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Edited Transcript of CYCC earnings conference call or presentation 13-Nov-19 9:30pm GMT

Q3 2019 Cyclacel Pharmaceuticals Inc Earnings Call

Berkeley Heights Dec 4, 2019 (Thomson StreetEvents) -- Edited Transcript of Cyclacel Pharmaceuticals Inc earnings conference call or presentation Wednesday, November 13, 2019 at 9:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Judy H. Chiao

Cyclacel Pharmaceuticals, Inc. - VP of Clinical Development & Regulatory Affairs

* Paul McBarron

Cyclacel Pharmaceuticals, Inc. - Executive VP of Finance, CFO, COO, Secretary & Executive Director

* Spiro George Rombotis

Cyclacel Pharmaceuticals, Inc. - President, CEO & Executive Director

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Conference Call Participants

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* Wangzhi Li

Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research of Biotechnology

* Jan Medina;Russo Partners LLC

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Presentation

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Operator [1]

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Good afternoon. And welcome to the Cyclacel Pharmaceuticals Third Quarter 2019 Results Conference Call and Webcast. (Operator Instructions) The company will also be accepting a limited number of questions submitted via e-mail to the address ir@cyclacel.com. (Operator Instructions) Please note, today's call is being recorded.

I will now turn the conference call over to the company.

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Jan Medina;Russo Partners LLC, [2]

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Good afternoon, everyone, and thank you for joining today's conference call to discuss Cyclacel's financial results and business highlights for the third quarter of 2019. 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 SEC, which include, among other things, our Forms 10-Q and 10-K. These filings are available from the SEC or our website. 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. Judy Chiao, Vice President of Clinical Development and Regulatory Affairs. Spiro will begin with an overview of our business strategy and accomplishments on Cyclacel's multiple clinical programs, and Paul will provide financial highlights for the third quarter of 2019, which will be followed by a Q&A session.

At this time, I would like to turn the call over to Spiro.

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Spiro George Rombotis, Cyclacel Pharmaceuticals, Inc. - President, CEO & Executive Director [3]

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Thank you, Jan, and thank you, everyone, for joining us today for our third quarter business update call. Our vision at Cyclacel is to translate our understanding of cell cycle control biology into medicines that will improve the life of cancer patients. We approach this by exploiting transcriptional regulation and DNA damage response pathways to discover novel drugs that overcome cancer resistance to treatment. Our business strategy is to develop a pipeline of innovative medicines and realize stockholder value by demonstrating their safety, efficacy and cost effectiveness.

Cyclacel's work in cancer drug discovery started with our founding scientist, Professor Sir David Lane, a global authority in cell cycle biology, who discovered p53, a key tumor suppressor gene that malfunctions in about 2/3 of people with cancer. Under his guidance, our drug discovery programs concentrated principally on cyclin-dependent kinase inhibitors and, in particular, CDK 2/9 isoforms, which operate as key components of the p53 pathway. These efforts resulted in advancing our transcriptional regulation program into the clinic with our lead drug, CYC065 and novel CDK 2/9 inhibitor.

CYC065 works by suppressing Mcl-1, a prosurvival protein member of the Bcl-2 family. Bcl-2 proteins help cancer cells survive the cancer therapy, gain an advantage of a normal cells and ultimately confer resistance to cancer treatments. The Mcl-1 suppression strategy has attracted a lot of attention in the scientific and pharmaceutical communities, and a competitive race is ongoing to bring to market drugs that suppress Mcl-1.

Several human cancers, including certain gynecological and lung cancers and certain leukemias, are characterized by Mcl-1 overexpression or amplification. Designing protocols to exploit these findings in Mcl-1-high patients is a potentially important therapeutic strategy. We believe that Cyclacel is a leader in this race as CYC065 has demonstrated durable suppression of Mcl-1 as monotherapy at tolerable doses in patients with solid tumors.

These previously reported Mcl-1 results were observed in the majority of patients enrolled at the recommended Phase II dose of 192 milligrams per meter square in Part 1 of our 065-01 Phase I study, in which CYC065 was given as a single 4-hour intravenous administration every 3 weeks. We have since been enrolling patients in Part 2, in which CYC065 is given as 4 1-hour intravenous administrations for the first 2 days over the first 2 weeks out of a 3-week cycle. Dose escalation has reached the fourth level at 213 milligrams flat dose.

