3CA wild type cohort of patients would be reached in the second half of twenty twenty four. And while the study's overall enrollment remains on track and robust relative to the estimate we made over 2 years ago. The total proportion of patients enrolled who have PIK3CA wild type tumors has recently shifted lower. We now project that 60% of the patients enrolled in the study will be enrolled in the PIK3CA wild type cohort rather than the 65% originally estimated.

Speaker 2

And this proportion, while lower than our original estimate, is within the range reported in other studies. And thus, we don't believe this shift is study related, but simply a result of normal sample variation within a population. Despite the lower proportion of PIK3CA wild type patients completed, enrollment for the PIK3CA wild type cohort is over 80% complete. We expect to reach the enrollment target for the PIK3CA wild type cohort during the Q4 rather than the end of Q3 as we originally forecast. We now expect the primary analysis event threshold trigger for the PIK3CA wildtype cohort will be reached sometime between late Q4 'twenty four and the end of Q1 2025.

Speaker 2

Our guidance regarding the PIK3CA mutant patient subgroup remains unchanged and we expect primary analysis for this cohort to be triggered during the first half of twenty twenty five. Turning now to our VICTORIA II study. We announced our plans to initiate this Phase III clinical trial this past May. Study will evaluate gatatelisib plus a CDK4six inhibitor and fulvestrant as first line treatment for patients with HR positive HER2 negative advanced breast cancer whose disease recurs while receiving or within 12 months of completing adjuvant endocrine therapy. Now these patients are considered to have endocrine therapy resistant disease.

Speaker 2

They have a significantly poor prognosis than endocrine therapy sensitive patients whose disease recurs more than 12 months after completing their adjuvant endocrine therapy. Current standard of care first line treatment for endocrine therapy resistant patients includes any of the 3 approved CDK4six inhibitors combined with fulvestrant. The limited efficacy of these regimens offer endocrine therapy resistant patients though was not well understood until the NOV-one hundred and twenty study, Phase 3 clinical trial for the PIK3C and PI3K alpha inhibitor inovlicid reported results last December. As part of this trial, the efficacy of standard of care palaciclib and fulvestrant was evaluated as first line treatment in patients who were resistant to endocrine therapy. And for these patients, median PFS was only 7.3 months.

Speaker 2

And for those patients whose disease relapsed within the 1st 2 years of their adjuvant endocrine therapy, the median PFS was only 3.7 months. And these results compare poorly to the median PFS of 27 months reported for patients who are sensitive to endocrine therapy and who received the same regimen, highlighting the significant need for more effective therapies for patients with advanced breast cancer that are resistant to endocrine therapy. We reported last year the preliminary clinical data from our Phase 1b trial for getatilisib as first line treatment in patients with advanced breast cancer. As you may recall, the median progression free survival in endocrine sensitive patients were treatment naive and were treated with getatilisib in combination with palo sickle and letrozole was 48.6 months and the objective response rate was 79%. And these results compare very favorably to the results reported for palociclib plus letrozole in this population.

Speaker 2

Additionally, the ANNO-one hundred and twenty study that evaluated inovalisib combined with palbociclib and fulvestrant in the endocrine resistant patients reported positive data. Now these patients had tumors with PIK3CA mutations and the patients were not prediabetic or diabetic. So this subgroup only represents about 20% of the total endocrine resistant patient population. However, the results reported were positive relative to the control, providing further evidence of the critical role the PIK3CA pathway plays as a driver of disease in treatment naive patients. In the VICTORIA-two study for the CDK4six inhibitor, investigators may choose either ribociclib or palbociclib.

Speaker 2

Safety profile of getatilisib combined with fulvestrant and palbociclib is well described, but the investigational combination of getatilisib with rivociclib has not yet been clinically tested. And therefore, the safety run-in of approximately 12 to 36 patients will evaluate the safety profile of getatilisib combined with rivociclib and fulvestrant. Safety run-in will be completed and gatatelicib's Phase 3 dose with rivociclib confirmed before enrolling patients in the Phase 3 portion of the study. For this study, approximately 638 subjects will be assigned to a cohort based on their PIK3CA mutation status. After the investigator selects the CDK4six inhibitor for a subject, subject will then be randomly assigned on a one to one basis to either be treated with getatilisib, fulvestrant and either ribociclib and palbociclib or be assigned to an arm that treats patients with fulvestrant in either ribo or palpable.

