Q3 2021 Celcuity Inc Earnings Call
Greetings and welcome to the so acuity third quarter 2021 financial results Conference call. At this time, all participants are in a listen only mode.
A question and answer session will follow the formal presentation. If anyone should require operator assistance. During the conference. Please press star zero on your telephone keypad as a reminder.
Minder. This conference is being recorded I would now.
Now I'd like to turn the call over to Robert <unk> with ICR Westwick. Thank you you may begin.
Thank you operator, good afternoon, everyone and welcome to sell Q&A <unk> third quarter 2021 financial results and business update webcast and conference call.
Thank you for joining us earlier today, So acuity incorporated released financial results for the third quarter ended September 32021. 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 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.
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 elevate the company's current and evaluate the Companys current performance management believes the presentation of these non-GAAP financial measures is useful for investors.
Ending 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'd like to turn the call over to Brian Sullivan <unk> 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.
On this call we will update you on our third quarter financial results. The status of argued that Elisa clinical development program and an update on ourselves taking a companion diagnostics activities Vicki.
<unk> will follow my comments with a discussion of our financial results and then we will open up the line for questions as.
As most of you may know so acuity took a transformational step in April this year when we licensed the Pan <unk> inhibitor, that's all Elisa from Pfizer.
We took this step because of the significant potential that a well tolerated <unk> inhibitor offers to improve outcomes for patients with many different tumor types.
This potential reflects the central role for active <unk> signaling plays in the developed and proliferation of many tumor types.
<unk> <unk>, who came to our efficacious Lee and safely, though is challenging because of its structural complexity and its linkage to key cell metabolic processes.
While the optimal approach to inhibiting <unk> requires targeting five different sub units doing so has until <unk> development resulted in drugs that patients could not tolerate we.
We believe <unk> is the first <unk> inhibitor that combines high potency against all five sub units with a safety profile that compares very favorably against approved isoform specific <unk> inhibitors. Thus.
Thus, we believe could Tal Elisa is uniquely positioned to realize the significant potential first envisioned for pediatric care therapies. When the pathway is critical role in cancer was discovered.
We're currently developing <unk> to treat patients with ER positive <unk> negative advanced or metastatic breast cancer.
We estimate that over 100000 breast cancer patients globally with potentially be eligible to receive <unk> if approved given.
Given the broad role theatrics Pam to our signaling has been demonstrated to play in a broad range of tumor types. We also believe we have a substantial opportunity to develop additional indications outside of breast cancer.
During the quarter, we completed the transfer of regulatory clinical trial and safety reporting responsibilities for <unk> from Pfizer to sell acuity ahead of schedule.
For our ongoing phase <unk> breast cancer clinical trial, we're now working with the participating sites to transition. The 14 patients who are continuing to receive <unk> treatment to an updated clinical trial protocol.
Ongoing clinical trials evaluating <unk> list had been a combination with the CDK four six inhibitor <unk> and two different endocrine therapies.
We're very pleased that updated data from our ongoing phase one clinical trial for patients will be presented at the San Antonio breast cancer Symposium during a spotlight poster discussion session on December 10th Dr.
Dr. Rachel Lehmann and oncologists at the University of Texas, MD Anderson Cancer Center, who is a principal investigator for the clinical trial will be the presenter.
Our preparations to initiate our phase III clinical trial evaluating <unk> in combination with <unk>, which is an endocrine therapy.
Patients with advanced breast cancer are well underway, we have engaged a CRO and other critical vendors started the process of site identification and qualification and received commitments from a number of globally recognized breast cancer cohort.
<unk> to serve as members of our trial steering Committee.
A meeting with the FDA has scheduled and subject to their feedback we continue to expect to activate this clinical trial in the first half of 2022.
We also began evaluating and prioritizing new potential indications for <unk>.
His evaluation includes assessment of previous trials for other <unk> inhibitors review of tumor microenvironment factors related to pediatric am tour activity and identification of non clinical and clinical evidence of pathways that may cooperate with <unk>. Our goal is to develop a lifecycle development plan in the first half of 2022 that will go.
Our long term plans because it's all Elisa.
