Cyclacel Pharmaceuticals, Inc.

Good afternoon and welcome to the Cyclas Cell Pharmaceuticals first quarter 2022 results conference call-in 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 telephone keypad. 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 cyclacell.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 Cyclasel's financial results and business highlights for the first quarter of 2022. 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, or Form 10-Q. This filing is 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 Rombatis, 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 program, and Paul will provide financial highlights for the first quarter of 2022, which will be followed by a Q&A session. At this time, I would like to turn the call over to Spiro.

Thank you, Irina, and thank you everyone for joining us today for our quarterly business update.

I am happy to report that the significant progress we made in expanding our clinical development programs in 2021 has continued into the first quarter of 2022. At present, enrolling patients in new clinical trials remains a headwind for many biotechnology companies. Despite these ongoing challenges, the cyclosal team has executed well on its clinical development plan. We are now dosing patients across three separate registration-directed Phase I-II clinical trials with our two drug candidates, Fadrocyclib and COC-140. Such productivity speaks volumes to the skill and dedication of our team and the strong relationships we continue to build with several leading cancer centers in the U.S. and abroad. Importantly for our stockholders, we are on track to meet our key milestones for our two drug candidates during 2022, including initial data for oral fibrocyclips. Despite the broad selling pressure weighing for several weeks on biopharma equities, life science innovators with competitive assets will be rewarded when markets recover. To this end, we estimate that we have sufficient resources to fund planned operations through mid-2023 and are well-placed to deliver initial clinical data highlighting our competitive leadership position. Let us update you on our progress in our CDK2-9 inhibitor program with Fadracycline, or FADRA for short. We continue to enroll patients in two Phase I-II studies with oral FADRA. The most advanced of these studies, O6-5-101, is evaluating FADRA in patients with advanced solid tumors and lymphomas. Since our last update, the study has reached dose level 5, or DL5, with 13 patients treated in the dose escalation stage. Pharmacokinetic analysis from the first three DLs have shown dose proportional exposure with more data coming through in real time. We are pleased to report that FADRA has been well tolerated and no dose-limiting toxicities or DLTs have been observed thus far. As provided in the protocol, the study has escalated to dose level five with patients dosed continuously, that is daily dosing from Monday through Friday each week in the entire four-week treatment cycle. Following completion of enrollment of DL5, the last one specified in the protocol, we will review safety, activity, pharmacokinetic, and pharmacodynamic data from all Phase I patients and determine whether appropriate exposure of a threshold has been observed. In addition, we will determine pharmacogenomic profiles of enrolled patients and analyze correlative data regarding protein levels. The totality of data will help us determine the recommended phase two dose, or RP2D, for FADRA in patients with solid tumors and lymphomas. We anticipate completing these analyses in the coming weeks and remain on track to initiate the phase two part of the 065-101 study

in the second half of 2022.

In our second phase one slash two study, 065-102, FADRA is being evaluated in patients with advanced leukemias. Both City of Hope and MD Anderson Cancer Center are open and enrolling patients with DL1 now fully recruited. We are evaluating safety and PK in this study in parallel with findings in the solid tumor program. As patients with blood cancers can often tolerate higher treatment levels, this study may determine a different RP2D than 065-101. As a reminder, 065-102 will explore single agent activity and also combinations of oral FADRA with approved therapies for various hematological malignancies, including oral venetoclax. This strategy is supported by recently published preclinical data by researchers from MD Anderson Cancer Center. They confirmed that Fadraciclib inhibited CDK9-mediated transcription and reduced levels of MCL1 in primary cell lines of chronic lymphocytic leukemia, or CLL, both as a single agent and in combination with venetoplex. Single-agent FADRA showed activity across all primary CLL cell lines. The combination of Fadraciclib and Venetoclax was highly effective against CLL lines with the difficult-to-treat 17P chromosomal deletion, whereas each drug alone was not effective. As a highly selective inhibitor of both CDK2 and CDK9, FADRA can help restore apoptosis in a cancer cell in two important ways. By targeting CDK9, FADRA suppresses the expression levels of anti-apoptotic proteins such as MCL1 and MYC. By targeting CDK2, FADRA jams a cancer escape mechanism when CDK9 is inhibited. Targeting CDK2 also suppresses cyclin E, a cancer protein to which tumor cells become addicted. Dosing drugs with an apoptosis-enabling mechanism is thought to require continuous daily dosing. Applying constant pressure to anti-apoptotic proteins like MCL1, MYC, or BCL2 is required to prevent the recovery and regrowth of tumors. Continuous daily treatment is how we dose oral venetoclax, the only FDA-approved medicine in this class of anticancer therapeutics. We believe that oral FADRA safety profile with a continuous daily schedule is an important competitive advantage, which has not been matched by other competitors in the transcriptional CDK inhibitor field. Let us now turn to our oral PLK1 inhibitor, CYC140, or 140 for short. We designed 140 to have distinct biological and structural properties that can leverage its apoptosis enabling mechanism. We believe that these characteristics, in addition to high potency and promising anti-cancer activity in multiple proclinical models of solid tumors and leukemia, suggest a differentiated biological mechanism to other PLK inhibitors currently in development. Consequently, our clinical development plan for 140 will initially explore its potential for single agent activity across a range of solid tumor types and hematological malignancies. In April, we announced that the first patient was dosed in 140-101 our Phase I-II trial of 140 as a single agent for the treatment of solid tumors and lymphomas. We're also pleased to have opened City of Hope and MD Anderson Cancer Center as the initial sites for the 140-101 study, and both have enrolled patients in DL1. Similarly, with our FADRA strategy, 140-101 is a registration-directed trial with a streamlined design, beginning with 3 plus 3 dose escalation to determine safety and RP2D. Once RP2D has been established, the trial will immediately enter into proof of concept or cohort stage using a Simon 2 stage design. In this phase two stage, 140 will be administered to patients in up to seven mechanistically relevant cohorts, including patients with bladder, breast, liver, and biliary tract, lung, colorectal, including KRAS mutant cancer, and lymphomas. In addition, an eighth basket cohort will enroll patients with biomarkers relevant to the drugs mechanism. We will provide updates as the phase one dose escalation progresses with initial data expected in the first half of 2023. Having reviewed our clinical progress and the status of our programs, I will turn the call over to Paul to review our financials. Paul.

