Q2 2020 Celcuity Inc Earnings Call

Great.

Good day, everyone and welcome to todays sell QD released the second quarter 2020 financial results.

All participants are to listen only mode. Later, you'll have the opportunity to ask questions. During the question and answer session. You may registered to ask a question at any time by pressing star and one on your telephone keypad.

Please note today's call may be recorded no will be standing by life, you should need any assistance.

My pleasure to turn todays conference over to Brian Sullivan Vicki. Please go ahead.

Thank you operator, good afternoon, everyone and thank you for joining us today for a discussion of some acuity second quarter 2020 financial results and business highlights.

We issued a press release announcing our financial results for the second quarter ended June Thirtyth 2020, a few minutes ago. Today's press release can be found on the Investor section never website Www dot so acuity dotcom.

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 L.C.C.

Actual events or results may differ materially from those projected in the forward looking statements.

Such forward looking statements and their applications involve known and unknown risks.

Certainties and other factors that may cause actual results or performance to differ materially from those projected.

On this call. We also refer to non-GAAP financial measures. 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 member measures is useful for investors understanding and assessment of the company's ongoing core operations and prospects for the future you can find a table reconciling the non-GAAP financial measures to GAAP financial measures.

In today's press release.

And with that I'd like to introduce Brian Sullivan our CEO.

Thank you Becky and good afternoon, everyone I'm very pleased that you joined US today for an update on our progress this past quarter I'll first comment on our second quarter results focusing in particular on the status of our product development projects. Our collaboration discussions that are in fact, one in fact, two clinical trials I think he will follow me to discuss our financial result.

And then we will open the lines for questions.

So curious third generation diagnostic platform cell signaling identify the underlying cellular activity. This work dysregulated pathway say glut that drives many cancers and this allows us to diagnose dysregulated signaling pathways in a patients tumor that have a disease mechanism treatable with a matching targeted therapy.

Our strategy is to help pharmaceutical companies obtained new indications for their targeted therapies to treat the patients ourselves signal a tough identified.

That's right you laid it signaling is too complex <unk> molecular tests to characterize we can leverage the capability of ourselves signet platform to create a proprietary business model.

To execute our strategy, we continue to do it that's development of additional cell signaling pathway activity tests during the second quarter in June we presented results from studies of our first cell signaling pathway activity test for ovarian cancer at the American Association of her cancer research or a CR annual meeting ourselves like me a test for.

Ovarian cancer identifies a subset of ovarian cancer patients, whose tumors have abnormal seem not signaling that's coincident with abnormal her to segment.

Nearly 15000 woman or your die from ovarian cancer, which is a disease that has less than 50% five year survival rate.

Only a small portion of ovarian cancer patients benefit today from the investments made over the past 20 years.

Ocular based medicine since most patients slack and actionable biomarker, which is typically a molecular mutation.

He's patients had an undiagnosed cancer driver and others precluded from receiving in many cases, the optimal drug to treat their cancer.

There's also a significant unmet need for new diagnostic approach that can identify treatment options for ovarian cancer patients, who lack actionable molecular mutations sell signet test its intended to address this unmet need by helping pharmaceutical companies obtain new indications to treat ovarian cancer patients, whose cancer drivers identified by ourselves.

Fantastic.

Regarding our collaborations our discussions with pharmaceutical companies progressed during the quarter.

Despite the headwinds go 19 possess.

I'm very confident we'll finalize wants to collaboration is before yearend and an additional ones in the first up 2021, a potential collaboration partners include many of the country's leading cancer research centers as well as several global pharmaceutical companies and there's collaborations are intended to evaluate the efficacy of targeted therapies and patient populations ourselves signet tested.

That buys pharmaceutical company would not otherwise be able to evaluate their drugs in these patient population.

Yes, but that's a collaboration is what it vitalize enable us to study a range of drugs are either a single or a combination agents.