We are excited to report that a patient with previously treated endometrial cancer and Mcl-1 amplification has achieved a partial response or PR by investigator assessment based on tumor shrinkage of 48%. The PR was achieved after 4 cycles of CYC065 at 213 milligrams. After the first 2 cycles, the patient achieved stable disease with tumor shrinkage of 16%. A second patient with ovarian cancer and cyclin E amplification treated with 2 cycles of CYC065 at 213 milligrams also achieved stable disease with tumor shrinkage of 19% for investigator assessment. Subject to confirmation by follow-up scans, this finding suggests that a frequent dosing schedule of CYC065 may be a preferred strategy to suppress short-lived transcripts such as Mcl-1.

In parallel, with the intravenously administered Parts 1 and 2, we have begun Part 3 of the study with an oral formulation of CYC065 and treated the first patient at 75 milligrams flat dose. Based on the clinical data and pharmacokinetic data from this first patient, we expect good oral bioavailability. We plan to report next year initial safety and PK data for the oral form and updated safety, efficacy and mechanistic data for the IV dosage form.

Let us now turn to CYC065 studies in patients with hematological malignancies. The clinical data have demonstrated great potential for combination strategies suppressing both Mcl-1 and Bcl-2. In particular, the clinical data by Cyclacel scientists and external scientists have demonstrated synergy of CYC065 in combination with venetoclax. Venetoclax, the first approved Bcl-2 inhibitor, is an important therapeutic advance approved for first- or second-line CLL, either alone or with an anti-CD20 antibody.

More recently, FDA granted accelerated approval for venetoclax in first-line AML unfit for chemotherapy in combination with a hypomethylating agent or a NUPLAZID analog. Venetoclax-treated patients eventually stop responding and this is often correlated with Mcl-1 amplification. We have, therefore, opened 2 dose escalation clinical studies to test the hypothesis that suppressing both Mcl-1 and Bcl-2 can result in antitumor activity against relapsed or refractory leukemias. We are specifically evaluating the combination of CYC065 and venetoclax in patients with relapsed or refractory CLL in the 065-02 study and in patients with relapsed or refractory AML or MDS in the CYC065-03 study.

In the 065-02 study, enrollment has been slow, with 2 patients with relapsed or refractory CLL treated so far. Both have failed ibrutinib therapy and received treatment for 4 and 6 cycles, respectively, with a combination of CYC065 and venetoclax, which were well tolerated.

In CLL, leukemia cells in the lymph nodes stop responding to venetoclax and cause events or relapse. Eradicating lymph node disease by a combination of CYC065 and venetoclax is, therefore, an attractive strategy toward achieving a cure for CLL. Lymph node assessment by radiographic imaging may provide important clues on the value of the combination. Both CLL patients had shrinkage of enlarged lymph nodes by CT scan on the combination of the venetoclax and CYC065 dosed once every 2 weeks at 64 milligrams per meter square.

According to the investigators, the reason for slow enrollment in 065-02 is that CLL patients are doing very well on front line regimens without relapse. They advised that Cyclacel should persist with this study as eventually patients will relapse and a large unmet medical need will arise. In view of these facts, our strategy has been to open additional CLL sites and implement certain protocol amendments to increase enrollments. Two new U.S. sites have been opened, and others are in discussions.

Meanwhile, we are exploring the possibility to increase the magnitude of dose escalation based on safety information from our AML study 065-03, which has been enrolling better. Despite recent developments in AML, including venetoclax approval, an unmet medical need remains in both relapsed/refractory AML and MDS. We have now treated 8 patients in 065-03 and have escalated to 150 milligrams a meter square of CYC065 dosed once every 2 weeks in combination with venetoclax.

Unlike CLL, where Bcl-2 overexpression is the main feature in AML, Mcl-1 plays a dominant role. The rationale for this study is supported by preclinical evidence confirming synergy of CYC065 and venetoclax in inducing apoptosis, suggesting that double-hit suppression of both Mcl-1 and Bcl-2, respectively, may be more beneficial than suppressing either protein alone. We are encouraged by investigator reports of decreasing blasts in the first peripheral blast of patients treated with CYC065 in combination with venetoclax. We anticipate reaching the MTD from this study in 2020.