Thank you, Spiro. As of March 31st, 2022, cash and cash equivalents total $29.6 million compared to $36.6 million as of December 31st, 2021. Following receipt after the quarter end of $3.6 million of United Kingdom research and development tax credits and $1.3 million in royalty receipts, pro forma March 31st, 2022 cash and cash equivalents are $34.5 million. The company estimates that its available cash will fund currently planned programs through June 2023. Research and development, or R&D, expenses were $5 million for the three months ended March 31, 2022, as compared to $2.6 million for the same period in 2021. R&D expenses relating to FADRA Cyclib were $3.6 million for the three months ended March 31, 2022, as compared to $1.7 million for the same period in 2021, due to increasing clinical trial costs associated with the ongoing clinical trials evaluating FADRA in Phase 1-2 studies, along with an increase in non-clinical expenditure. Additionally, R&D expenses related to CYC140 were $1.1 million for the quarter ended March 31, 2020, as compared to $0.7 million for the same period in 2021 due to costs associated with the opening of clinical trial sites and the start of the Phase 1-2 study evaluating CYC140 in solid tumors and lymphomas. General and administrative expenses for the three months ended March 31st, 2022 were 1.6 million compared to 1.7 million for the same period of the previous year due to a decrease in professional and recruitment costs. Total other income net for the quarter ended March 31st, 2022 was 1.3 million compared to 0.1 million for the same period of the previous year The increase of 1.2 million for the three months ended March 31st 2022 is primarily related to royalty income received from Thermo Fisher Scientific. United Kingdom research and development tax credits were 1.1 million for the three months ended March 31st 2022 as compared to 0.7 million for the same period in 2021 as a direct consequence of increased qualifying R&D expenditure. Tax credit receipts of 3.6 million in respect of the financial year ended December 31st, 2021 were received in May 2022. Net loss for the three months ended March 31st, 2022 was 4.1 million compared to 3.5 million for the same period in 2021. Operator, we are now ready to take questions.

At this time, if you would like to ask a question, please press star 1 now on your telephone keypad. To withdraw yourself from the queue, you may press the pound key. Again, to ask a question, press star 1 now on your touchtone phone. We will take our first question from Kevin DeGieter of Oppenheimer & Company.

Great. Thanks for taking our questions, and congrats on a lot of solid progress in terms of enrollment. Spiro, with regard to oral FADRA, I guess really two questions. First, have any patients been dosed in Cohort 5? Your comment with regard to no DLTs to date. I just want to appreciate that includes any exposures at Cohort 5.

Sure, Kevin. Thank you for your question. Mark, would you please answer that?

The answer to that question is positive. Yes, we have a patient who's almost done with the first cycle and is doing very well.

Great. And then in terms of, you know, time frame or venue to update the investment community, you know, on the dose escalation for oral FADRA and solid tumors, is it still reasonable to expect an update in the summer time frame or just any perspective there?