If successful these collaborations would represent a critical step towards a penny a new indication for the evaluated targeted therapies.

Finally, although our back to in fact, one trials remain somewhat impacted by covert 19 related delays.

We've seen many sites we start their clinical trial activity. We continue to expect interim results as we reported last call from these trials in the second half the 2021.

Both the facts one in fact, two trials are evaluating anti hertwo therapies in early stage hertwo negative breast cancer patients.

The goal of each trial is to demonstrate the breast cancer patients identified by ourselves signet her to pathway activity to obtain a higher rate pathological complete response to neoadjuvant anti her to drug treatment and the current therapies.

Since cancer patients, who receive a pathological complete response, the new at Neoadjuvant drug treatment are less likely to have their cancer recur. We're hopeful ourselves to be a test can play a significant role and sending the lives of many breast cancer patients.

So I'd like to now I'll turn back the Vicki who will review our financial results.

Our second quarter net loss was 2.2 million or 21 cents per share compared to 1.72 million net loss or 17 cents per share for the second quarter of 2019.

Net loss for the first six months of the year 22020 was 4.4 or 5 million or 43 cents per share compared to 3.57 million or 35 cents per share for the same period in 2019.

Because these quarterly net losses, including a significant noncash item, which a stock based compensation. We also included in our press release non-GAAP adjusted net loss for the quarter.

Our non-GAAP adjusted net loss was 1.78 million or 17 cents per share for the second quarter 2020, compared to non-GAAP adjusted net loss of 1.53 million or 15 cents per share for the second quarter of 2019.

Non-GAAP adjusted net loss for the first six months of 2020 was 3.56 million were 34 cents per share compared to non-GAAP adjusted net loss of 3.19 million or 31 cents per share for the first six months of 2019.

R&D expenses increased approximately approximately <unk> 0.5 5 million during the first six months of 2020.

Prior to the first six months of 2019 this was primarily due to.

<unk> 0.5, 2 million increase in compensation expense, which included 0.3 6 million of noncash stock based compensation.

In addition, other research and development expenses increased point, all 3 million due to the clinical validation and laboratory studies.

And operational and business development activities.

The approximately <unk> 0.1, 6 million increase in gene eight during the.

Second quarter.

2020, compared to the second quarter of 2019 was attributable to non cash stock based compensation.

[noise], we ended the quarter with approximately 15.4 million of cash and cash equivalents.

Net cash used in operating activities for the second quarter of 2020 was 1.56 million.

This was the result of non-GAAP adjusted net loss of 1.78 million offset by <unk> 0.1, 2 million of working capital changes in prepaid assets and accounts payable and depreciation expense of <unk> 0.10 man.

Thank you Becky so in summary, we're pleased with the progress we're making a we presented data for two new cell Cigna tests in two different tumor types over the past nine months, our discussions with pharmaceutical companies and clinical sponsors continue to advance and we expect to close some collaborations this year.

We expect present data for another so save me a test for breast cancer patients by the end of 2020.

And we remain confident that will obtain interim results from back one or two trials in the second haven't 2021, operator, I would now like to take questions.

At this time it seems like that's good question. Please press the star and one keys on your telephone keypad keep in mind, you may or move yourself from the question could you at any time by pressing the pound cake.

Once again to ask a question today. Please press the star and one keeps on your Touchtone telephone keypad.

We'll take our first question from you Chan with H.C. Wainwright. Please go ahead.

Hi, This is bill Baldwin dialing in for each one.

I got a couple of questions or the first one you mentioned about the nuclear to go to trial collaboration.

Do you happen to know how many such collaborations are expected to be.

Later this year I'm really be focused on where in cancer.

Okay. So thanks for the question.

Oh, we expect one to two collaboration has to be announced this year and then additional several additional ones first half next year. The collaboration is that that we're working on now or that we would expect to announce a in the near term I would be for breast cancer discussions for ovarian cancer, just begun and we will want expect those clubs.