In our second program, we are enrolling patients with relapsed or refractory AML or MDS in Part 2 of the Phase I/II study, 682-11, evaluating the safety and effectiveness of an oral combination of sapacitabine or nucleoside analog with venetoclax. Preclinical data published at the 14th European Hematology Association Congress supports the combination of sapacitabine and Bcl-2 inhibitors in AML. Based on prior clinical investigations, sapacitabine is active and induces complete remissions in AML and MDS that is relapsed or refractory to prior therapy such as cytarabine or hypomethylating agents.

Venetoclax has accelerated approval as frontline therapy in AML in combination with hypomethylating agents or cytarabine, both of which are intravenously administered. Combining sapacitabine with venetoclax may, therefore, offer an effective oral treatment regimen for patients who have failed frontline therapy or venetoclax is already approved.

In our third clinical program, we're evaluating CYC140, a polo-like kinase or PLK 1 inhibitor, which, like CYC065, was discovered in-house. Three patients with advanced leukemias have been recruited to 140-01, our first-in-human, single-agent, dose-escalation study. No dose-limiting toxicities have been observed thus far. CYC140 is a small molecule, selective PLK 1 inhibitor that has demonstrated potent and selective target inhibition and high activity in xenograft models of human cancers.

All 4 studies, CYC065-02, 065-03, 682-11 and 140-01 are parts of our strategic alliance with MD Anderson Cancer Center with the objective of evaluating 3 Cyclacel candidates in patients with hematological malignancies. Under the terms of the alliance, MD Anderson assumes patient costs for up to 170 patients over 3 years in exchange for milestone payments upon first commercial sale for indications studied in the alliance. Cyclacel remains the sponsor for all of these studies.

Let us now turn to our DNA damage response strategy. Our goal here is to enhance the efficacy of standard of care by targeting inherited mutations in DNA damage pathways such as homologous recombination or HR-deficient cancers, which include those with BRCA mutations. The modest duration of clinical benefit to PARP inhibitors, the standard of care approved for certain genealogical cancers, including those with BRCA mutations, suggests a need for novel drugs to be used in combination to improve disease control and extend survival.

Sapacitabine works by an HR-deficient relevant mechanism that is distinct from the mechanism of action of PARP inhibitors. Sapacitabine has demonstrated durable activity in BRCA-positive breast cancer, including a patient still in remission after more than 6 years. Recent clinical data with sapacitabine reported at the 2019 AACR provides the rationale for an ongoing investigator-sponsored trial or IST, of orally dosed sapacitabine and olaparib, the leading PARP inhibitor approved for breast and ovarian cancer.

This IST is sponsored by the department of breast cancer at the Dana-Farber Cancer Institute and is enrolling PARP inhibitor naïve patients with BRCA-mutant breast cancer. Cyclacel and AstraZeneca are supplying sapacitabine and olaparib, respectively. According to the investigators, a total of 5 patients with BRCA-mutant breast cancer have been treated, and 1 patient has achieved a partial response or PR. Three patients are continuing on treatment.

We are proud of the company's achievement in 2019, especially as we have established a leadership position in Mcl-1 suppression with CYC065. We will provide further highlights of our progress at the upcoming ASH conference with 2 presentations for our lead program CYC065 in AML, MDS and CLL and 1 for our sapacitabine 682-11 study.

As we continue executing our strategy and advancing our clinical development programs, our key milestones for the next 12 months include reporting on updated safety, PK and efficacy of CYC065 Phase I data with frequent dosing schedule in patients with advanced solid cancer; initial safety and PK data from the Phase I study of an oral formulation of CYC065; initial safety and efficacy data from the CYC065-venetoclax Phase I study in relapsed or refractory AML and MDS; and the CYC065-venetoclax Phase I study in relapsed or refractory CLL; and the sapacitabine-venetoclax Phase I/II study in patients with relapsed or refractory AML or MDS; and the CYC140 Phase I first-in-human study in relapsed or refractory leukemias.

Also, updated data from the IST Phase Ib/II trial of sapacitabine-olaparib combination in patients with BRCA-mutant metastatic breast cancer when reported by the investigators and determining a regulatory pathway and submissibility of sapacitabine in elderly AML patients.

With capital on hand estimated until the end of 2020, we have the resources to take us through key clinical milestones in our ongoing clinical studies.

I would now like to turn the call over to Paul to review our third quarter 2019 financials. Paul?

