Q4 2021 Celcuity Inc Earnings Call
Greetings and welcome to acuity fourth quarter and full year 2021 results conference call.
At this time all participants are in a listen only mode.
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, this conference is being recorded I would now.
Like to turn this conference over to your host Mr. Robert Thank you Sir you may begin.
Yes.
Thank you Laura good afternoon, everyone and welcome to <unk> fourth quarter and full year 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 fourth quarter and full year ended December 31st.
2021, the press release can be found on the investors section of our website joy.
Joining me on the call today are Brian Sullivan, So acuity is chief Executive Officer, and co founder Vicky Hahn Chief Financial Officer.
As well as Igor Gorbachev ski Chief Medical Officer, who will be available during the Q&A.
Before we begin I would like to remind 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 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. These non-GAAP measures are used by management to make strategic decisions forecast future results and evaluate the Companys 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 a table reconciling the non-GAAP financial measures to GAAP measures in today's press release.
So with that I would like to turn the call over to Vicki Haun, So acuity CFO to review the financial results prior to a business update.
Thank you Robert and good afternoon, everyone I'll provide a brief overview of our financial results for the fourth quarter and full year.
2021 and I invite you to review, our 10-K, which will be filed later today for a more detailed discussion.
After my remarks, Brian will provide a corporate update that includes a presentation that can be found on our website or through the link in our earnings press release.
Our fourth quarter net loss was $6 8 million or 45 cents per share compared to $2 6 million net loss or <unk> 25 cents per share for the fourth quarter of 2020 net loss for full year 2021 was $29 6 million or $2 20.
One cents per share compared to $9 5 million or <unk> 92 cents per share for the same period in 2020.
Because these quarterly net losses include stickney significant noncash items, including stock based compensation the issuance of common stock and the interest. We also included in our press release non-GAAP adjusted net loss for the quarter and full year end.
Ending December 31, 2021, our non-GAAP adjusted net loss was $5 6 million or <unk> 37 per share for the fourth quarter of 2020 , one compared to non-GAAP adjusted net loss of $2 1 million or 21 cents per share for the fourth quarter of 2020 non-GAAP .
Adjusted net loss for the full year 2021 with $21 4 million for it.
<unk> 60 per share.
<unk> to non-GAAP adjusted net loss of $7 7 million or 75 cents per share for the full year 2020.
R&D expenses were $5 5 million during the fourth quarter of 2021 compared to $2 1 million for the fourth quarter of 2020 R&D expenses for the full year 2021 were $25 8 million compared to $7 7 million for the same period in 2020 the app.
Approximately $18 1 million increase during the full year of 2021 .
Is it primarily from a $10 million upfront license fee related to the execution of the Pfizer license agreement.
Which included 5 million of noncash expense for issuance of common stock.
The remaining $8 1 million increase primarily resulted from expenses initially associated with the transfer of kit that Elisa related activities from Pfizer to saw acuity and subsequently the continued support and development of cadet Elisa.
General and administrative expenses were <unk> 8 million for the fourth quarter of 2020 , one compared to <unk> 4 million for the same period in 2020 .
G&A expenses for the full year, 'twenty, and 'twenty, one where 2.6 million compared to $1 9 million for the prior year. The approximately 7.7 million increase in G&A during the full year 2021 compared to the full year of 2020 our roads.
Primarily from noncash stock based compensation.
Net cash used in operating activities for the fourth quarter of 2020 , one with $6 1 million compared to $2 1 million for the fourth quarter of 2020.
This was the result of non-GAAP adjusted net loss of $5 6 million and working capital changes of approximately <unk> 6 million offset by <unk> 1 million depreciation expense.
We ended the quarter with approximately $84 3 million of cash and cash equivalents.
Compared to $11 6 million on December 31, 2020, we.
We expect this cash to take us into late 2023 or early 'twenty 'twenty four.
And now I will hand, the call over to Brian .
Thank you Vicky and good afternoon, everyone and thank you for joining us today as always we appreciate your continued support of cell acuity and in my remarks, I'll first provide a brief update of key activities over the past few months and then provide a more detailed update of the clinical development program forget they'll all of a sudden my.
My remarks will include a review of the pivotal phase III trial design, we recently finalized and this study will evaluate <unk> in patients with HR positive or two negative advanced breast cancer I will refer to the slide number of the presentation that corresponds to my remarks, and then we'll open up the line for questions.
Now please turn to slide four.
