Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC) Q4 2023 Earnings Call Transcript

Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC) Q4 2023 Earnings Call Transcript March 19, 2024

Cyclacel Pharmaceuticals, Inc. beats earnings expectations. Reported EPS is $-6.23, expectations were $-6.35. CYCC isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).

Operator: Good afternoon and welcome to the Cyclacel Pharmaceuticals Fourth Quarter and Full Year 2023 Earnings Conference Call and Webcast. At this time all participants are in a listen-only mode. After today’s call, members of the financial community will have the opportunity to ask questions. [Operator Instructions] Please note today’s call is being recorded. I’ll now like to turn the conference call over to the company. Please go ahead.

Grace Kim: Good afternoon everyone and thank you for joining today’s conference call to discuss Cyclacel’s financial results and business highlights for the fourth quarter and financial year ended December 31, 2023. Before turning the call over to management, I would like to remind everyone that during this conference call, forward-looking statements made by management are intended to fall within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and Section 21E of the Securities Exchange Act of 1934 as amended. As set forth in our press release, forward-looking statements involve risks and uncertainties that may affect the company’s business and prospects, including those discussed in our filings with the Securities and Exchange Commission, which include, among other things, our forms 10-Q and 10-K.

All of our projections and other forward-looking statements represent our judgment as of today, and Cyclacel does not take any responsibility to update such information. With us today are Spiro Rombotis, President and Chief Executive Officer; Paul McBarron, Executive Vice President, Finance and Chief Operating Officer; and Dr. Brian Schwartz, Chief Medical Officer. Spiro will begin with an overview of our business strategy and progress. Brian will provide details on Cyclacel’s clinical programs. And then Paul will provide financial highlights for the fourth quarter and full year 2023, which will be followed by a Q&A session. At this time, I’d like to turn the call over to Spiro.

Spiro Rombotis: Thank you, Grace, and thank you, everyone, for joining us today for our fourth quarter and full year 2023 business update. We are delighted to be joined on today’s call by Dr. Brian Schwartz, who has recently joined Cyclacel as Chief medical officer. Many of you may know Brian when he was CMO at ArQule prior to the acquisition by Merck in 2020, at which time he joined our Board of Directors. He has extensive clinical and product development experience, which will be instrumental in guiding our team to deliver key value inflection milestones. We are pleased to report on the progress of fadraciclib, our CDK2/9 inhibitor, or fadra for short. Having recently discovered a potential precision medicine approach for fadra, we have determined the recommended Phase 2 dose, or RP2D, and are ready to start the Phase 2 proof-of-concept part of our 065-101 study.

Taken together, our clinical and preclinical data suggest a hypothesis that patients with one or more chromosomal abnormalities, including CDKN2A, CDKN2B, and/or MTAP, including deep deletions or loss of function, may be sensitive to fadra. In this part, we will evaluate patient cohorts selected for their mutation or profile and/or Phase 1 activity in very solid tumors and lymphoma. We will initially focus on two patient cohorts with CDKN2A and/or CDKN2B abnormalities and T-cell lymphoma, for both of which we saw Phase 1 signals of activity including responses. We believe that there is great unmet medical need and industry interest in the cancer patient populations identified by these abnormalities, which are closely located on chromosome 9 and are often co-deleted.

CDKN2A gene deletions occur in several solid tumors, including bladder, breast, endometrial, esophageal, glioma, head and neck, hepatobiliary, lung, including squamous, melanoma, ovarian, pancreatic, and also in certain T-cell lymphomas. CDKN2B deletions occur in several solid tumors, including bladder, breast, cholangiocarcinoma, endometrial, esophageal, glioma, head and neck, hepatobiliary, lung, including squamous and mesothelioma, melanoma, pancreatic, and others. As mentioned in our press release, we expect two key data readouts for fadra this year. Final data from the dose escalation part of the 065-101 study at a major medical conference, and later on, initial clinical activity from the Phase 2 proof-of-concept part. Also, at the upcoming AACR 2024 meeting, independent investigators will present the clinical proof of concept data for fadra in various tumor types.

I will now turn the call over to Brian to review our progress in the fadra and plogo studies and discuss some of our clinical results. Brian?