Basins to come to fruition until probably towards the end of next year 2021.

That's really helpful. I do you expect any upfront payment under partners for such collaborations.

No we're not going to characterize the collaboration is until they are finalized, but oh. So you know at the time, we now some well we'll be able to describe those and detail.

Regionally for knowledge Vanda clinical trials my stock.

I'm, sorry for the collaboration or it's not as you're talking about.

Yeah as you know there there's a fair amount of time from when you you may reach an agreement to conduct a study.

The work of.

Getting me I'd be approval of coordinating <unk> logistics of the drug supply and so it depends on the.

Particular partner and their processes.

But but there can be yeah, six to nine months of time from the time, you announced an agreement to one.

You are actually enrollment ready and again, that's well be specific to each collaboration.

Okay, that's helpful and or fact wanting to talk to trial will enroll patients.

And then.

[laughter] towards the ended the quarter, yes, but there was obviously a period.

Bulk of the second quarter or when you know most besides we're not admitting patients who worked code 19 and they they.

For the most part shut down their clinical trial activity.

Okay and one final question for me, but do you expect to release validation results for <unk>. So yeah, Ross I appreciate that.

So we expect to be able to provide additional data.

Next round of data would be towards the end of this year. That's that's our current goal.

And as a reminder, if you'd like to ask a question. Please press the star and one keeps on your telephone keypad.

Your next question from Alex Nowak. Please go ahead.

Great. Good afternoon, everyone. This is actually willing to pinsky on for Alex. Thanks for taking my questions first for me.

That's what the look into how things effectively progress. This summer with the fact trials and just just discussed the piece of enrollment thus far in Q3 things right. So I would say up through Q2, other sites, where and that means that a june most of our sites where either not rolling or.

I'm just getting back online.

And I would say you know in July we saw more of the sites or begin to HM.

Re initiate activity.

There's been I don't want to say, that's really a pause, but I I think.

As you know and some of the states that you know there was an uptick which lets call. It some sites and that was very site specific location specific to curtail some activities. So I I would say that trend has been upward and and I would say both sides of reengaged.

But there are.

As you might expect some bumps along the way, but but I would expect unless some other yeah and again, that's the problem with go 19, yeah. The there's a lot of unknowns, but the current directory that trajectory would suggest that we would be you know back too.

Cool activity by.

The end of this quarter, certainly and maybe before.

But we're still maintaining our guidance for results you know second half of a 21.

Got you appreciate that's very helpful color there.

Actually just one more for me you know we were wondering how is the reduction in patients getting screened.

Less cancer diagnoses impacted the prevalence of cancers targeted in fact when in fact you you just what are your thoughts on how this impacts enrollment in Q3 and beyond.

Yeah, I I have got too precise about that I mean, I think you may have read there's been some reports out that the number of cancer diagnosis in general decline in the second quarter, because you know patients weren't.

Being scheduled for biopsies and diagnostic diagnostic procedures does that lead to a a blip in Q3, I I don't want to get on the business of of trying to.

Forecasts something like that I think there's so much noise in the system, it's hard hard to.

I'm not comfortable projecting off of that but I I I'm aware of.

The fact that some people are suggesting that there's a backlog.

And maybe in some areas, that's but that will translate directly.

You know, we we don't have enough experience you know given the nature of what we're doing to.

Forecasted that precisely.

No I understood. Thanks for taking the questions and best of luck moving forward. Thank you note taker.

And once again, if you'd like to ask the question today. Please press the star and one case on your Touchtone telephone keypad.

Well pause for a moment to allow further questions to Q.

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Okay well.

So I think it and that's what other questions I mean.

The questions in the Q.

Oh there no further questions on the line at this time.

Okay well.

Well. Thank you very much everyone I appreciate your attending the call and look forward to.

Speaking with you a next quarter.

Take care.

This does conclude todays program. Thank you for your participation in you may now disconnect.

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