We laid important groundwork to advance our data to lesser breast cancer program. During the past few months in November we entered into a clinical trial collaboration and supply agreement with Pfizer to provide Pablo cichlids known commercially as eyebrows for use in our phase III clinical trial at no cost to sell acuity.
This will result in substantial cost savings for our phase III study.
In December we presented updated phase one b data during a spotlight poster discussion session at the 2021 San Antonio breast cancer Symposium.
The data provided additional information about the characteristics of enrolled patients the impact of the dosing schedule on efficacy time to first response and duration of treatment.
The promising antitumor activity and Tolerability of the therapy in patients treated with the three weeks on one week off get out solicit regimen supports use of this dosing schedule and our pivotal study.
In January the FDA granted fast track designation to get a told us <unk> for the treatment of patients with HR positive her two negative advanced breast cancer after progression on CDK four six therapy.
Fast track designation is granted by the FDA for products, which demonstrates the potential to address the serious unmet medical need.
This designation should enhance our ability to interact frequently with the F D. A to discuss our development plan.
And most importantly, and most recently, we finalized the design of our pivotal phase III clinical trial forget it told US is following very productive meetings with the FDA.
So now please turn to page five.
To provide context for the trial design. It I'd first like to briefly review why we believe get us Elizabeth such great potential to provide more effective treatment for women with breast cancer.
This potential reflects both the importance of the pathway targets got until it inhibits and it's highly differentiated mechanism of action and pharmacokinetic profile.
That will tell us what targets P. S. M tour, which is considered one of the most important and complex pathways involved in cancer.
Blockading Pi's V K M Tor efficacious Leigh Anne safely, however was challenging because of its structural complexity and its linkage to key cell metabolic processes.
Got it to listen, but dresses the structural complexity of the pathway.
Inhibiting all four class one P S. Okay isoforms and them talk one and M. Torque to this is the optimal approach biologically because it avoids the cross activation of uninhibited subunits, and resulting drug resistance that can occur with P. S. At BK isoform specific or MTR specific inhibitors.
Completely blockading the pathway also enhances the potential to induce synergistic inhibition with other targeted therapies, such as CDK four six inhibitors.
Please turn to slide six now.
Got it or tell us who's differentiated chemical structure, an intravenous formulation results in a very favorable pharmacokinetic profile. The drug has potent at low or sub an animal or concentrations and can maintain pathway inhibition with a tiny fraction of drug mass compared to approved oral <unk> inhibitors. This results in a safety profile to compare.
It's very favorably against approved isoform specific P. S K inhibitors.
And thus we believe get us all the subs unique properties positioned to realize the significant potential first envisioned for P. S. K therapies. When the pathway is critical role in cancer was discovered.
I'll now turn to slide eight.
Get until the initial potential target patient population is patients with HR positive her two negative advanced breast cancer, whose disease progressed during treatment with the CDK four six therapy. We estimate this represents over 100000 breast cancer patients globally on an annual basis.
Please turn to slide nine.
There are limited options for patients, whose disease progressed on a CDK four six inhibitor and the efficacy is also limited.
Current standard of care treatment regiments include either a selective estrogen receptor degrader or surge such as full restaurant or a regimen that combines an M Tor or P. S. Okay alpha targeted therapy with an endocrine therapy.
Finding more effective treatment for these patients is a significant unmet need.
Please turn to slide 10.
Development of oral surge to replace Sylvester and as one therapeutic strategy. Several pharmaceutical companies are pursuing to address this unmet need.
Unfortunately clinical studies evaluating two different oral serves reported data recently that suggest this approach may not offer the clinical improvement in median progression free survival or PFS that was expected.
We believe these results highlight the need for new therapeutic approaches in particular the data from these third clinical trials and from the trials of existing standard of care therapies suggests additional oncogenic pathway drivers and resistance mechanisms must be targeted.
Please turn to slide 11.
Yeah.
The available evidence indicates that resistance to CDK four six inhibition as a transient adaptive mechanism and most likely involves the P. F. K M. Tor pathway. This data indicates that CDK four six signaling is restored in CDK four six resistant tumors.
P S K M Tor inhibitors applaud.
Continuing CDK four six inhibitor treatment in combination with a P. S O K M Tor inhibitor.
Patients who progressed on their prior CDK four six inhibitor with both blockade the reactivated CDK four six pathway and prevent adaptive activation of the P. S. We came to a pathway.
This suggests the limited efficacy induced by current standard of care therapies in patients who have progressed on a CDK four therapy reflects a mechanistic and adequacy of relying on partial P. S. O K M Tor and no CDK four inhibition to address this very complex disease mechanism.
