Q3 2022 Celcuity Inc Earnings Call
Yes.
Good day.
And welcome to the <unk> third quarter 2022 financial results Conference call.
At this time, all participants will be in a listen only mode. Later, we will conduct a question and answer session.
I will now turn the conference over to your host Robert with ICR Westlake.
You may begin.
Thank you operator, good afternoon, everyone and welcome to <unk> third quarter, 2022 financial results and business update webcast and conference call.
Earlier today, So acuity incorporated released financial results for the third quarter ending September 32022.
The press release can be found on the investors section of the 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's, Chief Medical Officer, who will be available during Q&A.
Before we begin I would like to remind listeners that our comments today will include some forward looking statements. These statements involve a number of risks and uncertainties, which are outlined in today's press release and in our reports and filings with the SEC.
Actual events or results may differ materially from those projected in the forward looking statements such forward looking statements and their implications involve known and unknown risks uncertainties and other factors that may cause actual results or performance to differ materially from those projected.
On this call. We will also refer to non-GAAP financial measures. These non-GAAP measures are used by management to make strategic decisions forecast future results and evaluate the company's current performance management believes the presentation of these non-GAAP financial measures is useful for investors' understanding and assessment of the comps.
<unk> 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.
And with that I'd like to turn the call over to Brian Sullivan CEO of cell QED.
Thank you Robert Good afternoon, everyone and thank you for joining us today.
Im pleased to report that we made significant progress in the third quarter advancing Victoria, one our phase III clinical trial.
Victoria, one is evaluating the safety and efficacy of our lead drug product candidate and get them to listen and investigational Pan <unk> inhibitor for the treatment of HR positive <unk> negative advanced breast cancer that has progressed after treatment with the CDK four six inhibitor in combination with an aromatase inhibitor.
One of our key objectives for the third quarter was completing the selection of the clinical trial sites that will participate in this registrational study.
<unk> this objective and selected approximately 200 clinical trials sites located in North America, Europe , Asia, Australia, and Latin America.
Throughout the site selection process, we were very encouraged by the significant interest we received from sites and principal investigators across the world and participating in the study.
Many of the world's most respected breast cancer clinical researchers are participating.
The next critical objective for our team is to activate the selected sites. So that we can begin enrolling patients. So acuity is not working closely with our selected sites to assure completion of regulatory and operational activities at each site as planned.
First site was activated in the third quarter and we're on track to achieve our site activation goals across all regions. We also remain on track with our prior guidance of administering the first patient dosed by the end of the year and we continue to expect data for the <unk> non mutated patients to be available in the second half of 2024 and data for the <unk> mutated.
To be available in the first half of 2025.
As we have previously reported during the third quarter. The U S. FDA granted breakthrough therapy designation to get us to listen for the treatment of HR positive <unk> negative advanced breast cancer.
This designation allows for more intensive guidance from the FDA and a potentially accelerated review time of relevant criteria are met.
Elisa.
So listen previously received fast track designation from the FDA in January 2022.
We estimate that this initial potential target patient population represents over 100000 breast cancer patients globally on an annual basis.
Current standard of care for these patients includes endocrine therapies, such as full restroom and.
It means that combined Sylvester with an <unk> specific or <unk> alpha specific targeted therapy is.
Therapies offer only modest progression free survival periods and in the case of the approved <unk> Alpha inhibitor, a very challenging safety profile.
Also during the quarter, an abstract with updates the results from our phase <unk> advanced breast cancer study was accepted for a spotlight poster discussion presentation at the 2022, San Antonio breast cancer Symposium in December .
Seminary data from this study was presented last year at a spotlight posted a discussion and included data from the cohort of second and third line patients who received the three weeks on one week off dosing schedule that we're using in our phase III study.
For patients in this cohort the objective response rate was 63% in the median progression free survival period was $12 nine months.
These results compare very favorably to historical controls from current standard of care therapies.
Compelling safety data was also reported for this cohort only one patient or 4% of the total discontinued treatment due to an adverse event.
In addition, only 7% of patients reported grade three or grade four hyperglycemia and no patients discontinued treatment due to hypoglycemia.
Now I'd like to move on to the diagnostic side of our business. So I'll Cigna.
<unk> third generation diagnostic platform identifies the underlying cellular activity dysregulation pathway signaling that maybe driving a patient's tumor so that a matching targeted therapy can be identified.
Our strategy is to combine to develop companion diagnostics that enable a pharmaceutical company to expand the number of patients eligible to receive their targeted therapy.
We expect interim results from the South Cigna platforms fact, one in fact two trials in early stage HR positive <unk> negative breast cancer patients in mid 'twenty three.
And finally I'd like to welcome Dr. Polly Murphy to our board of Directors Poly is over 20 years of business development and commercialization experience at leading global pharmaceutical companies, including 12 years with positions of increasing responsibility at Pfizer.
