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Operator
And welcome to the Selcuity 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 Uhl, with ICR Westwick. Mr. Uhl, you may begin.
Robert Uhl
Thank you, operator. Good afternoon, everyone, and welcome to Selcuity's third quarter 2022 financial results and business update webcast and conference call. Earlier today, Salcuity Incorporated released financial results for the third quarter, ending September 30, 2022. The press release can be found on the Investors section of the website. Joining me on the call today are Brian Sullivan, Salcuity's Chief Executive Officer and Co-Founder, Vicki Hahn, Chief Financial Officer, as well as Igor Gorbachevsky, 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'd like to turn the call over to Brian Sullivan, CEO of Selcuity.
Brian Sullivan
Thank you, Robert. Good afternoon, everyone, and thank you for joining us today. I'm pleased to report that we made significant progress in the third quarter advancing Victoria I. our phase three clinical trial. Victoria One is evaluating the safety and efficacy of our lead drug product candidate, Geta-Tolicid, an investigational pan PI3K mTOR inhibitor for the treatment of HR-positive HER2-negative advanced breast cancer that has progressed after treatment with a CDK4-6 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. We achieved this objective and selected approximately 200 clinical trial 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 in participating in this 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 QUT is now working closely with our selected sites to assure completion of regulatory and operational activities at each site as planned. Our 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 dose by the end of the year. And we continue to expect data for the PIK3CA non-mutated patients to be available in the second half of 2024, and data for the PIK3CA mutated patients 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 a thalysm for the treatment of HR-positive HER2-negative advanced breast cancer. This designation allows for more intensive guidance from the FDA and a potentially accelerated review time if relevant criteria are met. Gettys-Elissa previously received fast-track designation from the FDA in January 2022. We estimate that this initial potential target patient population represents over 100,000 breast cancer patients globally on an annual basis. Current standard of care for these patients includes endocrine therapies such as fulvestrin, and regimens that combine fulvestrin with an mTOR-specific or PS3K-alpha-specific targeted therapy. These therapies offer only modest progression-free survival periods, and in the case of the approved PS3K-alpha inhibitor, a very challenging safety profile. Also during the quarter, an abstract with updates to results from a Phase Ib advanced breast cancer study was accepted for a spotlight poster discussion presentation at the 2022 San Antonio Breast Cancer Symposium in December. Preliminary data from this study was presented last year at a spotlight post of 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%, and the median progression-free survival period was 12.9 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 3 or grade 4 hyperglycemia, and no patients discontinued treatment due to hyperglycemia. Now I'd like to move on to the diagnostic side of our business. CellSignia, CellQA's third-generation diagnostic platform, identifies the underlying cellular activity dysregulated pathway signaling that may be 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 Cell Signia Platform's FACT-1 and FACT-2 trials in early-stage HR-positive HER2-negative breast cancer patients in mid-23. And finally, I'd like to welcome Dr. Polly Murphy to our board of directors. Polly has 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 we bring to our board. Now, I'd like to turn the call over to Vicki Hahn, our CFO, to review our financial results.
Robert
Thank you, Brian, and good afternoon, everyone. I'll provide a brief overview of our financial results for the third quarter of 2022, and I invite you to review the 10Q, which will be filed later today for a more detailed discussion. Our third quarter net loss was 10.9 million, or 75 cents per share, compared to a 6 million net loss, or 41 cents per share, for the third quarter of 2021. For purposes of calculating net loss per share, the reported net loss of 75 cents per share included an additional 2 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 non-cash items, including stock-based compensation and interest, We also included in our press release non-GAAP adjusted net loss for the quarter ending September 30th, 2022. Our non-GAAP adjusted net loss was 9.5 million or 63 cents per share for the third quarter of 2022 compared to non-GAAP adjusted net loss of 5.1 million or 35 cents 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 was driven by $1.2 million related to employee expenses and the remaining $3.5 million increase primarily related to activities supporting the Victoria 1 pivotal trial. General and administrative expenses were $1 million for the third quarter of 2022 compared to $0.6 million for the same period in 2021. The increase of approximately $0.4 million was driven primarily from non-cash 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 a result of non-GAAP adjusted net loss of $9.5 million offset by working capital changes of approximately $0.1 million and depreciation expense of $0.1 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 31st, 2021. I will now hand the call to Brian.
Brian Sullivan
Thank you, Vicki.
Vicki
Operator, we'd like to take questions now.
Operator
Thank you. If you'd like to ask a question, please press star 1 on your telephone keypad now. You 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 1 on your phone now. And our first question today will come from Maury Raycroft with Jefferies.
Maury Raycroft
Hi, congrats on the progress, and thanks for taking my questions. I've got two questions. So prior, you have said the study would be run at about 175 sites worldwide from 15 countries. And today, in the update, you're mentioning the selected 200 sites. Can you clarify if you'll still only run the study at about 175 of the 200 selected sites, or if you need all 200 sites, and maybe talk about reasons for why you would need 200?
Brian Sullivan
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 175 sites, but that if 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 is will in effect enhance enrollment because you have more active sites with a broader enrollment population that they'll be available.
Maury Raycroft
Got it. That makes sense. Do you think, could it actually, does it make the enrollment more robust or could it potentially accelerate the timelines some? What are your thoughts on that?
Brian Sullivan
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.
Maury Raycroft
OK. 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 site, can you comment on whether some patients have been enrolled at this point?