Please turn to slide 12.
A phase one b study evaluated the saipov assists in the first and second line setting for women with advanced breast cancer women with HR positive <unk> negative advanced cancer, who had not received prior therapy for advanced disease were treated with get US. All this combined with the CDK four six inhibitor polycyclic and the aromatase inhibitor letrozole.
The median progression free survival period for this patient cohort was 31.1 months and the objective response rate or O R was 85%.
These results compare favorably to published data for Publix equipment combination with matches off from the Paloma Two study where median PFS of 24.8 months in O R or a 55% was reported.
Please turn to slide 13.
For patients who have progressed on prior CDK four six treatment you got up to elicit dosed on an intermittent schedule combined with policy club infill Vestron reported data compares favorably to published data with current standard of care regiments there.
Median progression free survival period for this patient cohort was 12.9 months and the objective response rate was 63%.
Please turn to slide 14.
In light of encouraging results forget until this combined with Pablo say club and for restaurant and patients who progressed on prior CDK four six therapy. We concluded that evaluation of this regimen in a pivotal phase III study.
Was warranted.
The design of the clinical trial setting required us to take into account several important factors.
First standard of care in second line setting for HR positive <unk> negative patients differs based on P. A picture ECA status.
But the 35% of patients with a picture you see a mutation they typically receive the P. O three K, often herbert or Apple Lipson combined with full restaurant.
The 65% of patients who do not have the PEC detectable pick three C. O mutations most commonly receive either full restaurant as a monotherapy or everolimus plus eczema Stan.
Given the different treatment options and outcomes for these two patient groups formal testing of the efficacy of our regimen in each picture you see a subgroup is warranted.
To evaluate efficacy in advanced breast cancer. The standard primary endpoint is progression free survival in the first and second line setting.
PFS as an endpoint or supported the registration of nearly at all recently approved FDA therapy for advanced breast cancer.
Please turn to slide 15.
Before finalizing our pivotal study design, we saw formal feedback from the FDA, which we received during two very productive and collaborative meetings now that we have the feedback we finalized the trial design.
Our pivotal study named Victoria, One is a phase III open label randomized clinical trial to evaluate the efficacy and safety and get it to elicit a in combination with four vessels with or without power cycling in adults with HR positive her two negative advanced breast cancer, whose disease has progressed after prior CDK four six.
<unk> in combination with an aromatase inhibitor.
This will be a multicenter international trial, which we expect to enroll at approximately 175 clinical sites across the U S Europe and Asia.
We expect to initiate the Victoria, one clinical trial in the first half of 2022 .
The clinical trial will enroll patients regardless of their picks VCA status, while enabling formal testing of efficacy in both the pick three C. A wild type and mutation subgroups.
For patients, who don't have confirmed picks VCA mutations there will be two investigational arms.
Elisa combined with full restaurant with her well with with or without Palo cyclic and the control arm.
Patients will be randomly assigned on a one to one to one basis to receive either get up to elicit Paolo cyclical infill veteran in arm a.
Got it so let's open for investment in arm B.
Or for investment monotherapy in arm C as the control.
Up to 351 subjects, who lacked picks receipt mutations will be enrolled.
The three arm design will also show the contribution of get until this has been the combination.
Subjects, who have picked three C O mutations will be randomly assigned on a one to one basis to receive either the investigational therapy, you get it's Elisa public cyclamen sylvestris and R&D.
Or Apple lips, and full restaurant in arm E. As the control up to 300 subjects, who are Pixar UCI mutations will be enrolled.
Three primary our primary in our primary end.
Once or progression free survival per resist one one criteria as assessed by blinded independent Central review.
In subjects, who lack pick three C O mutations the PFS in subjects in the two investigational arms, a and b will each be compared to the control arm C.
In subjects, who are picture you see mutations the PFS of arm D subjects will be compared to our E subjects.
As I mentioned earlier, there are roughly twice as many patients who lack picks roussin mutations as those who have given this data for the two primary endpoints for the subjects lacking picture you see mutations will be available earlier from the data for those who are picture ECA mutations. Our current estimate is that the primary analysis for pick three C. A non mutated patients would be available.
<unk> sometime in the first half of 'twenty four and the data for the picture you see a mutated patients would be available in the second half of 'twenty 'twenty four.
Now please jump to slide 18.
The data from our phase one B study suggests that the antitumor effect of get up to elicit when combined with Palmas eclipsing Sylvester is similar in patients with or without picks Rishi amputations and each subgroup, while acknowledging the small sample sizes.