As we've previously discussed our assessment of different <unk>, K and <unk> inhibitors, using our cell Cigna platform, let us initially to approach Pfizer about our interest in pursuing a collaboration to evaluate <unk>.
Subsequent to that initial internal study and as part of our due diligence on <unk> mechanism of action. We're conducting additional studies to evaluate <unk> inhibitor in breast and ovarian patients tumors using our <unk> platform we presented.
As a result of these studies at the ACR annual meeting this past April.
These studies demonstrated the value of leveraging ourselves, taking our platform to gain valuable insights about drug development opportunities. Thus as part of our lifecycle development planning efforts, we're conducting additional investigations using ourself cigna platform to support our assessment of different indications for <unk>.
Now I'd like to move on to the diagnostics side of our business.
So cigna, so acuity third generation diagnostic platform identifies the underlying cellular activity. This regulated pathway signaling that maybe driving a patient's tumor so that a matching targeted therapy can be identified.
Since this regulated signaling is too complex for molecular tests to characterize in most cases, our platform can identify new treatment options for patients who lack actionable molecular biomarkers.
Our strategy is to develop companion diagnostics that enable a pharmaceutical company to expand the number of patients eligible to receive their targeted therapy.
To achieve this we're collaborating with pharmaceutical companies.
The efficacy of their targeted therapies in patient populations selected by a cell signaling pathway activity tests.
The clinical trial results are favorable these collaborations mainly to advancement of a new indication that expands the market for targeted therapy.
In October so acuity entered into a clinical trial collaboration with the University of Rochester will not cancer Center and Puma biotechnology.
Open label Phase two trial will evaluate the efficacy and safety of tumors Pan her inhibitor <unk> or niraparib and the chemotherapy <unk> in previously treated patients selected with acuity sell cigna her two activity test who have metastatic her two negative breast cancer with brain metastases. So will be our first collaboration study in metastatic breast <unk>.
Patients with brain metastases patient population with an unmet and challenging medical need and we're hopeful south taking they may allow us to identify much needed new treatment options for them.
Based on estimates of patient enrollment rates, so acuity expect to obtain an interim results 12 months to 15 months after initiation of the trial followed by the final results 12 months to 15 months later enrollment is planned to begin by mid 2022.
We now have six clinical trial collaborations in place.
The ongoing fact, one in fact two trials. That's acuity is conducting are evaluating anti <unk> therapies in early stage <unk> negative breast cancer patients I think all of each of these trials is to demonstrate the breast cancer patients identified by ourselves Cigna <unk> pathway activity tests obtain a higher rate of pathological complete response to new adjuvant anti her to drug treatment than from current.
Standard of care chemotherapy.
Patients who receive a pathological complete response.
At new adjuvant drug treatment are less likely to have their cancer recur. So we believe ourselves Cigna test can play a significant role in extending the lives of many breast cancer patients.
Enrollment in both the fact, one in fact, two trials, though were negatively impacted by COVID-19 related delays during the third quarter hospitalizations of patients with COVID-19 increased dramatically. During this period, which led hospitals to reduce clinical trial related activities, especially those that require a screening step so to sell cigna.
We now expect interim results from a fact, one in fact II trials in the second half of 2022. This is later than our previous expectation of interim results in the first quarter of 2022.
Nevertheless, we are excited about these collaborations and the opportunity to work with some of the world's most prominent cancer research centers, we have additional collaboration discussions in progress and our goal is to announce new agreements in the coming months.
Now I'd like to turn our call over to Vicki Hahn.
A review of our financial results.
Thanks.
Good morning, everyone.
A brief overview of our financial results for the third quarter of 2021, and I invite you to review, our 10-Q, which will be filed tomorrow.
For a more detailed discussion.
Third quarter net loss was 6 million or <unk> 41 per share compared to $2 5 million net loss or <unk> 24 per share for the third quarter of 2020.
Because these quarterly net losses include significant noncash items.
Including stock based compensation the issuance of common stock and interest. We also included in our press release non-GAAP adjusted net loss for the quarter ending September 32021, our non-GAAP adjusted net loss was $5 1 million or <unk> 35 per share.
