Cyclacel Pharmaceuticals, Inc.

Good afternoon and welcome to the CycloCell Pharmaceuticals fourth quarter and full year 2021 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 an opportunity to ask questions. If you would like to ask a question at that time, please press star 1 on your touchtone phone. If at any point your question has been answered, you may remove yourself from the queue by pressing the pound key. In posing your question, we ask that you please pick up your handset to allow optimal sound quality. The company will also be accepting a limited number of questions submitted via email to the address ir at cyclocell.com. Lastly, if at any time during the call you should require operator assistance, please press star zero. Please note today's call is being recorded. I would now like to turn the conference call over to the company.

Good afternoon, everyone, and thank you for joining today's conference call to discuss Cyclocell's financial results and business highlights for the fourth quarter and full year of 2021. 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 CycloCell does not take any responsibility to update such information. With us today are Spiro Rambatis, President and Chief Executive Officer, Paul McBaron, 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 on CycloCell's clinical programs, and Paul will provide financial highlights for the fourth quarter and full year of 2021, which will be followed by a question and answer session.

At this time, I would like to turn the call over to Spiro. Thank you, John, and thank you, everyone, for joining us today for our quarterly and full year business update.

As we're all dedicated to helping patients in need, we are distressed to see innocent lives sacrificed, cancer patients denied care, and hospitals destroyed in the Ukrainian conflict. We therefore add our voice to many others in our industry to urge our government to continue its efforts to mediate a ceasefire and allow humanitarian assistance to reach desperate people caught in the war zone.

Let us now turn to our report.

Before describing our progress with FADRA-CYCLID and CYC-140, I wish to say how proud I am of the CYCLICEL team and our collaborators. Against the backdrop of a continuing pandemic and recent geopolitical turmoil affecting pharmaceutical operations globally, we have executed well in 2021 and achieved our clinical and corporate objectives. As a result, we're now positioned to reach important milestones, including reporting clinical data in 2022. Let us now review the FADRA-CYCLIP or FADRA program. In the third quarter of 2021, we initiated 065-101, a phase 1-2 study of oral FADRA in advanced solid tumors and lymphomas. We have now dosed 12 patients in the first four dosing levels or DLs. We have moved quickly through dose escalation as FADRA has been well tolerated at each dose level with no dose-limiting toxicity observed thus far. The last nine patients in this study are taking FADRA by mouth twice daily for five days a week for three weeks out of a four-week cycle. In DL4, FADRA is given orally at 100 milligrams. In terms of total dose, this is similar to the total dose at which durable partial response and subsequently complete response was observed in an MCL1-amplified endometrial cancer patient enrolled in the 065-01 study of FADWA administered intravenously. We believe that effectiveness of apoptosis enabling CDK inhibitors will mainly depend on achieving durable target suppression. We believe that based on available information, FADRA is the only drug in the class of apoptosis enabling CDK inhibitors to have achieved daily dosing by the oral route and single agent activity in patients with solid tumors. This may be important as venetoclax, the only FDA-approved apoptosis enabler, is also dosed daily by a mouth. Enrollment in 065-101 has progressed well with City of Hope and MD Anderson Cancer Center recruiting patients thus far. Recently, two major cancer centers in Asia and Western Europe have joined the study. Seoul National University Hospital and Val de Giron University Hospital in Barcelona were selected for their expertise with tumor types of interest. The Korean site led by Dr. Dyo is widely known for hepatobiliary, also known as cholangiocarcinoma or biliary tract cancers. And the Spanish site led by Dr. J. Tabernero for colorectal cancer. In addition to the initial four sites enrolling in the dose escalation stage of the study, we're in discussions with several other U.S. sites to be brought into the proof of concept cohort stage. As a reminder, the seven mechanistically relevant cohorts include patients with breast, colorectal, including KRAS mutant, endometrial and ovarian, hepatocellular and biliary tract, as well as lymphomas. An eighth basket cohort will enroll patients with biomarkers relevant to the drug's mechanism, including MCO1, MYC, CYCIN-E, and KRAS mutant, regardless of histology. The protocol allows for expansion of individual cohorts based on response, which may allow acceleration of the clinical development and registration plan for FADRA. The primary endpoint of the dose escalation stage is determination of recommended phase two dose and is designed to rapidly assess safety and tolerability. As specific histologies and biomarkers of interest are not required in dose escalation, this stage is not designed to determine early efficacy of FADRA. The protocol allows investigators to enroll patients with relevant tumors to FADRA's mechanism if it is in the interest of patients. In November, we achieved the second key clinical milestone in the FADRA program with the start of 065-102, our phase 1-2 trial in patients with relapsed or refractory leukemias or myelodysplastic syndromes. As previously discussed, the rationale for testing FADRA in hematological malignancies is based upon prior clinical activity and the drug's mechanism of action through CDK2 and CDK9. We have those two patients to date in the dose escalation stage of this phase 1 slash 2 study. As a reminder, both FADRA trials have been designed as streamlined, registration-directed studies that should enable us to efficiently determine the recommended phase two dosing level and assess single agent safety, tolerability, and preliminary activity across multiple histologies. With both studies underway, we plan to report new clinical and preclinical evidence supporting the unique properties and therapeutic potential of FADRA, firstly from 065-101 in solid tumor and lymphoma in the first half of 2022, followed by 065-102 in leukemia in the second half of the year. Let me now turn to our second candidate, CYC140, an orally available PLK1 inhibitor. We recently announced that 140-101, a phase 1-2 trial for the treatment of solid tumors, opened for enrollment and is now recruiting patients. Consistent with our FADRA study, this phase one slash two registration directed trial will follow a streamlined design beginning with a three plus three dose escalation stage to decide safety and recommended phase two dose. Once this dose has been established, the trial will immediately enter into proof of concept cohort stage using a Simon two stage design. In this stage, CYC140 will be administered to patients in up to seven mechanistically relevant cohorts, including patients with KRAS mutant colorectal cancer, plus a basket cohort which will enroll patients with biomarkers relevant to the drug's mechanism. Overexpression of PLK1 is known to be important in many types of cancer. Based upon the totality of preclinical evidence, we believe that CYC140 may show single agent activity in relevant cancer types. We look forward to updating you once the study gets underway. Having reviewed our clinical progress and the status of our programs, and before turning over the call to Paul to review our financials, I would like to review our key upcoming milestones. First half 2022, Dose-first patient with oral CYC140 in the 140-101 Advanced Solid Tumor Study. Initial data from Phase 1 dose escalation of the 065-101 Solid Tumor Study of oral Fadracycline. Second half, 2022. Enter phase two proof of concept stage in the 065-101 solid tumor study of oral fadrocyclib in eight cohorts, seven by histology and a basket cohort. Initial data from phase one dose escalation of the 065-102 leukemia study of oral fadrocyclib.