Data compares favorably to recently reported prospective study data for the control therapies and comparable patient populations.
Probability of progression free survival at 12 months with it get it to elicit regimen was 48.5% and non mutated patients compared to 10% and the recently reported Emerald study peripheral restaurant.
That included full restroom.
And the mutated subgroup the probability of progression free survival at 12 months was 60% compared to 27% reported in the by leaf study for the uplifts of regimen.
So to wrap up we're more excited about the opportunity to develop get out solicit than we've ever been we've built an incredibly talented team of drug developers who've taken a fantastic drug to a pivotal phase III clinical trial in a very short period of time, we're hopeful that this will only represent the first of what we think will be many opportunities for us to impact a lie.
<unk> of cancer patients.
Operator, I'd like to now open the call for questions.
At this time, we'll 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. You May press star to move your question from the Q.
Once using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys, one moment, while we poll for questions. Our first question comes from the line of Maury Raycroft with Jefferies. You May proceed with your question.
Hi, Congrats on the update today and thank you for taking my questions.
My first question is just.
Hi can you hear me.
I can hear you okay. Okay great.
First I was wondering if you can talk about the conversation with FDA on the different stratification for the phase III that you have listed on slide 16, how these factor into your hypothesis for good analysts said and are you powered based on any of the stratification.
Well I'll say a brief comment and then you work in filling the gaps you know so the stratification variables are no one's typically found in these studies. So there was nothing unusual about them and we're following conventional statistical Oh powering of the.
Subgroups, you or maybe you could.
Expand on that a little bit.
Oh, yeah. Thank you for the questions certification factors he used to make sure that arms are balanced for important clinical parameters are in each.
Staggy arm that are primarily golf would that and in terms of stag at par.
Its power to detect.
Did that cause significant but also clinically meaningful difference between stadia arms come on that Brian mentioned them as well as a control arm. That's a median progression free survival as a primary endpoint as you see in the studies.
Main golf with J D power.
Got it Okay. That's helpful and then based on the key eligibility criteria, you've got let's say how close do you think you'll be able to get with enrolling a patient population that's similar to RMB as where you show data in the phase <unk> study.
Go ahead, you are Ah I cant answer. This question, we believe that the results from study <unk> 215, and O nine RMB that we presented to you will represent very well, there's global stadia involvement and will go away if at all there.
Claws into real World data as you will find our information in the poster median number of prior brickman for those patients or to a with a good number of patients are receiving a at least to a number of probably a three.
It means for advanced breast cancer, and that's a population that they're likely to be enrolled in phase III as well.
Got it that's helpful.
Last question I, just wanted to ask about anything you're doing differently in the phase III are proactively in the phase III for managing Tolerability, such as stomatitis in the study if you could talk more about that.
I cant answer this question as well.
Yes, this guy give away.
Very detailed guidance in Texas to management as well as inclusion all the prophylaxis that is accepted and expect that as well for this patient population. So for example, steroid based mouthwash it would be mandatory for this patient in this study and as we presented previously in.
The phase one B study that prophylactic therapy was not used for all patients. So we believe that safety signal and profile in a phase III study the bad times.
Great. Okay, Congrats again and thanks for taking my questions.
Thanks Maury.
Our next question comes from the line of Gil Blum.
With Needham <unk> Company you May proceed with your question.
Hi, everyone and good afternoon, and thanks for taking our questions as well.
Maybe a kind of a general one.
It's pretty pretty large study I mean any assumptions you guys may have on.
Total cost for a study of this size.
Sure well I guess the way we look at that as you know what what is the current cash.
Where does that take us in and basically we think it gets us to roughly the first primary endpoint and you know the study.
We'll get to the first primary endpoint.
Yeah, probably midway through this study so that you know the activities will continue well after we get our initial data and and so you know the the trial costs are spread out.
Over much longer periods and just the first two years until we get the initial primary analysis.
And that's that's very helpful.
And maybe just a comment on alcohol listed here it looks like it's well tolerated and did you have any additional comments, especially in comparison to go back to what I said.
Sure.
I'll say, a few words and Igor.
Provide some perspective as well, but that's one of the first.
A piece of feedback we received from investigators and from clinicians when we started looking into get to solicit have been bringing it in house.
Yeah I'll Phillips.
He was approved as an option at it improved outcomes, but there was a very high discontinuation rate in the pivotal study that led to approval of 26% and the more recent by leaf study you know the discontinuation rate was around 18%. It has very high grade three grade four hyperglycemia.