Yes, so we expect to do company R&D events. This R&D day is probably going to happen in the summer, more likely early summer than late summer. But that, of course, depends on the totality of data becoming available, as we mentioned in the prepared remarks. So this is imminent.

Terrific. And then with regard to 065102, the hematologic malignancy study, can you just remind us of kind of where the starting dose is there relative to the exposures we've seen in solid tumors and kind of, you know, thought process on, you know, how one might think about, you know, the pace of dose escalation, particularly in light of there being experience with IV FADRA, you know, in this population.

Yes, there is also a question for Mark. If you could please answer the question on the strategy behind the heme dosing.

Sure. So, essentially, it's identical to the solid tumor dosing. It's just a question of, you know, which one would start first. And, of course, the solid tumor trial has pulled way, way ahead, and we're taking steps now to bring the leukemia trial in line with the doses that we have in the solid tumor trial. So, there's a gap, but it will be closed very shortly.

That's great. I guess I'll get back in the queue and ask any questions on follow-up. Thank you.

Thank you.

Our next question comes from Ahu Demir of Landenburg-Fallman.

Hello. Thank you for taking my question. Congratulations on the progress. This is impressive. So I will ask about the 140 program. My first question will be how many active sites do you have and how many additional sites do you plan to open? And following up on that question would be if you could elaborate on the dosing schedule. I know it's a little bit different than other PLK inhibitors, just curious on the dosing schedule as well.

I'll take the first part of your question, Ahu, and thank you for that. And Mark will answer the second question about the dosing strategy. So we've opened the same two sites for this drug as well, for 140-101, based on strong interest in the mechanism. But there's a large number of centers behind which we might not open right away. The reason is that this is a new program. We have a lot less information about the drug IV than we did with FADRA, and we need to move carefully. But also, and very strategically, we have strong reasons to believe that 140 may have single-agent activity. This was the case with the earliest member of this family of anti-cancer drugs, Volacetib, but that has not been thoroughly explored by other sponsors pursuing the same mechanism. So this is something that we'd like to do very carefully and very thoughtfully before we go and open to a wide number of sites to identify both PK and PD profile, as well as look for correlates. So that's one of the reasons why going with two initial centers is probably the best strategy. And I would like Mark to discuss the dosing.

Hi, so as Spiro said correctly, we're very interested in exploring the simulation possibilities of this drug. So, you know, we have an oral drug, which we believe from our studies is well tolerated. So we're attempting to maximize the potential of an oral drug and to give it as frequently as is tolerated. you know, following the PKs and the mechanism of action. And so I guess the goal will be to try to get it as continuously as possible as is tolerated. But as we're just getting started, it's hard to predict. But that's our plan.

Just to give some more color to Ahu's question on starting dose, we are in the single-digit milligram range. This is a very potent drug, possibly the most potent drug we ever made at Cyclosal in our history, which means that we will escalate in slow steps. If you compare our agent with Onvansertib, the other clinical candidate in this space, you would note that they have almost identical IC50s or potency against PLK1 and very similar solubility, which means that we're not going to be very far away from the flat dosing that they have seen in their studies. Of course, we need to escalate in our program and identify, as Mark said, all of the other information we need, but we feel very comfortable this is the right dosing strategy.

Thank you, Spiro. One of the remarks you had made was differentiating profile of 140 compared to other PLK1 inhibitors. Could you elaborate on that? What are the differentiating factors?

Sure. Thank you for that. I would say that in the context of Velocitib, the earliest drug in this class, 140 has more in common, including the potential to show a single agent activity, which was reported with Velocitib some years ago. The main issue with Velocitib, which is differentiated in the 140 profile, is IV dosing and long half-life. almost three days or 100 hours plus. In the case of 140, the drug is given orally, as Mark explained, and we have a very short half-life, possibly best-in-class around 11 hours. The second drug in the class, Onvansertib, has 24 hours of half-life and is given orally. It seems to be well-tolerated. However, it has not been tested as a single agent. The sponsor went straight into combinations almost from the beginning of the clinical development plan. That may be appropriate for that drug, but we feel that based on its differentiated biological mechanism, 140 deserves an evaluation as a single agent. We will be able to show at an R&D event some additional preclinical data, some of which is produced by investigators, who we hope will join our study, which will document that on top of company-owned data. So we have strong preclinical fact base to believe that single agent activity is feasible, and we intend to pursue this in the clinic.

I have one last question, again, on the 140 program. Looking at the indication selection, what is the rationale behind choosing such different indications, letter, TNBC? What was the rationale behind it?

Sure. Mark, would you like to answer Ahu's question, please?