Brian Schwartz: Thank you, Spiro. We have dosed 47 patients in the dose escalation part of the fadra 065-101 study, of which 33 are invaluable for efficacy. We have completed dose escalation and based on preclinical and clinical data, have determined that dose level 5 or 100 milligrams BID dosed five days per week in a four week cycle will be our recommended Phase 2 dose or RP2D. No dose limiting toxicities have been observed at this dose level. We have also observed CDKN2A or B alterations, including loss of function in multiple pre-treated Phase 1 patients with various cancers, including gynecological, hepatobiliary, lung, and pancreatic who have benefited from fadraciclib monotherapy. These patient groups are associated with a high unmet medical need and often have poor clinical outcomes.

An illustration of this is we were excited to see shrinkage of 22% in the sum of all target lesions of the one cycle of oral fadraciclib in a squamous non-small cell lung cancer patient with CDKN2B deletion refractory to standard of care chemotherapy and immunotherapy. After retrospectively analyzing a subset of previously treated Phase 1 patients who experienced clinical benefit with fadra, we found an additional five patients with CDKN2A or CDKN2B alterations. These included an endometrial cancer patient who achieved a CR and over three years on treatment in a previous study with IV fadra monotherapy and was found to have CDKN2A, CDKN2B, and MTAP loss. We are also encouraged by Phase 1 anti-cancer activity observed in our T-cell lymphoma patients, including PRs in two out of three patients.

A cohort in the Part 2 of the 065-101 will evaluate patients with T-cell lymphoma. Although the Phase 1 hypothesis generating data are limited and cannot be generalized, we believe patients with these cancer types should be evaluated in the Phase 2 proof of concept part of the study. Initially, we expect to enroll 10 to 12 patients in each of the two cohorts with CDKN2A or B alterations and T-cell lymphoma. We estimate that approximately eight sites will take part in the Phase 2 and have completed several site initiation visits, so we can quickly start enrollment and deliver results by the second half of 2024. Let me now make a few remarks on our second program, plogosertib or plogo. In the 140-101 dose escalation study of plogo, we have enrolled 15 patients with good tolerability so far.

Although we observed early evidence of anti-cancer activity in multiple patients, preclinical and clinical data suggest that the optimum dosing may be achieved with an alternative salt formulation of plogo, which has been under development. Additionally, independent groups have shown that certain ARID1A or SMARCA mutated cancers may benefit from treatment of plogo. ARID and other mutations are found in several cancers including bladder, endometrial, esophageal, hepatobiliary, and colorectal. For these reasons, we have chosen to pause 140-101 study with the current formulation and resume dose escalation once a new formulation becomes available. Following assessment of bioavailability in patients, we will now be taking into account potential selection biomarkers for patients enrolling in 140-101 study.

I will now turn the call over to Paul to review the fourth quarter and full year results.

Paul McBarron: Thank you, Brian. As of December 31, 2023, pro-forma cash and cash equivalents totaled $6.3 million, including $2.9 million of United Kingdom research and development tax credits received after the end of the year. Cash and cash equivalents as of December 31, 2023 totaled $3.4 million compared to $18.4 million as of December 31, 2022. Net cash used in operating activities was $16.1 million for the 12 months ended December 31, 2023, compared to $20.8 million for the same period of 2022. The company estimates that its available cash, including the United Kingdom research and development tax credit received of $2.9 million, will fund currently planned programs into the second quarter of 2024. Research and development, or R&D expenses were $3.5 million and $19.2 million for the three months and year ended December 31, 2023, as compared to $6.7 million and $20.3 million for the same period in 2022.

R&D expenses relating to fadra were $2.7 million and $13.4 million for the three months and year ended December 31, 2023, as compared to $5.3 million and $14 million in the same period in 2022, due to a decrease in clinical trial costs, offset by an increase in manufacturing and other non-clinical expenditures. R&D expenses related to plogo were $0.7 million and $5 million for the three months and year ended December 31, 2023, as compared to $1.3 million and $5.5 million for the same period in 2022 due to decrease in manufacturing and other non-clinical expenditures. General and administrative expenses for the three months and year ended December 31, 2023 were $1.9 million and $6.7 million, compared to $2.1 and $7.4 million in the same period of the previous year due to a decrease in professional fees.

Total other income net for the three months and year-ended December 31, 2023 were an expense of $0.3 million and an expense of $0.1 million compared to an expense of $0.2 million and income of $1.7 million for the same period of the previous year. The decrease of $1.8 million for the year ending December 31, 2023 is primarily related to royalty income received in the previous year. United Kingdom research and development tax credits for the three months and year ended December 31, 2023 were $0.4 million and $3 million compared to $1.6 million and $4.7 million for the same period of the previous year and are directly correlated to qualifying research and development expenditure. Net loss for the three months and year ended December 31, 2023 was $5.3 million and $22.6 million, including stock-based compensation expense, or $0.3 and $1.5 million, respectively, compared to $7.4 million and $21.2 million, including, again, stock-based compensation expense of $0.3 million and $1.5 million, respectively, for the same period in 2022.