We're looking forward to having the perspective for broad industry experience will bring to our board.
Now I'd like to turn the call over to Vicki Han our CFO to review our financial results.
Thank you, Brian and good afternoon, everyone I will provide a brief overview of our financial results for the third quarter of 2022.
I invite you to review the 10-Q, which will be filed later today for a more detailed discussion of.
Our third quarter net loss was $10 9 million or <unk> 75 per share compared to a $6 million net loss of 41 per share for the third quarter of 2021 for.
For purposes of calculating net loss per share the reported net loss of 75 per share included an additional two cents loss per share related to an approximately 3.3 million deemed dividend, resulting from a warrant modification.
Because these quarterly net losses include significant noncash items, including stock based compensation and interest. We also included in our press release non-GAAP adjusted net loss for the quarter ending September 32022.
non-GAAP adjusted net loss was nine 5 million or <unk> 63 per share for the third quarter of 2022 compared to non-GAAP adjusted net loss of $5 1 million or <unk> 35 per share for the third quarter of 2021.
R&D expenses were $9 6 million for the third quarter of 2022 compared to $5 million for the third quarter of 2021, the increase of approximately $4 7 million during the third quarter of 2022.
It was driven by $1 2 million related to employee expenses and the remaining $3 5 million increase primarily related to activities supporting the Victoria one pivotal trial.
General and administrative expenses were $1 million for the third quarter of 2022 compared to <unk> 6 million for the same period in 2021, the increase of approximately <unk> 4 million was driven primarily from noncash stock based compensation.
Net cash used in operating activities for the third quarter of 2022 was $9 3 million compared to $4 million for the third quarter of 2021.
This was the result of non-GAAP adjusted net loss of $9 5 million offset by working capital changes of approximately <unk> 1 million and depreciation expense of $1 1 million.
We ended the quarter with approximately $57 $5 million of cash and cash equivalents compared to cash and cash equivalents of $84 3 million on December 31, 2021.
I will now hand, the call to Brian . Thank you Vicky operator, we'd like to take questions now.
Thank you.
If you'd like to ask a question. Please press star one on your telephone keypad now.
Will be placed in the queue in the order received.
Please be prepared to ask your question when prompted.
Once again, if you have a question. Please press star one on your phone now.
And our first question today will come from Maury Raycroft with Jefferies.
Hi, Congrats on the progress and thanks for taking my questions I've got two two questions.
So prior you had said the study would be running at about 175 sites worldwide from 15 countries and today in the update you are mentioning are these selected 200 sites can you clarify if you're still only run. This study at about 175 of the 200 selected sites or if you need all 200 sites and maybe.
My reasons for why you would need 200.
When we first announced the study design I think we indicated that we would do 175 plus sites and so at a minimum we estimated that we wanted a 175 sites, but we.
We were able to get qualified sites and get more of them. We wanted to do that and it generally just reflects the significant interest we had and we think the benefits of the company as well and the fact that enhance enrollment because you have more active sites with a broader.
Enrollment population that there'll be.
Available.
Got it that makes sense do you think.
Could it actually does it make your enrollment more robust or could it potentially accelerate timelines. Some what are your thoughts on that.
Yeah.
We don't want to change our guidance, it's certainly having more sites.
Increases the probability of meeting an enrollment target I would think of it that way.
Got it Okay and then one other question.
Just wondering if you could provide specifics on what needs to be completed in order to dose that first patient by the end of the year and at your first activated side can you comment on whether some patients have been enrolled mature.
Well, we haven't enrolled our first patient yet and so we just activated our first site and.
And variety of activities are required.
Once you initiate a study.
And one of the first one of the first steps as selecting your sites, which is a formal process.
Once you have selected a site to participate in the trial certain regulatory financial operational documentation must be approved study must then be approved by central or institutional IRB. Some cases approval from an independent ethics Committee or scientific committees also required. So all of these steps have to be completed before site can be considered active.
And then once the study site is active.
<unk> began working with.
Their patient population.
Our patient population has an extended duration of treatment.
With their first line treatment, that's typically a CDK four six and <unk>.
Sure.
<unk>.
Yes.
Occurs over a period of time these aren't patients.
That arent necessarily immediately available.
But over time as you activate more sites you got into.
Yes.
Very predictable enrollment pattern.
Got it Okay makes sense, thanks for taking my questions.
And we'll take our next question from Boris <unk> from Cowen.
Great I have two questions one on the Victoria trial and the other one on the Cigna Okay.
Victoria trial I'm, just curious have you discussed the trial design with EMA I just wanted to know what if the study is successful would it serve as a basis for approval in Europe as well.
Yes, we discussed that in the second quarter, but we saw specifically to get scientific advice in Europe . They have a formal process.
We received that feedback.