I will now turn the call over to Paul. Thank you, Spiro.

As of December 31st, 2021, cash and cash equivalents totaled $36.6 million compared to $33.4 million as of December 31st, 2020. The increase of $3.2 million was primarily due to $21.7 million of cash provided by financing activities offset by $18.5 million net cash used in operating activities. The company estimates that available cash resources will fund currently planned programs through mid-2023. Research and development, or R&D, expenses were $4.6 million and $15.5 million for three months and year-ended December 31, 2021, as compared to $1.4 million and $4.8 million for the same periods in 2020. R&D expenses relating to FADRA were $3.4 million and $11.1 million for the three months and year-end of December 31st, 2021, as compared to $1.1 million and $3.7 million for the same periods in 2020 due to clinical trial expenses for the evaluation of FADRA in Phase 1-2 SLASH studies and clinical supply manufacturing. Additionally, R&D expenses related to CYC 140 were $1.1 million and $3.6 million for the three months and year ended December 31st, 2021, as compared to $0.2 million and $0.6 million for the same periods in 2020, as preclinical evaluation and clinical trial supply manufacturing of CYC 140 progressed. General and administrative or G&A expenses for the three months and year ended December 31st, 2021 were 1.9 million and 7.5 million compared to 1.8 million and 5.9 million for the same periods of the previous year due to increased legal and professional and personnel costs and a lease assignment. G&A expenses included non-cash stock compensation costs of 0.1 million and 0.8 million for the three months and full year ended December 31st, 2021, compared to 0.1 million and 0.3 million for 2020. United Kingdom research and development tax credits were 1.2 and 3.8 million for the three months and year ended December 31st, 2021, as compared to 0.4 million and 1.2 million for the same periods in 2020 due to the increase in eligible R&D expenditure. Net loss for the three months and year ended December 31st, 2021 were 5.3 million and 18.9 million compared to 2.8 million and 8.4 million for the same periods in 2020. Operator, we are now ready to take questions.

And as a reminder, if you would like to ask a question, please press star and 1 on your touchtone phone. You can remove yourself from the queue by pressing the pound key. We'll take our first question today from Kevin DeGieter with Oppenheimer. Your line is open.

Hey, great. Thanks for taking our questions. Maybe two on the FADRA solid tumor program. Spiro, how should we think about the scope of the medical meeting update in the first half of the year? How many cohorts of data should we hope to get some safety data on? And then, you know, just kind of help us put in context the guidance for opening up the Phase 2 expansion cohorts in the second half of 2022. What does that suggest in terms of, you know, where you think you may ultimately land on dose escalation?

