Q1 2021 Celcuity Inc Earnings Call
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Greetings, ladies and gentlemen, and welcome to the show QED released our first quarter 2021 financial results at this time all participants are in a listen only mode. A question and answer session will follow the formal presentation.
Do you want and require operator assistance. Please press star zero on your telephone keypad.
And it's now my pleasure to introduce your host Mr. Robert All with Westwood and Investor Relations. Thank you Sir you may begin.
Thank you operator, good afternoon, everyone and welcome to sell Qat's first quarter 2021 financial results webcast and conference call. Thank you for joining US earlier today. So acuity released financial results for the first quarter ended March 31 2021.
The press release can be found on the investors section of our website joining me on the call today are Brian Sullivan, <unk>, Chief Executive Officer, and cofounder and Vicki Hahn Chief Financial Officer, before we begin and I would like to remind listeners that our comments today will include some forward looking statements. These statements involve a.
And 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 and 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 for 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 forecast future results and develop 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 <unk>.
Company's ongoing core operations and prospects for the future you can find a table reconciling the non-GAAP financial measures to GAAP measures in today's press release with that I'd like to turn the call over to Brian Sullivan, and so acuity CEO.
Thank you Robert Good afternoon, everyone and thank you for joining us today as always we appreciate your continued support of cell acuity.
On this call we will update you on our first quarter results and other business activities focusing in particular on our strategic licensing agreement with Pfizer to develop and commercialize get that Elisa recently reported encouraging clinical trial data forget that analysis and an update on our clinical trial collaborations.
Vicki will follow up my comments with a discussion of our financial results and then we'll open up the line for questions.
We've had a few busy months recently.
And entered into a worldwide exclusive license agreement with Pfizer to develop and commercialize get adolescent and.
First from class III through day, I'm Tau inhibitor, we raised approximately $40 $3 million and equity and debt.
Signed clinical trial collaborations with Novartis, Pfizer and Puma, and we presented compelling clinical and non clinical data forget out Elisa.
Obtaining the exclusive license for the Dallas and from Pfizer.
It's a transformational strategic step for cell acuity.
On the responsibility for the clinical development of a targeted therapy builds off the research we've conducted over the past few years using ourselves taking me a platform.
Our unique ability to assess the dynamic activity of signaling pathways and life patient tumor cells.
Gives us proprietary insights and the cancer driver is not available for molecular assessments.
Our research to identify various breast cancer disease mechanisms, let us to focus on one of the most complex pathways linked to breast cancer and <unk>, our findings revealed that many breast cancer tumors of dis regulated P. S V K pathways, despite lacking P S KL for mutations.
Our research also found evidence of the importance of inhibiting all class one fiats, okay isoforms and patients with <unk>, who pay off and mutations.
We subsequently evaluated various <unk> inhibitors using ourselves took me a platform and live patient tumor cells and it sounds like with analysts and unique mechanism of action.
And potentially ideally suited to inhibit P. O S V K M Tor involved signaling.
Ultimately, our internal research findings and the clinical data Pfizer generated and a trial evaluating patients with ER positive <unk> negative metastatic breast cancer motor.
Motivated us to and license get adolescence.
Under the terms of the licensing agreement Pfizer granted sell acuity and exclusive worldwide license to develop and commercialize get that Elisa.
So acuity paid a license fee of $5 million cash and $5 million $5 million of <unk> common stock as upfront payments caused us also eligible to receive up to $330 million of backend loaded development and sales based milestone payments and.
And to receive additional tiered royalties on potential sales.
And early April saw acuity also announced preliminary data for the 103 patients enrolled and the expansion portion of and ongoing phase one b clinical trial evaluating get out a list of and combination with the CDK for six inhibitor I brands.
And and endocrine therapy.
<unk> and analysis of the efficacy and safety data as of January 11th 2021 cutoff date found that 53 of the 88 evaluable patients or 60 per cent.
And objective response and that 66 of the 88 Evaluable patients for 75 per cent had a clinical benefit.
Safety analysis found and get analysts was also generally well tolerated with the majority of treatment related adverse events or T. R E being grade one or grade two.
Most common grade three or grade for tier aes related to get good analysts and.
Stomach Titus and rash.
Get out unless it was also found in the study to induce a far lower rate of grade three or four hyperglycemia and other Pietro <unk> inhibitors that target the <unk> Alpha isoform amongst all patients enrolled and the phase one b trial, only 7% had grade three or four hyperglycemia and.
This is in sharp contrast to op lipsett P. S. VK also a targeted therapy approved for breast cancer were 39% of patients and a phase III trial recorded grade three or grade for hyperglycemia.
Our next step is to meet with the FDA to discuss our clinical development study plans for good that Elisa and <unk>.