Speaker 2

The clinical trial primary endpoints are progression free survival per Rhesus 1.1 criteria as assessed by blinded independent central review. And the primary PFS endpoint for each of the 2 cohorts will be evaluated independently. Studies design was reviewed and discussed with U. S. FDA during a Type C meeting in Q1 and then we've also just recently received feedback from the FDA on the study protocol as part of the Type D meeting.

Speaker 2

So we can now focus on our feasibility and site selection activities. We expect to activate roughly 200 clinical sites across North America, Europe, Latin America and Asia and we expect to enroll the 1st patient in the Q2 of 2025. We estimate that 15,000 to 20,000 patients with endocrine therapy resistant advanced breast cancer are diagnosed each year in the United States alone. Since this population does not overlap with the patient population we're evaluating in our VICTORIA-one study, an approval to treat these patients would increase the size of the addressable U. S.

Speaker 2

Market potential for getatilisib by up to $3,000,000,000 Given the importance of developing a more efficacious therapeutic regimen for these patients and the scale of the financial opportunity, we decided it was important to proceed as quickly as possible to initiate a Phase 3 study for this patient population. To accomplish this, we needed to strengthen our balance sheet, which we did this quarter when we raised $129,000,000 gross proceeds from equity and debt offerings. By initiating this trial now, 12 months earlier than we would have been able to do so without this financing, we estimate we added over $1,000,000,000 to the net present value of the potential revenue stream from this indication. I'd like to turn now to our Phase 1btwo trial that's evaluating the safety and efficacy of gatatulisib in combination with darolutamide, an androgen receptor inhibitor in patients with metastatic castration resistant prostate cancer. Study dosed its 1st patient in February of this year and enrollments on track.

Speaker 2

We continue to expect to report preliminary data in the first half of twenty twenty five. We're also pleased that our non clinical research describing dettolusib's activity in different tumor types was recently published in 2 leading journals. In June, Nature of Breast Cancer published results from various in vitro and in vivo studies we conducted that compared getatulisib's activity in several approved single node PI3KAKT mTOR or PAM inhibitors in various breast cancer models. And in August, molecular oncology published results of similar studies in prostate cancer models. Both sets of studies demonstrated that gatedalisib exhibited more potent and cytotoxic effects compared to the single node PAM inhibitors regardless of the PAM pathway mutational status of the cell lines.

Speaker 2

And these results indicate that inhibition of multiple PAM pathway nodes by a pan PI3K mTOR inhibitor like Gadatilisib It's more effective at inducing any tumor activity than single node PAM inhibitors in vitro and in animal models. Overall, it was a very busy and productive quarter. I'm very pleased with the progress we made. I'd like now to turn the call over to Vicki, who will review our finances.

Speaker 3

Thank you, Brian, and good afternoon, everyone. I'll provide a brief overview of our financial results for the Q2 2024. Our 2nd quarter net loss was $23,700,000 or $0.62 per share compared to $14,600,000 net loss or $0.66 per share for the Q2 of 'twenty 3. Because these quarterly net loss losses include significant non cash items including stock based compensation and interest, we also included in our press release non GAAP adjusted net loss for the quarter ending June 30, 2024. Our non GAAP adjusted net loss was $22,200,000 or $0.58 per share for the Q2 of 'twenty four compared to non GAAP adjusted net loss of $11,100,000 or $5.1 per share for the Q2 of 'twenty 3.

Speaker 3

Research and development expenses were $22,500,000 for the Q2 of 'twenty 4 compared to $13,800,000 for the same period in 2023. Of the approximately $8,700,000 increase in R and D expenses, dollars 6,600,000 primarily related to activities supporting the VICTORIA 1 Phase 3 trial and the initiation of the Phase 1b2 prostate trial. And $2,100,000 was related to increased employee and consulting expenses. General and administrative expenses were $1,800,000 for the Q2 of 'twenty four compared to $1,300,000 for the Q2 of 'twenty 3. Employee and consulting related expenses accounted for $300,000 of the increase.