For the third quarter of 2021 compared to non-GAAP adjusted net loss of $2 million or <unk> 20 per share for the third quarter of 2020.
R&D expenses increased approximately $3 million during the third quarter of 2021 compared to the third quarter of 2020. This was primarily the result of preparation for increasing clinical activity related to <unk>.
Employee related expenses, including consulting fees accounted for $1 1 million of the increase the remaining increase of $1 9 million inexpensive as it related to clinical trials.
Patent legal fees related to patents and costs associated with the transfer of the <unk>.
Related activities.
The approximate.
$1 million increase in G&A during the third quarter of 2021 compared to the third quarter of 2020 overall, primarily from noncash stock based compensation.
Net net cash used in operating activities for the third quarter of 2021 with $4 million compared to $1 6 million for the third quarter of 2020.
This was the result of non-GAAP adjusted net loss of five $5 1 million offset by $1 million of working capital changes.
And <unk> 1 million of depreciation expense, we ended the quarter with approximately $94 million of cash and cash equivalents compared to $11 6 million of cash and cash equivalents on December 31 2020.
I will now hand, the call back to Brian.
Thank you Vickie overall.
About the progress we made this quarter and throughout 2021, the opportunity to develop <unk> significantly expands the markets. We are addressing the potential value. We can create for our shareholders and the impact we can have to extend the lives of cancer patients. We're looking forward to getting the FDA feedback on our phase III trial design soon while also continuing to lay the groundwork for.
The trial the new studies, we expect to activate on the diagnostic side of the company further supports the advancement of our cell Cigna platform.
And finally, our successful financing activities in 2021 provide us with significant capital to advance our development programs.
Operator, I'm ready now to open the call for questions.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate your line is in the question queue.
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Please while we poll for your questions.
Yes.
Our first question is coming from the line of Maury Raycroft with Jefferies. Please proceed with your questions.
Hey, Morry.
Hi, This is Kenny Chen on for Maury Raycroft I have a question about the.
San Antonio breast cancer conference data, what should we expect in terms of efficacy and follow up from that poster.
Sure. So this data will represent.
Data that was cut as of May versus January which was the previous data cut will include additional analyses that were performed better additional detail on patient characteristics.
Duration of treatment some exploratory analyses and again the data that has also been.
Cleaned or reviewed four data integrity. So it will essentially be consistent with what we've described.
Deeper dive into certain aspects of the study.
The patients.
Thanks, and I have one more follow up question about phase III trial design rigs.
Regarding patient baseline will you be screening for patients who fail first line CDK four sticks within three months or five months like how are you screening for patients who perform better is it by CDK time to its CDK failure.
So we'll be going into quite a bit of detail when we're ready to announce.
The design of our trial and those those type of screening characteristics and eligibility requirements will be.
Details that will we will speak to but I can speak generally because we've talked about this in the past.
<unk> to enroll patients who have progressed on prior CDK treatment.
And.
And could also have.
Progress on subsequent treatments as well to ensure we can enroll.
Quickly for this study.
There are different factors that may.
The ones that you stratify across your arm, so that you ensure theres equal representation of proportionate representation.
In your study arm so variables similar to the one you described would be an example of.
Stratification variable that could be used to ensure consistency across your arms, but those are details that we will we will.
<unk> provides.
When we.
Schedule, some time to talk about our trial design.
Thanks.
Thank you. Our next question is coming from the line of Boris <unk> with Cowen. Please proceed with your questions.
Great just one focus on the cell signaling test I'm, just curious how the logistics work for patients and physicians and what type of what tumor types are best suited for obtaining sufficient tumor sample.
Sure. So right now our focus is working with breast cancer patients.
While in fact, one in fact to our early stage patients. These are women, who are presenting with a tumor in Nebraska so tumors.
Very accessible they typically undergo biopsies for purpose of their initial diagnosis.
But in the case of our study they will get an initial.
Or rather an additional biopsy.
So that we have tissue available to evaluate using cell cigna.
In the.
In the future.
When we hope to be.
Diagnostic available.
In the clinic.
We would expect to get.
Tissue biopsies at the time the patient is.
As we.
Receiving their initial diagnostic biopsy.
And.