Subject to the Fda's feedback we would then initiate a phase two three clinical trial evaluating get analysts had been combination with publix, equip and and endocrine therapy and patients with ER positive <unk> negative metastatic breast cancer and the first half of 2022.
Additionally in April.
We presented results of studies evaluate and get data listen interval.
<unk> inhibitor and the vertical ex bcl inhibitor and breast and ovarian patient tumors at the annual meeting of the American Association for cancer Research.
And the results show that inhibition of hyperactive peer through Cam for involved signaling is nine times more effective with good analysts and then with the <unk> Alpha inhibitor alone such as and a Elisa.
Our data also show the synergistic cooperation between <unk> and Bcl signaling with detectable.
Adjusting potential patient benefit and combining that with the bcl inhibitor.
These results supported our internal evaluation of goods Atlas and further revealed the potential advantage of inhibiting <unk> three K isoforms, and and tour not just <unk> alpha signaling when treating <unk> involved signaling tumors.
We also made significant progress advancing development of our sales take me a companion diagnostics sales.
Sigma is a third generation diagnostic platform that identifies the underlying cellular activity dysregulation pathway signaling and a patient's tumor so that a matching targeted therapy can be prescribed <unk>.
And it's signaling is too complex for molecular tests to characterize in most cases.
And this gives us a unique opportunity to help pharmaceutical companies obtain new indications for their targeted therapies to treat the patients ourselves Sigma tests are uniquely able to identify.
And to take the first step towards realizing this goal, we collaborate with pharmaceutical companies to evaluate the efficacy of their targeted therapies and patient populations selected by our self Cigna pathway activity test. If successful. These collaborations would represent a critical step towards obtaining a new indication that expands the market for evaluated targeted therapies.
We continue to believe there is a significant unmet need for new therapeutic options for her two negative breast cancer patients. Our research suggests that many of these patients have an undiagnosed and untreated disease mechanism. We believe that sell cigna can identify the disease mechanism for roughly 25% to 35% of these patients and the targeted therapy, most likely to benefit them.
Our efforts in this area are gaining momentum and and the first quarter. We entered two new clinical trial collaborations and January as we previously announced we.
And we entered into a collaboration with the Sarah Cannon Research Institute and Pfizer for a phase II trial.
The trial will evaluate the efficacy and safety of two Pfizer targeted therapies and <unk>.
Pro Pan her inhibitor and all Corie C met inhibitor in patients with previously treated metastatic <unk> negative breast cancer selected with our sales taking a test.
Patient enrollment is expected to begin and third quarter of 2021 with interim results and the second half of 2022.
And March we entered into a clinical trial collaboration with MD Anderson, Novartis and Puma biotech to study a new drug regimen for <unk>.
And we will evaluate the efficacy and safety of Novartis as targeted therapy to breakdown and Puma neuro links and patients with metastatic <unk> negative breast cancer selected by the sales Cigna platform. This.
This is our second clinical trial to treat patients diagnosed with hyperactive her two and C met signaling breast cancers with matching targeted therapies.
We now have five clinical trial collaborations in place and we are proud to have advanced and finalize these agreements despite the headwinds from COVID-19.
Our ongoing fact, one in fact, two trials are evaluating anti <unk> therapies and early stage for her two negative breast cancer patients goal of these trials is to demonstrate the breast cancer patients identified by ourselves Cigna her two.
Pathway activity tests obtain a higher rate of pathological complete response to new Neo adjuvant anti hurt to drug treatment and from current standard of care Chemotherapies.
Since patients who receive a pathological complete response to new adjuvant drug treatment are less likely to have their cancer recur. We believe ourselves Cigna test can play a significant role and extending the lives of many breast cancer patients with <unk>.
And you to expect interim results from our fact, one and in fact, two trials and late 2021 or early 2022.
Barring any unforeseen additional COVID-19 related disruptions.
And we're excited about these collaborations and the opportunity to work for some of the worlds most prominent cancer research centers, we have additional collaboration discussions and progress and our goal is to announce new agreements and the coming quarters.
We're also looking forward to having the opportunity to collaborate with clinical investigators that we will be conducting these new trials through our collaboration agreements.
Our highly respected oncology thought leaders and researchers and we believe their interest and collaborating with US reflects their respect for the unique potential.
I was taking a test offers to identify and diagnose disease drivers and their patients.
And finally, we recently closed two financings that resulted in gross proceeds of approximately $43 million.
Financing strengthened our cash position and a little while.
Allow us to fund key clinical development initiatives Vicky.
We will describe the financings and more detail in her remarks.
So Vicky I'd like to turn now to you to review our financial results. Thank you Brian.
Our net loss was $2 $7 9 million or <unk> 25 per share compared to 225 million net loss R 22 per share for the first quarter of 2020.
Because these quarterly net losses include a significant non cash item, which is 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 $2 three 4 million or 21 per share for the first quarter of 2021.