Operator, we are now ready to take questions.

See also 10 Best Commodity ETFs and 11 Best Dividend ETFs To Buy.

Q&A Session

Operator: [Operator Instructions] Our first question comes from Ahu Demir with Ladenburg Thalmann.

Ahu Demir: Good afternoon. Thanks for taking my questions. And, Brian, welcome back. Great to see you back on the operational seats. I have two questions. First one is on the fadra program. You have two major data readouts. You mentioned for the Phase 1 portion of the data readout, are you going to disclose any of the PD biomarker data, including CDKN2A and B or others? That’s my first question.

Spiro Rombotis: Okay. Thank you very much for your question. Our only answer is yes. We intend to disclose [indiscernible] data in the mid-medical meeting. As we have heard in the remarks and the press release, we have six patients that have the specific genotype. We are very encouraged that these are the best patients for our response. So, that’s clearly a hypothesis generating dataset, and we’ll look to share more with our investors when the conference comes.

Ahu Demir: Understood. My second question is on the plogo formulation. As the clinical studies are currently not ongoing, when do you think the formulation efforts will be completed and when do you think you will resume the clinical efforts and also then are we going to see the data, clinical data from the program?

Spiro Rombotis: We’ll ask Paul who’s in charge of manufacturing effort to comment on the first question. I will discuss the second one. Paul, over to you.

Paul McBarron: Yeah, we intend — the formulation, the new oral formulation of plogosertib is ongoing. We’ve been doing it for a short while. So we’d anticipate about six months to complete that process.

Spiro Rombotis: As far as the clinical data, with second part of the question, I’ve drawn all 15 patients seeing clinical [Technical Difficulty] in five of those patients. But we need to be sure we can get to targeting even levels. If we have the backup formulation on the alternative salt, which gave us much higher exposures, we obviously need to go with that. That’s the reason we just had to pause the program in favor of improving our [pharmacokinetics] (ph).

Ahu Demir: Thank you.

Operator: Thank you. Our next question comes from Kemp Dolliver with Brookline Capital Markets.

Kemp Dolliver: Great. Thank you. So the press release and your transcript refers to the cash runway going into second quarter, which as you know, is a short period of time away. So two questions related to that. How far into second quarter can you continue operating and then which milestones can you achieve between now and then?

Spiro Rombotis: Thank you, Kim. We can go into April 2024 as we said. One can imagine that this process is not the end way as far as raising additional funds as well as considering other options for the strategic funds. As far as most of the concern, we expect to begin our work on our Phase 2 program that appears to be lined up [Technical Difficulty]. As I recently declared, RP2D, which can be [indiscernible] phase 2, the question of when we see the abstracts from the major medical meeting in the middle of the year was historically come out a month before, so we start to see those around the same timeframe. This will contain the Phase 1 data — the full Phase 1 data, including some detail on pharmacodynamic profiles of patients. That’s not all of them because the cutoff was in winter. We expect to have some of that in the public domain within this timeframe.

Kemp Dolliver: Great. Thank you.

Spiro Rombotis: Thank you, Kemp.

Operator: We have no further questions at this time. I would now like to turn the call back over to the company for any additional or closing remarks.

Spiro Rombotis: Thanks, operator, and thanks to all of you for joining Cyclacel’s fourth quarter and full year 2023 earnings call. Cyclacel has achieved a key milestone in ready to start Phase 2 on the concept stage with important capitalists anticipated in 2024 and a strong competitive profile in its therapeutic class. As a reminder, our upcoming key milestones are, first patient dosed with oral fadraciclib in Phase 2 proof-of-concept part of 065-101 study in patients with advanced solid tumors and lymphoma, report final data from dose escalation stage from the 065-101 study of oral fadraciclib in patients with advanced solid tumors and lymphoma, report interim data from initial cohorts in Phase 2 open label, proof-of-concept part of 065-101 study with oral fadraciclib in patients with advanced solid tumors and lymphoma, and independent investigators to report preclinical proof-of-concept data for fadraciclib at the American Association for Cancer Research or AACR Annual Meeting 2024.

We look forward to providing you with further updates and hopefully meet some of you at the conferences. Operator, at this time, you may end the call.

Operator: Thank you, sir. This does conclude today’s program. Thank you for your participation. You may disconnect at any time.