There's a lot of moving pieces to that but that's something that we've worked through and think we have a very good process. So that we can provide our results at the time that the diagnostic results would be available and theres ways of stratify those patients so that youre not generating a lot of false negative results.
<unk> studies with patients, who actually don't have a malignancy.
And then we will be providing those results to clinicians to inform the decision about the type of treatment women should we see in the later stage settings will follow.
<unk> process.
Biopsy is because of the prevalence of genomic testing have become much more standard of care for later stage patients and so in those cases. The biopsies are obtained typically from metastatic lesions, most common lesions and breast cancer are liver.
As an example.
Or lung.
The liver, we think would be the primary side.
Based on what we've seen so far.
And again, we would receive tissue and report on our results and on average.
Less than 10 days.
Gotcha.
Lastly for fact, one and two studies can you comment on exactly what you need to show them, what's the regulatory pathway for approval here sure. So the studies are designed to allow us to detect whether pay.
Patients who we've selected.
Get a.
Gently higher.
Proportion of patients achieving.
Achieving a pathological complete response pathway pathological complete response or PCR basically means that you will have eliminated.
The tumor.
And that's essentially the goal of treatment that women receive before they.
Who are early stage. So there are tumors local it's just in the breast it hasn't spread or spread beyond the lymph nodes.
<unk>.
The goal of that treatment is too.
Increase the or decrease the likelihood the womens.
Cancer will recur.
So if we were able to demonstrate that and we would expect.
Two kind of collaborate with whomever the drug sponsor is.
Let's say, it's genentech with the fact, one trial is an example, and genentech at that point would be driving the bus they would be the ones, who would be driving discussions with regulators about what.
The regulatory pathway would be.
For moving forward with in their case and label expansion.
The regular and then our our activities from a regulatory standpoint with.
Got to be conducted in parallel.
I have a specific guidance that talks about.
Concurrent valuation of.
Either label expansions or new drug approvals and companion diagnostic.
Approvals and so we would operate within that framework and then ultimately depending.
Depending on what the regulatory pathway is or maybe additional data that the FDA would require we would take that next step and with the goal of ultimately being a test that could be available to <unk>.
Breast cancer oncologists to help inform their treatment decisions for these patients.
Great. Thank you very much for taking my questions.
You're welcome.
Thank you as a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Our next questions come from the line of Alex Nowak with Craig Hallum. Please proceed with your questions.
Great. Good afternoon, everyone. I was just hoping Bryan you can highlight some key questions that you said over to the FDA for feedback on data and do you think any of the feedback could potentially change your plans for launching a pivotal phase III in the first half of 2022.
Well, yeah, I'll fax whoever those questions Alex.
Yeah.
Okay.
Yes, I'm sure you appreciate that.
No.
The goal of the meeting.
You typically have kind of a.
Topics that are closer related because the FDA is divided into different.
Subject matter areas and so in our case, we wanted to bring subject matter experts who would provide.
Provide input and guidance on the clinical trial design.
And so our questions specifically related to.
The approach we are proposing to take with our phase III design.
We spent a.
Lot of time with breast cancer Kols.
Over the summer too.
A review of the data.
That we've shown.
We've presented.
And also then to discuss.
The actual design of the phase III study that we were proposing and we.
Provided these kols different options, we wanted to spur discussion and we found during the series of scientific advisory meetings that there was a pretty pretty good consensus on what made sense, which was consistent with what our thinking was so it was encouraging to us.
Our approach was consistent with what.
These oncologists were suggesting or <unk>.
Thinking would be the right approach.
Our goal is to develop a study.
That has robust.
Approach that really well.
Lead.
Assuming we meet our endpoints.
Lead people to accept the results and that means you have to have a comparator arm.
As.
Appropriate represents real world activity.
And.
But one that.
The investigators we consider the biggest challenge that they want to make it realistic.
But you take into account other factors stratification variables as an example, so that you make sure you.
You are eliminating any biases that could potentially.
Confound your data.
And then there's just a lot of details that go into these protocols, which which we reviewed in detail with these investigators and and so those are the types of that's.
That's the type of information, we provided to the FDA the process involves providing a very detailed document.