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Paul McBarron, Cyclacel Pharmaceuticals, Inc. - Executive VP of Finance, CFO, COO, Secretary & Executive Director [4]

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Thank you, Spiro. As outlined in today's press release, for the quarter ended September 30, 2019, our cash and cash equivalents totaled $13 million compared to $17.5 million as of December 31, 2018. The decrease of $4.5 million was primarily due to net cash used in operating activities of $8.3 million, offset by net proceeds from our common stock sales agreement with H.C. Wainwright of $4.1 million.

Research and development expenses were $1.1 million for the 3 months ended September 30, 2019, compared to $1.2 million for the same period in 2018. General and administrative expenses were $1.3 million for each of the 3 months ended September 30, 2019, and '18. Other income net for the 3 months ended September 30, 2019, was $0.2 million compared to $0.1 million for the same period of the previous year.

The United Kingdom R&D tax credit was $0.3 million for each of the 3 months ended September 30, 2019, and 2018.

Net loss for the 3 months ended September 30, 2019, was $1.9 million compared to $2.1 million for the same period in 2018. With the projected cash-sparing benefits accruing from the MD Anderson alliance, the company believes that cash and marketable securities, which were approximately $13 million as of September 30, 2019, will be sufficient to finance operations through the end of 2020.

Operator, we are now ready to take your questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And your first question comes from Wangzhi Li with Ladenburg.

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Wangzhi Li, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research of Biotechnology [2]

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Congrats on the progress over the quarter. Maybe I missed it, but for the ASH presentation, the abstract is only in the trial kind of design and -- but you mentioned you're going to present the data. So maybe any further color on how many patient data you're going to present and what kind of data are you going to present at ASH presentations?

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Spiro George Rombotis, Cyclacel Pharmaceuticals, Inc. - President, CEO & Executive Director [3]

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These are questions for Judy, I think. Judy?

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Judy H. Chiao, Cyclacel Pharmaceuticals, Inc. - VP of Clinical Development & Regulatory Affairs [4]

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Well, we're trying to get a preliminary read on the patients who have been treated. As you know that the CLL trial we have 2 patients, and for the AML 065-03 studies, we actually -- being enrolling very well. We have about 8 patients. So it's a little tight because they all came behind us the past couple of months. So we're trying to get data and, hopefully, to share some of the preliminary safety and clinical efficacy.

And the same comments apply to 682-11 and we have enrolled (inaudible)

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Wangzhi Li, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research of Biotechnology [5]

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Okay. So for the AML trial, how about the dose level? I mean you only had 8 patients at a dose level. What -- which dose level you expect to sort of see efficacy or activity?

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Judy H. Chiao, Cyclacel Pharmaceuticals, Inc. - VP of Clinical Development & Regulatory Affairs [6]

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Well, that's a very good question. And I think that based on the solid tumor study and 4-hour infusion infusions, we know that we have been able to durably suppress Mcl-1 at the recommended Phase II dose of 192 milligram per meter square. So in the AML studies, we have just opened the 150 milligram per meter square for enrollment. So we're hoping to hit 192 pretty soon.

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Wangzhi Li, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research of Biotechnology [7]

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Okay. Got it. Last question, for PLK 1 inhibitor, can you provide any additional color on the enrollments? I think you mentioned, like, 2 patients enrolled. It seems a little bit low to me, but maybe I don't know the full details.

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Judy H. Chiao, Cyclacel Pharmaceuticals, Inc. - VP of Clinical Development & Regulatory Affairs [8]

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Well, it's enrolling, not as fast as the 065-03. I think that we have a total of 3 patients at this point.

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Wangzhi Li, Ladenburg Thalmann & Co. Inc., Research Division - MD of Equity Research of Biotechnology [9]

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3 patients. Okay.

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Operator [10]

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And there are no further questions at this time. I will turn the call back over to Mr. Spiro.

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Spiro George Rombotis, Cyclacel Pharmaceuticals, Inc. - President, CEO & Executive Director [11]

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Thank you, operator, and thank you all for your participation in Cyclacel's third quarter 2019 earnings call and your ongoing support of our efforts to develop medicines to address cancer resistance and improve existing treatment options. We look forward to updating you on our progress and meeting some of you at upcoming conferences. Operator, at this time, please end the call.

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Operator [12]

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Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.