End of May.
And based on that feedback we made the decision.
To add arm.
Which is an arm to study get its illicit plus full restroom and essentially their input or recommendation was for us to essentially have the study for.
<unk> mutated patients mirror. This study for victory see a wild type patients.
Got it and on the <unk>.
Can you sort of expectation of what the fact, one on factory studies need to show you know what I'm thinking of the assay approved.
Sure.
The objective of that study is to demonstrate to show that.
Pathological complete response rate.
With our study treatment.
And the patient population that sell Cigna.
Is.
Identify.
We'll be superior to historical controls and so the target population.
Who are.
Positive HR.
Her two negative HR positive historically have a PCR rate of around 11% standard of care treatment for these early stage patients in the neo adjuvant setting is chemotherapy and so our assumption.
Assumption.
Is that where the hypothesis is that we can demonstrate.
Superiority.
To that historical control.
But is there any kind of a specific metric that the FDA wants to see that you've maybe discussed with the agency or is it just the.
Pathologic complete response as the endpoint.
Got it okay, great. Thanks for taking my questions.
And we'll go next to Gil Blum with Needham and company.
And this is the churn for Gil.
We just wanted to ask when are you planning to start a commercial.
Quick relations.
If the cost of the commercial quicker revisions are included in our cash.
Cash.
Thank you.
The commercial preparations.
Go through an evolution, obviously at this stage.
We are.
Assessing more holistically the the approach that we want to take there are a variety of different options.
Variety of different approaches that could be taken so we began that evaluation.
I think the more intensive expenditures.
<unk> would begin 12 to 18 months prior to expected approval. So we're ways off from that and in the back.
Period of time.
As we get closer to that we would expect to see some of those expenses ramp and.
Some of those expenses are included in the cash flow.
Okay.
Thank you.
As a reminder, if you'd like to ask a question you may signal by pressing star one on your phone now.
We'll take our next question from Alex Nowak with Craig Hallum.
Great. Good afternoon, everyone. This is connor on for Alex I guess first a couple of them sell Cigna, and then one or two on Victoria.
First on sort of Cigna.
Wanted to interim still reading out mid 2023 that all sounds good can you just kind of speak to enrollment trends into those trials as COVID-19 has kind of abated here and then second part of that question just I mean, what about facts fact trials three four and five I mean, where do they stand and what's the potential timelines there.
Sure.
So regarding <unk> one into the enrolment has gotten back on track now Covid seems to have abated or at least health care assistance if adjusted to it.
That's why our guidance remains the same for that interim analysis as far as the other fact studies those are in the metastatic setting those were set up just as Covid was.
Coming.
Coming to four and so those basically you got significantly affected by that as you would imagine and so those would be expected to have potentially interim data.
And later 'twenty three early 'twenty four.
Okay got it.
And then second on Victoria with the first site activated is there anything you can offer us on maybe the cadence of site activation so far into Q4.
And then maybe I guess at what point do you feel comfortable with the sites in U S and Asia to the point, where you can kind of move to Europe , and Latin America and the other geographies.
Sure well all of those are all the activities across the world are occurring simultaneously and.
Different countries have different requirements. So the process varies by country. The timelines will vary by country as well because of differences in some of those requirements and so were proceeding.
Across all the countries for all the sites we have selected.
We expect that process to take.
Multiple months to complete its something that doesn't happen.
Immediately.
I outlined the process thats required where.
Financial operational documentation has to be prepared and approved.
Each site needs to either.
At a central IRB to approve the study or an institutional IRB.
In some cases, particularly hospitals in larger institutions independent ethic committees.
Six committees will need to approve it or scientific committee. So all those factors come in to four and we.
They have identified a timeline for each of our sites.
We have a projection.
Those site activation projections into our enrollment projections.
And so we're on track with what we've initially projected for our site activation and enrollment that will follow.
Okay, Alright fair enough, maybe if I could just squeeze one more in I mean.
With the first patient expected to be dosed by year end and the private placement kind of being based off of that you know the first patient that needs to be dealt with by December 31st maybe just speak to speak to your confidence level. There that you can indeed get a patient dosed by.
<unk> 31.
We're very confident.
We're activating sites.
And that's.
Kind of the plan.
It's really.
Feel very good about that.
Yes, Okay, all right fair enough. Thank you for the questions I appreciate it.
Youre welcome.
Yeah.
And once again, if you would like to ask a question you may signal by pressing star one at this time.
Pause for just a moment to allow everyone an opportunity to signal.
And there are no further questions at this time I'd like to turn the call back to Brian Sullivan for any additional or closing remarks.
Thank you everyone for attending our call. We appreciate your interest and look forward to.
Catching up with you.
Over the next few months Goodbye.
Okay.
And this concludes today's conference call. Thank you for attending.
The host has ended this call.