Right, thank you for that, and I will ask Mark to come and give his perspective on the specific dose, Kevin, but thank you for your question. First of all, let me explain a transition with regard to medical meeting. It has become clear now that the relevant meeting that we were interested in presenting our data has changed the policy, and we have to, therefore, use the original abstract in that meeting. We're not allowed to update it for trials and progress. This is posted on the website, so we have to comply. We therefore are thinking of a company announcement, possibly an investor event around the similar timeframe, mid-year, in which we will put the data into the public record. We expect to have safety data, per your question, for all 12 patients that have been currently enrolled for the four dose levels that were mentioned in the prepared remarks. And we may have scans for at least nine of these patients with some mature follow-up and possibly early scans, but unclear how mature for the last three on dose level four. As for the second part of the question, what are the possibilities for the phase two portion, we expect to start that in the second half. The medical team at Cyclosa have been busy speaking to a large number of primarily U.S. sites who are interested in participating, so I expect we should start smoothly. We already have four sites open, as you have heard, so we'll get possibly up to 10 sites in total participating in the phase two study to enroll patients in each of the eight cohorts in the design. Let me at this point ask Mark to give you his perspective about the rules and the protocol about determination of RP2D and what his sense is of where we are in the activity range for the drug. Mark?

Yes, thank you, Shiro.

I think you covered the trial situation very well. The way the trial is designed is we go through essentially one more dose level, and then we have completed the trial. As is usual with these things, we will present to the FDA and all that. But the way the trial is designed is that we automatically roll into the Phase II once the Phase II recommended dose is achieved. So we're pretty close. There will be full PKs and PDs that will be determined and completed and presented.

Great. And then maybe my second question on 102, and it's specific to the additional sites being opened up in Barcelona and in South Korea for the Solid Determiner Program. Will those sites also be enrolling for... Yes, the hematologic malignancy program 102 as well.

Mark, that's for you.

The current plans are to go to tumor sites where we believe they have the best efficacy for the tumor groups that we're interested in. So clearly, the Seoul group and the Barcelona group have tumor types that are of central importance for our development plans. The current plans for the hemologic malignancy trial, although these, you know, these are always subject to change, is to remain in the United States.

Great. Thanks for taking our questions. Thank you, Kevin.

We'll go next to Ahu Demir with Leidenberg. Your line is open.

Thank you very much for taking my questions. I will start with one for the program. I'm curious how many sites are currently open and also when should we expect interim data readouts?

Thank you for your question, Ahu. At this point, we have two sites open in the 140 study with a third site to open towards the mid-year point. We expect to have initial data from this study approximately a year from first patient in, which is imminent. We may have interim results to report at appropriate quarterly earnings calls in between. That, of course, depends on how fast we escalate. And that, at this point, is something that is open to question as we don't have the same extensive experience with 140 that we had with FADRA. So caution is required as we step up, but it's looking very good based on PK and PD modeling data, and we think we're going to be starting very close to the active range from the get-go. So we're encouraged and look forward to reporting the results once the escalation completes.

Thank you, Spiro. I also have a follow-up question on that. We have seen some preclinical data of the synergistic effect of Omen started with PARP inhibitors, Does the current design allow you to try combinations, and maybe if you could provide your perspective if you are considering some combinations and what makes sense?

This is a question for Mark, both in terms of the protocol, permitting or not combinations, and what are the potential synergistic mechanisms that one could consider together with a PLK1 inhibitor like 140. Mark?

Yeah, the CART strategy is based on trying to achieve single agent registration first. That's the primary goal. We think that's achievable with these drugs. There is, of course, a good time for starting to work on combinations right from the beginning in terms of the preclinical work. And then when we have an achieved phase two dose, that would be a good time to start considering combination strategies. But for now, the primary focus of these studies is on the single-agent activity.

Thank you. Thanks for taking my question.

Thank you, Ahu.

We'll go now to Jonathan Ashoff with Roth Capital. Your line is open.

Thanks, guys, and congrats on the progress. I was wondering, when you were saying how at the 100 MIG, level that you were approaching the doses that as an IV gave you that response in the MCL patient. I was just curious, can you remind us over how many doses did you compare IV to oral and, you know, was it always, of course, you know, ignoring the oral delay to blood levels versus IV? Was it very, very consistent oral and IV kind of regardless of the dose?

That's a great question, John. I think this is one for Mark. And she has now extensive experience with the oral drug.

Yes, hi. That's a very good question. Fortunately, the bioavailability of the oral drug seems to be extremely good, as was presented in the past. It's almost equivalent to the IV. So, you know, the current schedule is at a BID dose. So when we say 100, that's 100 BID, which is, you know, relatively close to what the IV dose given twice a week was in the endometrial patient. This, of course, is five days a week for three weeks out of four. So we're very excited about the current enrollment.