Speaker 3

Professional fees and other administrative expenses accounted for the remaining increase of approximately $200,000 Net cash used in operating activities for the Q2 of 2024 was $18,100,000 compared to $9,700,000 for the Q2 of 2023. We ended the quarter with approximately $283,100,000 in cash, cash equivalents and short term investments compared to $180,600,000 at December 31, 2023. The increase of approximately $102,000,000 in cash and cash equivalents and short term investments was the result of several financing activities that occurred in the first half of twenty twenty four and yielded net proceeds of $137,500,000 We closed on 2 financing activities in May resulting in gross proceeds of $122,000,000 and net proceeds of $115,500,000 The first activity was an equity financing resulting in $60,000,000 of gross proceeds with net proceeds of $56,300,000 The second activity was a debt offering resulting in gross proceeds of $61,700,000 with net proceeds of $59,200,000 Additional financing activities in the first half of the year resulted from dollars The $137,500,000 was offset by year to date operating cash used of $35,100,000 I will now hand the call back to Brian.

Speaker 2

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

Operator

Your first question comes from the line of Maury Raycroft from Jefferies. Your line is now open.

Speaker 4

Hi, thanks for taking my question. Just checking on the enrollment, I appreciate that the timeline is moving a little bit. Based on the shift in proportion of wild type and mutant populations, is it possible that the wild type and mutant readouts could happen at the same time? Or are you confident that the wild type and mutant readouts will be staggered? And secondly, is it fair to assume, you'll do another update on enrollment in Q4 and provide more specifics on the plan for the readout at that point?

Speaker 2

Thanks, Maury, and thanks for your question. As far as the timing of announcement of results for mutated, we're maintaining our guidance that we would expect to have those results available sometime in the first half. We're enrolling the same number of patients in each cohort of the studies, wild type versus mutant and 40% of the patients are mutated. So that enrollment period will take longer to complete, albeit a little bit sooner than we originally planned because of the higher proportion of mutated patients. But we're not changing our guidance at this time.

Speaker 2

And as far as updating enrollment, we'll continue to update guidance as we have every quarter on when we expect to report top line results.

Speaker 4

Okay. Makes sense. And then for VICTORIA II in the frontline setting, can you talk more about the safety run-in with the 12 to 36 patients? Why is there a range of patients that you could enroll? And are you assessing any variations with dosing strategy and how long will you have to treat these patients?

Speaker 2

I'll give you an initial high level summary and Igor could maybe fill in the blanks. Essentially, the study is designed to evaluate if needed various dose levels of get atelisib to find the Phase 3 dose. If we don't need to reduce the dose of get atelisib in the first cohort of patients that we're evaluating, then we'll be able to proceed with the data from that group of 12 patients. And then subsequently, if we find that we need to dose reduce get up, we would enroll another 12 patients and do the same thing again if we had to enroll another 12 patients. So essentially, depending on what the results and the outcome of that of each cohort or one cohort will or may or may not lead you to enroll additional patients.

Speaker 2

As far as the thresholds, I mean, it's a standard safety run-in design. Igor, maybe you could provide a little bit more color on that question.

Speaker 5

Thank you, Brian. As Brian pointed, it's very straightforward safety run-in, 3 dose level will be tested, 12 subjects per each dose level and DLT will be assessed after one cycle of treatment is completed. It's a very safe and straightforward design that has been discussed with regulators and agreed upon. And to Brian's point, decision about initiation of randomized Phase III study could be done as early as completion of initial cohort 12 subject.

Speaker 4

Got it. Okay. Thanks for taking my questions. You're welcome. Thank you.

Operator

Your next question comes from the line of Tara Bancroft from TD Cowen. Your line is now open.

Speaker 6

Hi, good afternoon. I was hoping you could tell us exactly what you're seeing now for the percentage of the split of wild type versus mutant that you think you're observing now versus what your previous expectations were? And also just a point of clarification, by target enrollment, you mean completion, right?

