Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC) Q1 2023 Earnings Call Transcript
Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC) Q1 2023 Earnings Call Transcript May 11, 2023
Cyclacel Pharmaceuticals, Inc. beats earnings expectations. Reported EPS is $-0.47, expectations were $-0.66.
Operator: Good afternoon, and welcome to the Cyclacel Pharmaceuticals First Quarter 2023 Results 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. [Operator Instructions] I would now like to turn the conference call over to the company.
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 first quarter of 2023. Before turning the call over to management, I'd 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 Form 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. Mark Kirschbaum, Senior Vice President and Chief Medical Officer. Spiro will begin with an overview of our business strategy and progress. Mark will provide details on Cyclacel's clinical programs, and Paul will provide financial highlights for the first quarter of 2023, which will be followed by a Q&A session. At this time, it's my pleasure to turn the call over to Spiro.
Photo by National Cancer Institute on Unsplash
Spiro Rombotis: Thank you, Grace, and thank you, everyone, for joining us today for our quarterly business update. We are on track to deliver key data readouts over the coming months from our 2 clinical programs. In the fadra 065-101 study in patients with solid tumors and lymphoma, we are enrolling at dose level 6A. Pharmacokinetic and pharmacodynamic data from this dose level suggests that we are achieving predicted target engagement levels on continuous dosing at the higher level. Choosing the optimal dose schedule is one of many parameters to increase the chance of success in Phase II. Among others, [corrective] analysis and translational data can confirm whether the observed drug effects are on mechanism together with learning on how to deal with toxicities observed in early development.
At this point in the program, we feel encouraged that our clinical observations support fadra's presumed mechanism of action. The Phase II proof-of-concept or POC stage will consist of multiple cohorts defined by histology. We expect that cohorts may enroll at different rates. For example, it is possible that the fastest ones will be those in which we have already seen anticancer activity during the dose escalation stage. As previously reported, we have seen PRs and stable disease in patients with T-cell lymphoma, women's cancers, including cervical, endometrial and ovarian and pancreatic cancer, all on fadra monotherapy. Clinical data from this open-label POC stage will be reported as they become available. When biotech companies enter negotiations for out-licensing assets or a strategic exit, preparing the commercial drug product or DP, is often kicked down the road to be dealt with by the next owner of the asset.
Such neglection can have a profoundly negative impact on valuation as the time lines to launch become apparent to the licensee or purchaser. Mindful of these matters, the Cyclacel team has been proactively investing in a tablet formulation of fadra to replace the capsule currently used in clinical trials. A tablet DP has further advantages to capsules in terms of patient convenience and increased compliance. As a tablet, DP of fadra has recently become available, we will treat a few patients with it within the Phase I part of our ongoing 065-101 study. We will provide further updates on this project as they emerge. Let us now turn to plogo. In our 140-101 study, we are evaluating plogo in dose escalation stage as a treatment for patients with advanced solid tumors and lymphoma.
We are currently dosing patients at dose level 4. Plogo has previously shown early signals of anticancer activity at low dose levels in patients with biliary tract, non-small cell lung and ovarian cancer. Our preclinical program, aiming to elucidate plogo's differentiated biological profile has revealed that alongside the inhibition of PLK1, plogo has also demonstrated an epigenetic mechanism of action. This property may lead to a biomarker-driven clinical study in the future. Over the coming months, we expect key data readouts from the Phase I/II studies for fadra and plogo. We expect to report complete dose escalation data with fadra, followed by initial data from the fadra Phase II POC stage, which is expected in the second half of 2023.
Dose escalation in the plogo study continues, and we expect to report initial data in mid-to-late 2023. We believe that our medicines are differentiated from other molecules in their respective class with properties, which may be best-in-class. I will now turn the call over to Dr. Mark Kirschbaum, our Chief Medical Officer, to provide details on recent clinical data. Mark?
Mark Kirschbaum: Thank you, Spiro. As you heard, both the fadraciclib and plogosertib clinical programs are progressing well and are at important stages in their respective studies. Regarding fadra, we are currently treating patients at dose level 6A, which is the final dose level as outlined in the 065-101 protocol. In preparation for the upcoming start of Phase II, we are now introducing the tablet form under this dose level. Previously recorded anticancer activity in the ongoing Phase I study should result in faster enrollment in certain tumor types. As we have reported, 2 out of 3 patients with T-cell lymphoma achieve PR, including a patient with a very aggressive angioimmunoblastic form of peripheral T-cell lymphoma. 11 of 15 patients with cervical endometrial liver and ovarian cancers achieved stable disease with target lesion reductions as their best response.