Okay. And may I also ask, you sounded as if you were quite confident that the fifth dosing cohort would be enough information for you to have an RP2D and proceed to phase two. Did I hear that correctly?

Well, that's how the protocol is written at this time. So those are the predetermined levels that we have in the protocol. So in theory, when these are done, we will then go onto the phase two. Of course, before that decision is fully finalized, we need to see the PKs and get all of that information together, but we're pretty close.

Okay, so then what's my next question here? I mean, suppose you're not happy with the fifth dose level. Can you proceed to higher doses in phase one?

Yeah, well, I could always write an amendment if one needs one.

Okay, but you would find that to be an unexpected thing in your country. You don't think you'll be doing that?

It's not unexpected. We're aware that that may be a possibility. But so far, we've been very happy with the progress we're making and with the way the lab results have been turning out.

Okay. Thank you very much, guys.

Perhaps one thing I could add, Jonathan, to Mark's answer is that the way the protocol is written, remember we're dosing three weeks out of four weeks in the cycle. So if we're happy with safety and they're currently dosing level four, we could always go to four out of four weeks of treatment, which means that we're going to give it without a break. That's probably more likely than going up. And the reason why this is the history of this class of transcriptional CDK inhibitors that experience diminishing returns after a certain point of exposure with threshold. In other words, more drug is not necessarily better. It could be worse. So for this reason, we're more likely to go to a longer schedule than to go up in dose. But that, I hope, gives you a bit more color on our thinking.

Definitely. And lastly, you guys made a very brief comment about tox. Can you talk any more about toxicity, particularly at the 75 and 100 BID doses?

Sure. We have data on the first nine. So, Mark, please give Jonathan your view on currently observed safety image of the drug.

So, you know, the determinant of safety in a phase one trial like this is, you know, the rapidity in which you can go from dose level to dose level. We have not had to expand any of the dose levels. So, so far there have been no drug-related toxicities significant to slow down the escalations through the dose levels.

Okay. Thank you very much. Thank you, Jonathan.

And once again, if you would like to ask a question, please press star and one on your touchtone phone. We'll go now to Kumar Raja with Brookline. Your line is open.

Thanks for taking my questions and congratulations on the progress. With regard to the phase two and the different combinations, how are you thinking about dosing there with regard to safety and efficacy?

Mark, would you take that for FADRA, please, regarding combinations? Sure.

I mean, you know, it's important to note we have a large number of tumor types that we believe may be sensitive to the drug, which would mean that the possibilities of combinations are very large. It's very extensive. set of possibilities that we may have. As I mentioned before, we are doing preclinical data to set ourselves up for some of these things. There are some obvious ones in today's, you know, discovery environment, but we don't have, there's no specific plans to launch anything until we have our phase two dose in place. That's the real determinant of where we can go after that. Okay.

I'll add one more thing, if I may, Kumar, to Mark's reply, which is that we have preclinical data suggesting that padracycline and possibly other CDK2-9 inhibitors could potentially synergize preclinically with immuno-oncology drugs like anti-PD-1, anti-PD-L1. That is a possibility in the clinic, but as Mark explained, we need to first see single-agent activity and then develop appropriate preclinical modifications of the current study, because that is all within the current protocol. We don't need to go to the FDA or IRBs to get approval, and then propose appropriate combinations in light of the available single agent data. Hope this gives you a little bit more color in our thinking.

Okay. And with regard to the leukemia study, it looks like the enrollment is comparatively slower compared to the solid tumor. Is it just a factor of the number of sites you have onboard enrolling for these studies, or what are the factors driving the comparatively slower enrollment?

That's exactly correct. We've only opened City of Hope at this point. MD Anderson is only now coming on stream, so your estimate is correct. We expect enrollment to pick up in the second part of the year with two sites open, and possibly we'll have additional sites during the study, depending on the progressions of the escalation levels.

Thanks so much. Thank you, Kumar.

It does appear that we have no further questions at this time. I'd like to hand the call back to Mr. Rambadis for closing remarks.

Thank you, operator. And thank you, everyone, for joining Cyclasel's fourth quarter earnings call. Our focus is to continue efficient execution of our business plan, building on our team's accomplishments in 2021. With cash on hand to fund through our clinical and corporate milestones into mid-2023, we're looking forward to reporting soon new clinical and preclinical evidence supporting the unique properties and therapeutic potential of Fadracyclib and eventually CYC140. Thank you for your time and support of our efforts to help cancer patients in need. Operator, at this time you may conclude the call.

This does conclude today's program. Thank you for your participation. You may disconnect at any time.