Well, essentially, every one of the targets that we've identified as the cohorts that you see has a PLK1-related mechanism. So there's either data that we have from investigators, preclinical work, work that was done with previous agents in this class, or published data on a PLK1 mechanism So they're all, these are all, all these targets were, you know, verified with our group of investigators, and we believe they're all potential single-agent registration strategies if we should see groups of, if we should see adequate responses.

Thank you. I appreciate you taking my question.

Thank you, Ahu. And once again, to ask a question, that is star 1 now on your telephone. We'll move next to Kumar Raja of Brookline Capital.

Hi. I'm Shubendu for Kumar. Thanks for the update. I just have one question with regards to the CYC 140 program. So different cancer tissue types show different levels of overexpression, you know, which we call full change in PLK1 expression. So do you have a threshold for that for the different cancers that you have included in the trial? Would you then match the specific by-markets with certain levels of PLK1 over expression? Thank you.

Mark, would you like to answer this question, please?

I think the best answer would be that the trial is designed to answer that question. So we have a lot of science built in to the study specifically to answer that question. But I don't think at this point in time there's a known threshold for overexpression or sensitivity. But as I say, we have a large amount of correlative studies built into the study with blood draws before and after treatment that should help clarify this issue.

Okay, thank you. Just one more follow-up question. So you have different tissue types in your crowd. Do you expect more success in one tissue type versus the other, or what is the expectation going into the crowd? Thank you.

Mark? So, sure. So, you know, one of the...

One of the major pluses of the trial design that we have with the biostatistical design and the cohorts that we have is the flexibility to specifically target that question. So we think there are a number of possible tumor types that may respond, and we'd like to not miss them. So we have the cohorts that we define as well as a basket. If data comes forward that suggests that another tumor that we haven't recognized may have overexpression of PLK1 in this rapidly moving scientific field. So the trial has the flexibility to take those into the basket and then treat them and then open them as independent cohorts. And each of these cohorts has a futility you know, designed to it so that if we treat X number of patients and we don't see a response, that cohort will close. So, you know, it's a nice way to be able to treat a large number of different tumor types and identify which are the best ones that will be most likely to respond with the minimal cost because it's all grouped into one big study.

Does that answer you? I hope that answers your question.

Yes, it does. Thank you so much. Thank you. I'll get back in line. Thank you. Thank you so much for taking my question.

You're welcome.

Once again, that is star 1 on your telephone keypad. We'll move next to Jonathan Ashoff of Roth Capital.

Hi, guys. I joined a bit late. I was wondering if this was already covered. Is there any point at which you rethink the liquid tumor trial? You know, it's been rolling since November, and it's still in that first dose cohort. I was just curious if you kind of had a time by which you might rethink doing that at all.

That's an excellent question. Of course, given the stock market pressures that we discussed earlier, this could be an opportune time to give it some attention. However, we do believe that fadrocyclib is particularly well-suited to this mechanism. Consider, for example, that the standard of care in the United States, which is venetoplax with hypomethylating agents, is associated with treatment failure when MCA1 levels go up. This is almost too good to be missed an opportunity to test the CDK inhibitor. The delay you mentioned was primarily due to logistics. It took us longer to open one of the two sites we have in the study, primarily because of process and the year-end issues. Now that both sites are open, we expect the study to move rapidly. I also made the remark earlier regarding the fact that we can analyze safety data from the solid tumor study and hopefully interpolate that into the leukemia program. As we all know, patients with leukemia can sometimes tolerate higher doses of anticancer therapy. So this is a program that will at some point, by 4K, possibly diverge from the solid tumor recommended phase 2 determinations. So that's one of the reasons why discontinuing this program now would not be appropriate, but certainly is something we will consider in totality of data once we get across one or two more dose levels. So we're not far away, but we'll soon have an answer whether this drug is suited for patients with hematologic malignancies, Jonathan.

That's good to hear. Thank you, Spiro.

Do you have any other questions for us, Jonathan? I guess no. So operator, we can take the next question, please.

And once again, that is star one to ask a question. One moment while we queue. And it appears that we have no further questions via the phone lines. I'd be happy to return the call to Mr. Rombatis for any closing remarks.

Thank you, Leo. And thank you, everyone, for joining Cyclos Health's first quarter earnings call. As mentioned earlier, CycloCell is poised to enter an important period as we expect key pipeline readouts, which may be transformative for the company. We believe that Oral Fadrocyclib and CYC140 are two differentiated clinical assets with strong potential for activity across multiple types of cancers in first or second in their respective classes.

We look forward to providing additional updates and initial clinical data in the next quarters. Thank you.