A pancreatic patient maintains stable disease for 5 cycles of treatment. Seeing promising responses for this phase of clinical testing and may predict deeper responses in Phase II. Speaking of the Phase II stage of 065-101, most of our additional sites, including top sites in the U.S., Europe and Asia are now open. Together with our 4 Phase I sites, around 10 centers are ready to participate in the proof-of-concept stage in what will be a global study. The primary objective of the upcoming Phase II stage is to assess fadra's activity and safety in relevant tumor types. The design of this registration-directed study allows us to recruit different tumor types and discrete cohorts each running in parallel and independent of each other. Let's now turn to our second program with plogosertib, our oral PLK1 inhibitor, currently in 140-101, a Phase I/II study in patients with advanced solid tumors and lymphoma.
Published preclinical events suggest that low dose continuous administration may be an effective strategy for PLK1 inhibitors as well as the standard high-dose pulse-type strategy. In 140-101, we have observed intriguing clinical activity at the lowest dose of plogo given continuously. These included stable disease at dose Level 1 in 2 patients. 1 with non-small cell lung cancer for 8 cycles and 1 with ovarian cancer for 5 cycles, respectively, and the dose level 2 in a patient with biliary tract cancer for 3 cycles. We are currently enrolling in dose level 4 and have seen no SAEs thus far. We are conducting a comprehensive preclinical program to elucidate this novel mechanism of action of plogo and expect to report additional preclinical data later this year.
What we can say at its point is that plogo is an active BRD4 inhibitor and there appears to be a broader epigenetic story. 140-101 is designed to target several important tumor types where preclinical models and biology suggest single-agent activity, including colon cancer, lymphoma and small cell lung cancer, among others. Our study is designed to efficiently evaluate both dose and schedule to optimize RP2D for the proof-of-concept or cohort stage of the study. We look forward to updating you as we progress our evaluation of fadra and plogo. I will now turn the call over to Paul to review our first quarter and financial results.
Paul McBarron: Thank you, Mark. Last week, we announced receipt of GBP 3.9 million or $4.7 million as a research and development or R&D tax credit from HMRC, the tax agency of the United Kingdom. The tax credit is for R&D costs incurred during the year ended December 31, 2022, and is the amount disclosed on the income tax benefit line of the statement of operations. For the first quarter of 2023, the R&D credit is estimated at approximately $1.3 million. This R&D tax credit is an important source of non-dilutive capital, and we anticipate receiving the 2023 tax credit in early 2024. Pro forma cash and cash equivalents totaled $16.1 million, comprised of the R&D tax credit of $4.7 million and cash and cash equivalents as of March 31, 2023, of $11.4 million.
Cash and cash equivalents as of December 31, 2022, was $18.3 million. Net cash used in operating activities was $6.9 million for the 3 months ended March 31, 2023, compared to $6.8 million for the same period of 2022. The company estimates that its available cash will fund currently planned programs into the first quarter of 2024. R&D expenses were $5.7 million for the 3 months ended March 31, 2023 as compared to $5 million for the same period in 2022. R&D expenses relating to fadraciclib were $4.1 million for the 3 months ended March 31, 2023, as compared to $3.6 million for the same period in 2022 due to increased nonclinical expenditures. R&D expenses related to plogo were $1.4 million for the 3 months ended March 31, 2023, as compared to $1.1 million for the same period in 2022 due to clinical trial costs associated with the progression of the Phase I/II study.
General and administrative expenses for the 3 months ended March 31, 2023 and '22 remained relatively flat at $1.6 million. Total other income, net, for the 3 months ended March 31, 2023, was $0.2 million compared to an income of $1.3 million for the same period of the previous year. The decrease of $1.1 million for the 3 months ended March 31, 2023, is primarily related to royalty income received in the prior year. Net loss for the 3 months ended March 31, 2023, was $5.8 million, compared to $4.1 million for the same period in 2022. Operator, we are now ready to take questions.
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