Because it's an oral drug means these patients can be potentially become very ill.
Without seeing their doctor for an extended period of time and from a clinician standpoint that.
Is very challenging for them and frustrating for them. So yeah. We we've heard from a number of physicians that said, if we just matched and that's not the objective, but just using it as a reference the.
The efficacy with a safety profile that our drug has that we would be substantially preferred over that drug just on safety alone.
You go or did I Miss anything there.
No that's.
Good summary, as it's well published Oh, they just continuation rate Ah patients who are treated with palisade.
It could be quite high in double digits and it's not only include hyperglycemia and number of other toxicity that could lead to that I know preliminary data from phase one B study and just a reminder, almost 500 patients in healthy volunteers had been treated with a go to college.
Single agent or in combination with other therapies. The safety profile has been established quite well and based on feedback from experts and our potential investigators.
Compare it again on papers.
This will be first trying to my stylist favorably.
Two other pays for K O R inhibitors.
Alright, and then maybe one last one.
Can understand this might be a little hard to estimate.
Considering the size of the study have you guys thought of any Covid proofing I mean, we've seen some pretty significant delays, especially in January thank you.
Right well.
The patients that will be enrolling are ones that are currently receiving treatment.
And they've progressed and so you know that.
The standard of practice standard practice for these patients is that they will be put onto.
New new therapies.
And the feedback we received from investigators is that you know these types of trials are.
The ones that haven't been as effective I mean, it's obviously it tends to be very situational.
But we will have a broad geographic dispersion of Ah Ah study sites are we won't be in Russia, and the Ukraine. So we won't be impacted by you know what.
What's going on there.
But obviously, we can't predict the future, but if you know.
The current trend lines continue having broad range of countries and a wide number of sites is really about the only steps you can take to mitigate any any potential impact.
Of re ramping of Covid.
Alright, I mean under the thought came to me because it is an IV administered drug that needs to be administered in the hospital setting.
Alright, Thank you very much for taking our questions and congratulations on the welcome. Thank you happy having everything set up.
Thanks.
As a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
Our next question comes from the line of Alex Nowak with Craig Hallum Capital. You May proceed with your question.
Great Good afternoon, everyone.
Brian It looks like you've had to interactions with the FDA regarding the pivotal trial design. So maybe you could just speak to some of the feedback that you received that ultimately how did the design of the pivotal study here changed from what your initial consumptions where versus what we're seeing today.
Well I think just briefly I mean, we we had you know very constructive collaborative discussions and.
And you know our whole point of it was to get their input on the final study design.
We're pleased with the outcome I mean, they're really you know the second study was really just to confirm what we talked about in the first as you know this is really our first interaction with the agency and we wanted just to be us.
Cooperative and collaborative as possible and and so we kind of accomplished our goals and you know.
We're very very happy with the outcome.
No that's good.
<unk> submitted four or I guess could you send it to FDA for approval based on that first at the second interim analysis or I guess, how long do you need to run the study and get the bag and information before you have the right data set there are some that just the clarify sure you were why don't you touch on that.
Since the stadia in both mutated population and wild type patients.
And by events, one number of events are appropriate for analysis reached.
We will initiate discussions with regulatory agencies and basins is discussion filing could debate.
On that group of patients that has the results first.
Yeah.
Okay understood and then just any update broadly regarding the facts studies that are out there.
Wanted to dig it moves to the first half of 2023, just I'm sure that students would be out of the crowd variant, but just thoughts there and ultimately how that affects the timelines for back 345.
Right so.
I really did throw a wrench in things I mean that was a surprise I think to everybody as we've talked about on our last call. We saw activity pick up again back in it in February .
But we lost you know those three months and and so you had to push back you know when we expect to have data accordingly.
The other studies you know got similarly affected.
And because again these patients are coming in for <unk>.
Specific procedure, you'll biopsy.
That tends to get a little bit more impacted than.
Something that just required drug.
Got it understood makes sense I appreciate the update congrats on finalizing the study design here.
Ladies and gentlemen, we have reached the end of today's question and answer session I would like to turn this call back over to Mr. Brian Sullivan for closing remarks.
Well, thank you everyone for listening in and.
Participating on this call will be at the Canaccord and Needham conferences in April well look forward to speaking hopefully with some of you. Then if you have any additional questions. Please feel free to contact US hope you have a good evening goodbye.
This concludes today's conference you may disconnect. Your lines at this time. Thank you for your participation and enjoy the rest of your day.
Yeah.
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