Compared to non-GAAP adjusted net loss per $1, $7 8 million or <unk> 17 per share for the first quarter of 2020.
R&D expenses increased by approximately $3 9 million during the first quarter of 2021 compared to the first quarter of 2020 due to <unk> 6 million increase and compensation expense.
In addition to that other research and development expense for three 3 million due to clinical validation and laboratory studies and operational and business development activities.
The approximately <unk> 9 million increase and G&A during the first quarter of 2021 compared to the first quarter of 2020 was primarily due to <unk> 8 million increase and professional fees associated with being a public company and director and officer insurance.
We ended the quarter with approximately $34 9 million of cash and cash equivalents.
This concludes the proceeds from a successful follow on offering.
Nearly 2 million shares of common stock that raised gross proceeds of approximately $27 6 million.
The net cash used in operating activities for the first quarter of 2021 with 252 million. This was a result of non-GAAP adjusted net loss up to three 4 million and two 8 million of working capital changes and prepaid assets and the crew.
Expenses.
Offset by depreciation and <unk>.
Expense of $1 1 million.
In April we entered into a debt financing agreement with and Novartis life Sciences lending fund one to provide up to $25 million and term loans with the first $15 million tranche funded at closing we were able and we will be able to draw on two additional tranches of five.
Each upon the achievement of certain clinical trial and financing milestone. This coincided with the payment of an upfront license fee of $5 million in conjunction with the Pfizer Caddo Lipsett license agreement taking into accounts. These two events subsequent to the end of the first.
Quarter, we had approximately.
And really $44 million.
Cash on hand.
And with that I'll turn it back to Brian. Thank you Vickie.
So I'd like to just wrap up before we take questions.
We're very excited about the progress we made over the past few months.
And so good that Elisa <unk> fantastic potential opportunity to create value for our shareholders and we're looking forward to updating you as we advance the program and we also expect to close additional collaborations utilizing the <unk> platform in the coming quarters.
Operator, I'd like to now open up the call for questions.
Thank you, ladies and gentlemen, if you'd like to ask a question. Please press star one on your telephone keypad and confirmation tone will indicate your line is and the question queue. You May press star two if he likes you and all of your question from the queue for.
For participants using speaker equipment, and it may be necessary to pick up the handset before pressing and starkey.
And I'm almost is while we pull for questions.
Yeah.
Our first question comes from the line of Alex Nowak with Craig Hallum Capital Group. Please proceed with your question.
Great. Good afternoon, everyone Bryan to actually pick up on that point that you just mentioned it yet and there so regarding the additional clinical trial collaborations that you would expect to announce later this year can you just give any hints on what to expect there would you expect these trials are these collaborations to be again and earlier late stage breast cancer or would these be the first deals with.
Moving to a different cancer type.
We just haven't commented on what we expect really until we kind of are ready to announce.
Sure.
The collaboration itself, but we're on track to announce a couple more as we indicated.
Okay, that's great understood.
And then maybe just an update on all the trials, how how is enrollment tracking with the fact, we wanted to it sounds like things are going pretty much in line with your expectations as the world starts to reopen here and then where are you with beginning enrollment on the fax three four and five as.
The trial sites getting set up now is that the stage that you are currently and just any update there sure.
Sure. So the fact wanted to are kind of tracking to what we've described in the past.
And <unk> III.
<unk>, III, which we announced and around the fact for a little confusing.
And then December.
As far as us for long.
And getting ready to.
Activate.
We expect that to happen this quarter.
FX, three and five which one was announced in January one and <unk>.
March.
And we'll be on track for activating.
In the third quarter.
All of those studies need to formally.
Get.
And final IRB and scientific Committee review and.
And.
Filing of the IND with the FDA R&D.
Documentation with the FDA and so those things are happening happening as we expected.
Nope, that's great just going back to the commentary and the press release today. Your prepared remarks, and then just going back through my notes a couple of weeks ago and the data.
<unk> told us call it looks like and now expect the next day to be a phase II and III pivotal and I. Originally I thought it was just going to be a phase two so I'm just curious what the thinking there on the clinical trial need changed and the past couple of weeks.
I think we've always position. This is a phase II and III trial and the implication of a phase III trial is that its pivotal I think I've just been using that word interchangeably with what the intent that I described earlier.
But we think.
The next step for us.
And I indicated is to get feedback from the FDA and and if the feedback is.
We'll help us sort through the final design of that trial, but we do think that there is.
A likelihood that we could position this study as a pivotal registrational study.
That's great and then since the announcement a couple of weeks ago, and then going forward here have you gotten any more inbounds from pharma.
Regarding about and licensing other drugs and then I guess, a little bit of a follow up to that question is on the alternate side as pharma, reaching out to you realizing what the potential for Salt Cigna has and clearly you are bringing you're bringing a drug and internally. So you're clearly believe that says that drawing any more attention from farm and wanted to do collaborations.