Speaker 2

Right. There's always variation. You may have patients in screening at the end of a period and enroll additional patients just because you can't not enroll patients that you've potentially already approved to screen once you hit that target. But completed enrollment is correct. So we were at 65% at the end of 2023.

Speaker 2

And so over the course of 2023, you'd see fluctuations month to month, which is kind of expected fluctuations from normal. So again, we were cautious in interpreting variation, but because we ended the year at the target number we had set in May 2022, 18 months prior, we thought that that estimate was solid and what we would continue. Once we hit 80% enrollment, which we did recently, the wild type cohort, and we are at 60%, We just decided that we should update our forecast to the current ratio, cumulative ratio, which is 60%.

Speaker 6

Okay, great. And then so I guess late Q4 for potentially meeting the event timeline, that would potentially fit into the San Antonio conference timeline. Is this still maybe what you're primarily hoping for? Because I know that the abstract deadline passed early to mid July. So did you submit an abstract or plan on presenting there?

Speaker 2

So we haven't yes, we aren't going to until we get have an announcement to make about the data, we aren't really going to go into details about what venue will be reporting that data and it's going to be very situational depending on the timing and relative to the next most relevant meeting. And so once the data is available, we'll report the top line as soon as we have it and then we'll provide guidance on when we would go into more detail at a meeting or go into some detail in the announcement press release.

Speaker 6

Okay, great. Thanks so much for taking the questions.

Speaker 2

You're welcome.

Operator

Your next question comes from the line of Brad Cagnino from Stifel. Your line is now open.

Speaker 7

Hi. Thanks for taking the question. Brian, I just wondered, can you talk about how the potential forthcoming approval of Roche's intervals have factors into your clinical and regulatory strategy for frontline, at least for the proportion who will have the mutation? And also how important is the ultimate label outcome around the metabolic parameter eligibility as you

Speaker 2

think about this? Thank you. I'm not sure I understand your question regarding inovalisib as it relates to us. Are you asking that question about how that might affect our first line study? Yes.

Speaker 2

Brett? We don't think it will because they're only evaluated patients who A, had to PIK3CA mutation, but B, were didn't have were not pre diabetic or diabetic, which depending on the estimates, can narrow that indication down to 50% of the mutated population. So it really is not a drug that could fully treat the indicated population, which is women who have endocrine resistant disease. And as a result, we're and we've reviewed this information with the FDA in several settings. So we're confident in our design and that's what we'll be evaluating.

Speaker 2

So we don't think that data will affect us. It provides we think validation of what we're doing. They showed in that population that the pathway is involved and inhibition of that pathway can induce a meaningful treatment benefit. As far as what's on the label, the drug had been tested in patients without the strict limitations used in this most recent study, the INVO-one hundred and twenty. I think the eligibility criteria were informed by the results in that study.

Speaker 2

And if I recall correctly, from data they reported, I think in 2021, where patients may have had a cutoff of A1C similar to alpulipid. I think in one of the cohorts they treated roughly 40% Grade 3 hypoglycemia. So I think it would be unlikely that the label wouldn't address the hypoglycemia risk and the fact that the drug has not been evaluated in patients who are pre diabetic or diabetic. And to the extent doctors decide they want to ignore that based on the results that at least were reported on a preliminary basis in this other studies, it would seem that the likelihood of inducing Grade 3 hypoglycemia would be pretty significant. So I think that drug is similar profile in some ways as opalypsib.

Speaker 2

They just narrow their patient population as a way to avoid inducing high levels of grade 3 hyperglycemia.

Speaker 7

Appreciate it. Thank you.

Speaker 2

You're welcome.

Operator

There are no further questions at this time. I would now like to turn the call over to Brian Sullivan, CEO of CellCuity for closing remarks.

Speaker 2

Thank you very much for attending our call. We appreciate your interest in our company and I look forward to reporting to you next quarter. Good evening.

Operator

Ladies and gentlemen, this concludes today's conference. Thank you very much for your participation. You may now

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