With background information and the information about the trial design and specific questions and so.
By the end of the meeting itself will who will review those questions.
We will have a discussion the.
The process that involves a kind of a memorial ization of that conversation in the form of minutes and those minutes come from the FDA in this process to receive them and them to review them.
Necessary change them or suggest modifications. So so it's a bit of an art not ordeal, but it's certainly a bit of a process to.
At this stage of our development to get this input now there are different programs that would allow you to get expedited.
Meetings and feedback and we're aware of those and certainly the.
Positioning ourselves to take advantage of those.
But as a new sponsor.
We're basically starting.
Having to use kind of a standard.
Meeting process to get feedback and it's a very structured approach with timeline some of which are kept some of which are on their part.
And so that's really the only way to really effectively interact with the agency at this point, but it will give us the input we need and again based on the we think it very consistent input we received.
Sure.
We think we have a good approach and and.
I feel good about.
Where we've where we've ended up.
No. That's helpful. I remember going back a couple of quarters ago. There was a question whether or not you would need to run a bridge phase two.
So you are pretty confident this can move directly into a pivotal study just wanted to get.
So questions like that so the issues that surround whether you go to phase one to phase III.
Phase one phase two.
Really involve two factors one is safety so depending on how much data has been generated for the drug.
The agency could could say that you don't have enough data.
Go into a registrational study to characterize the safety.
Need to do a phase II study to further flesh out, but the safety signals are.
Have those been studied in over or nearly 500 patients.
A variety of different drug combinations phase one be enrolled over.
138 patients. So the safety profile has been pretty well I would say pretty well established.
And we would argue it's favorable.
Adverse events.
Would limit its use in the clinic in our opinion and the opinion of the investigators.
That's one factor the second factor relates to spot what they would call sponsor risk.
And so it's become much more prevalent if you were to look at.
The design of studies today Youll see in many cases phase one phase III study designs.
They have sufficient safety data.
Justify going to a bigger study with more patients and then they have the option depending on how favorable or not the phase. One studies are to go right to a phase III and so this is a case, where we believe the data.
Great so kind of a certain margin of safety too.
Meter and endpoint.
That would be clinically relevant and statistically significant.
For approval.
And so essentially.
We believe it's the risk if you want to call it that.
It makes sense because the option of going to phase III. Just means you add a couple of years to your program and we think when you balance that.
The additional time and expense of going to phase two with the advantage of.
Moving the program through more quickly it warrants moving directly to phase III and the agency.
Essentially views that our decision.
Yes.
In your experience.
Okay got it that makes sense, Brian and maybe could you just expand on the delays with the fact, one of the factors studies.
Originally tracking towards data next couple Monday, no I mean, the world claim interesting.
If you guys go back and look at the data.
For Covid I'm sure. Many of you look at those charts.
I do and you look at the hospitalization curves if you look at that third week of July.
First second week of July they bottomed out and then started climbing almost immediately by early August.
We're getting to levels that were bothersome and and then a few weeks later.
Troublesome.
And so.
Our trial requires patients to come in to get a biopsy.
That extra procedure.
What we found.
Is.
In an environment, where hey, the hospitals or centers.
People, who have infectious disease, which obviously for cancer patients not where you want to be.
And b, because the management of patients with Covid.
It's very labor intensive.
The people who are typically assigned to staff.
Clinical trials simply been assigned elsewhere and so the studies for all intents and purposes stop because you need.
Individuals.
Monitors to enroll these patients are screen them.
Get them consented to study and there is simply when these hospitalizations start to ramp at least this is the experience.
We had in 2020.
They are just not available and that's what we experienced beginning in August it was very sudden.
Caught everybody anywhere so I think everybody in July was thinking we were through the worst of it and.
We were waving goodbye to Covid.
And ultimately what happened.
Yes that makes sense I appreciate the update thank you.
You're welcome.
Thank you there are no further questions at this time I would like to turn the call back over to Brian Sullivan for any closing comments.
Thank you for attending the call. We appreciate your interest in our company and look forward to updating you in the future.
Talk to you later goodbye.
This does conclude today's teleconference. We appreciate your participation you may disconnect your lines at this time.
Have a great day.