Well I'll make sure to encourage you and our business development.
Minutes from.
Thanks, Alex.
No I think two things, we're obviously very focused on preparing for the FDA meeting, there's quite a bit of work associated with transitioning good analysts and from Pfizer to us there's.
There's a lot more to us and just signing an agreement.
Just kind of a number of moving pieces and that's all proceeding.
And our pace as.
As far as other activities. Our immediate focus is is to lay the groundwork for the next study if we get it out of Elisa, while also thinking through other.
Potential indications that get analyst, Sabine and uniquely be able to.
Investigate and that could involve.
Collaborations with other pharmaceutical companies, but as everybody knows those types of collaborations can take a long time too.
Get explored and and to get finalized so we again it hasn't been our history to really provide too much detail on these discussions until we actually have something and hands and I think that's what we'll continue to do going forward.
Understood and if that makes sense and and then just last question just any update on when you plan to publish the results from the phase one b and Oh.
Journal or abstract.
<unk>, our intent at least is too.
And be able to present the data at San Antonio breast.
Breast cancer Symposium and <unk>.
December.
This year.
That's great. Thank you appreciate the update now you're welcome. Thank you.
And.
Thank you. Our next question comes from the line of each and with H C. Wainwright. Please proceed with your question.
Hi, this is mobile and dialing in for each and just a real quick how do you expect the R&D cost to evolve for the reminder of the year.
We've provided guidance on our diagnostic related expenses and I think we indicated that our net cash.
Consumption.
And would be roughly two $5 million to $3 million on that side of the business and that the therapeutic side of the business would would ramp over the next three quarters to roughly 4 million for millions of expense.
Bye.
That would take you to around the first quarter.
Understood.
What are the expectations from the upcoming face to her two negative for breast cancer trial, with Sarah Cannon, and Pfizer and.
And when do you expect to complete the enrollment process and.
I'm curious why there was an extended period for the data readouts.
On the the trial with Sarah Cannon.
Yeah.
Well, it's a late stage trial and the enrollment for trials like that especially in a third line setting.
So these are patients who failed a couple of lines of therapy.
And can take.
Significant period of time, I think we're trying to be conservative and when we think these patients could be enrolled and certainly if it happens faster.
We would.
We announced the results in line with them.
Yeah.
Okay. That's it from me thank you.
Thank you.
Thank you our next question.
As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad.
Our next question comes from the line of Matt Phipps with William Blair. Please proceed with your question.
Hi, Brian Thanks for taking my questions, just I guess, a little bit and follow up and to.
Clarify wording do you envision a pivotal phase III trial or a phase two that has a transition to a phase III. After maybe some interim like safety run in or.
Sure you know kind of or something like that.
Yes, those are the types of questions that we will be discussing with the FDA and so wanting.
To communicate that we will be exploring different options with the FDA that could include.
Our pivotal study, but we want to get that feedback and understand kind of what.
And the design implications would be.
But we think it makes sense to consider a pivotal study, but we want them.
Make sure we get the appropriate feedback before we.
Commit to any particular design our approach.
Okay, Yeah that makes sense and then I guess as far as timing for some of those additional indications you guys showed some intriguing data with the her two Biosimilar you mentioned endometrial trial is that and it just comes after you get this I mean, you've got enough on your plate.
Pivotal trial kicked off and then maybe after that we hear about some and the other opportunities.
<unk> I think in this case, we want to.
Want to make sure we do the transition and effectively and we want to make sure. We lay the groundwork for this study effectively and get it off the ground and.
And but at the same time and the background star.
Start to explore and.
Through some of the data that's been generated to date with good analysts and other drugs that have explored and perhaps we can inhibitors.
We didn't get analyst has as we've discussed the unique mechanism.
<unk>.
Suited well, particularly potentially for.
For diseases that involve endocrine pathways.
Thanks for the strong suggestion about the linkage between and the estrogen or endocrine pathway and CDK four six and the case for breast cancer and NPS and <unk> has also been suggestions and the literature.
And the involvement of <unk> pathway and other cancers that involved.
Andrew can drivers and so.
Types of.
Tumors would be the ones areas that we would want to.
And investigate internally and incorporate.
As we complete our analysis.
And so for.
Future lifecycle development.
Great. Thanks, that's great for.
Okay. Thank you Matt.
Okay.
Thank you ladies and gentlemen at this time there are no further questions I would like to turn the floor back to Brian Sullivan for closing comments.
Well everyone. Thank you for participating on our call additional questions I'm happy to chat with you and I Hope you have a good evening goodbye.
Thank you ladies and gentlemen. This concludes today's teleconference. You may disconnect. Your lines at this time. Thank you for your participation.
Okay.