Celcuity Inc. (NASDAQ:CELC) Q1 2023 Earnings Call Transcript May 15, 2023
Celcuity Inc. misses on earnings expectations. Reported EPS is $-0.55 EPS, expectations were $-0.52.
Operator: Greetings and welcome to Celcuity First Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Robert Uhl with ICR Westwicke. Please go ahead.
Robert Uhl: Thank you, operator and good afternoon to everyone on the call. Thank you for joining us to review Celcuity’s first quarter 2023 financial results and business update. Earlier today, Celcuity released financial results for the first quarter ending March 31st, 2023. The press release can be found on the Investors section of the website. Joining me on the call today are Brian Sullivan, Celcuity’s Chief Executive Officer and Co-Founder; Vicky Hahne, Chief Financial Officer; as well as Igor Gorbatchevsky, 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 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 would now like to turn the call over to Brian Sullivan, CEO of Celcuity. Please go ahead sir.
Brian Sullivan: Thank you, Robert and good afternoon everyone. Since we provided a corporate update just seven weeks ago during our full year 2022 financial call, I’ll only make brief prepared remarks today. I’m very pleased with the execution to date of our VIKTORIA-1 Phase 3 clinical trial enrollment activities at our trial sites. As we’ve reported previously, VIKTORIA-1 is evaluating gedatolisib in combination with fulvestrant with and without palbociclib, in adults with HR+/HER2- advanced breast cancer, whose disease progressed while receiving a CDK4/6 inhibitor. Our team is relentlessly focused in keeping us on track to report the primary analysis for the PIK3CA non-mutated patient subgroup in the second half of 2024 and the primary analysis for the PIK3CA-mutated patient subgroup in the first half of 2025.
This is consistent with our prior guidance. At the ESMO Breast Cancer Congress last week, we presented an updated median progression-free survival data for treatment-naive HR positive HER2 advanced breast cancer patients. We think the data is very encouraging. In our poster presentation, we provided updated efficacy and safety data in treatment-naive patients who are enrolled in escalation arm A and expansion arm A of our Phase 1b study. We have previously reported data for this group of patients at the San Antonio Breast Cancer Symposium last cutoff date of June 29th, 2022, but the median PFS and expansion RNA has not yet been reached. As of the March 16th, 2023 data cutoff date, with the benefit of the additional follow-up period, we were able to report final median progression-free survival and median duration of response data for these patients.
For treatment-naive patients and escalation arm A, median progression-free survival was 45.8 months and for patients and expansion RNA, it was 48.6 months. When the results for treatment-naive patients from each of these arms are analyzed together, median progression-free survival was 48.6 months and median duration of response was 46.9 months. These results compare very favorably to the median PFS of 24.5 months reported in the PALOMA-3 study for palbociclib letrozole. We think these results demonstrate the intrinsic role the PI3K/mTOR pathway plays as a disease driver in advanced HR positive HER2-negative breast cancer. This data also highlight the potential opportunity to develop gedatolisib as a first-line treatment option. We continue to characterize gedatolisib activity in various tumor types and compare its activity to other drugs in the class.
As we previously reported, the non-clinical studies we presented at ASCO GU in February for prostate cancer, and at AACR in April for gynecological cancers, highlighted gedatolisib’s differentiation from other drugs in this class. In each of the studies we performed and all of the tumor types assessed, gedatolisib demonstrates superior therapeutic effect relative to the other PI3K, AKT, and mTOR inhibitors evaluated. Based on the results from these internal non-clinical studies, as well as published reports of prior clinical results with drugs in this class, we think there is a significant opportunity for us to develop gedatolisib in these tumor types. We’ll provide an update on our clinical development priorities later this year. And finally, the FACT-1 and FACT-2 trials are continuing to enroll patients with early-stage HR positive HER2-negative breast cancer.
These HER2 pathway is hyperactive as detected with our CELsignia test. We now expect to announce interim results from these studies in the first half of 2024. And with that, I’ll now turn the call over to Vicky Hahne to review our financial results.
Vicky Hahne: Thank you, Brian and good afternoon everyone. I’ll provide a brief overview of our first quarter 2023 financial results. The first quarter net loss was $11.9 million or $0.55 loss per share compared to a net loss of $7.9 million or $0.53 loss per share for the first quarter of 2022. Because these quarterly net losses include significant non-cash items, including stock-based compensation and interest expense, we also include in our press release non-GAAP adjusted net loss for the quarter ending March 31st, 2023. Our non-GAAP adjusted net loss for the first quarter of 2023 was $10.2 million or $0.47 loss per share compared to non-GAAP adjusted net loss for the first quarter of 2022 of $7 million or $0.47 loss per share.
Research and development expenses were $11.3 million for the first quarter of 2023 compared to $6.7 million for the first quarter of 2022. The approximately $4.6 million increase resulted primarily from cost supporting activities related to the VIKTORIA-1 pivotal trial. General and administrative expenses were $1.3 million for the first quarter of 2023, compared to $0.8 million for the first quarter of 2022. The approximately $0.5 million increase was a result of non-cash, stock-based compensation and professional fees associated with being a public company. Net cash used in operating activities for the first quarter of 2023 was $12.9 million compared to $5.9 million for the first quarter of 2022. This was a result of non-GAAP adjusted net loss of $10.2 million, working capital changes of approximately $1 million, and non-cash interest income of approximately $1.7 million.
We ended the quarter with approximately $157.5 million of cash, cash equivalents and short-term investments compared to $168.6 million at December 31st, 2022. With that, I will now hand the call back to Brian.
Brian Sullivan: Thank you, Vicky. Operator, could you please open the call for questions?
Q&A Session
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Operator: Sure. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question comes from Maury Raycroft with Jefferies. Please go ahead.
Operator: Next question comes from Boris Peaker with Cowen & Company. Please go ahead.
Operator: Next question comes from Rohit Bhasin with Needham & Company. Please go ahead.
Operator: Next question comes from Alex Nowak with Craig-Hallum Capital Group. Please go ahead.
Operator: There are no further questions at this time. I would like to turn the floor back over to Brian Sullivan for closing comments.
Brian Sullivan: Thank you, everyone for participating in the call today and for your ongoing support. We look forward to seeing you at the Craig-Hallum conference at the end of this month or at the Jefferies Healthcare Conference in June. I hope everyone has a great evening. Good bye.
Operator: This concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.