Brian Sullivan
Sure. Well, we haven't enrolled our first patient yet. And so we just activated our first site. And a variety of activities are required. once you initiate a study. And one of the first steps is selecting your sites, which is a formal process. Once you've 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. In some cases, approval from an independent ethics committee or scientific committee is also required. So all these steps have to be completed before a site can be considered active. And then once a site is active, they begin working with their patient population. Our patient population has an extended duration of treatment with their first-line treatment that's typically a CDK4-6 inhibitor. And it occurs over a period of time. These aren't patients that are necessarily immediately available. But over time, as you activate more sites, you get into a very predictable enrollment pattern.
Chen
Got it.
Maury Raycroft
Okay. Makes sense. Thanks for taking my questions.
Operator
And we'll take our next question from Boris Peeker from Cowan.
Boris Peeker
Great. I have two questions, one on the Victoria trial and the other one on the Salsignia assay. On the Victoria trial, I'm just curious, have you discussed the trial design with EMA? I just want to know if the study is successful, would it serve as a basis for approval in Europe as well?
Brian Sullivan
Yes, and we discussed that in the second quarter, but we sought specifically to get scientific advice from EMA. They have a formal process. We received that feedback at the end of May, and based on that feedback, we made the decision to add arm F, which is an arm to study getotelicib plus fulvestrin. And essentially, their input or recommendation was for us to essentially have the study for PIK3CA mutated patients mirror the study for PIK3CA wild-type patients.
Boris Peeker
Got it. And on the salsignia, can you set expectation of what the FACT1 and FACT2 studies need to show in order to get the assay approved?
Brian Sullivan
Sure. The objective of that study is to demonstrate or to show that the pathological complete response rate with our study treatment in the patient population that telsigmia is identifying will be superior to historical controls. And so the target population who are HER2-positive, HER2-negative, HR-positive, historically have a PCR rate of around 11%. Standard of care treatment for these early stage patients in the neoadjuvant setting is chemotherapy. And so our assumption is that, or the hypothesis is that we can demonstrate superiority to that historical control.
Boris Peeker
Is there any kind of a specific metric that the FDA wants to see that you maybe discuss with the agency, or is it just... The pathological complete response is the endpoint.
Chen
Got it. Okay. Great. Thanks for taking my questions. You're welcome.
Operator
And we'll go next to Gil Bloom with Needham & Company.
Gil Bloom
Hey, this is Chen for Gill. We just want to ask, when are you planning to start commercial preparations and if the cost of the commercial preparations are included in the cash guidance?
Chen
Thank you.
Vicki
The commercial preparations go through an evolution.
Brian Sullivan
Obviously, at this stage, we're assessing more holistically the approach that we want to take. There are a variety of different options, a variety of different approaches that could be taken. So we begin that evaluation. I think the more intensive expenditures would begin 12 to 18 months prior to expected approval. So we're a 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.
Chen
Thank you.
Operator
As a reminder, if you'd like to ask a question, you may signal by pressing star 1 on your phone now. And we'll take our next question from Alex Nowak with Craig Hellam.
Alex Nowak
Great. Good afternoon, everyone. This is Connor on for Alex. I guess first a couple on Celsignia and then one or two on Victoria. First on Celsignia, I mean, FACT 1 and 2 interims still reading out mid-2023. That all sounds good. Can you just kind of speak to enrollment trends into those trials as COVID has kind of abated here? And then second part of that question, just, I mean, what about FACT trials 3, 4, and 5? I mean, where do these stand and what's the potential timelines there?
Brian Sullivan
Sure, so regarding fact one and two, the enrollment has gotten back on track now that COVID seems to have abated or at least healthcare systems have adjusted to it. And that's why our guidance remains the same for that interim analysis. As far as the other fact studies, those are in a metastatic setting. Those were set up just as COVID was coming to fore. And so those basically got significantly affected by that, as you would imagine. And so, you know, those would be expected to have potentially interim data, you know, in later 23, early 24.
Alex Nowak
Okay, got it. Yeah, and then second on Victoria, you know, with the first site activated, is there anything you can offer us on maybe the cadence of site activation so far into Q4? You know, 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?
Brian Sullivan
Sure. Well, 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 we're proceeding... a pace across all the countries for all the sites we've selected. We expect that process to take multiple months to complete. It's something that doesn't happen immediately. I outlined the process that's required where financial operational documentation has to be prepared and approved. Each site needs to either get a central IRB to approve the study or an institutional IRB. In some cases, particularly hospitals and larger institutions, independent ethics committees will need to approve or a scientific committee. So all those factors come into fore. And we have identified a timeline for each of our sites. We have a projection that incorporates 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 the enrollment that will follow.
Alex Nowak
Okay. All right. Fair enough. Maybe if I could just squeeze one more in. I mean, you know, with the first patient expected to be dosed by year end and, you know, the private placement kind of being based off of that, you know, the first patient needs to be dosed by December 31st. Maybe just speak to your confidence level there that you can, you know, indeed get a patient dosed by, you know, December 31st.
Brian Sullivan
No, we're very confident. We're activating sites, and that's kind of the plan. I really feel very good about that.
Alex Nowak
Okay, fair enough. Thank you for the questions. Appreciate it.
Vicki
Oh, you're welcome.
Operator
And once again, if you would like to ask a question, you may signal by pressing star 1 at this time. We'll 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.
Brian Sullivan
Thank you, everyone, for attending our call. We appreciate your interest and look forward to catching up with you over the next few months.
Vicki
Goodbye.
spk07
And this concludes today's conference call. Thank you for attending.
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