Cyclacel Pharmaceuticals, Inc.

Good afternoon and welcome to the Cyclocell Pharmaceuticals second quarter 2022 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 telephone keypad. If at any point your question has been answered, you may remove yourself from the queue by pressing star 2. 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 cyclacel.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 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 second 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, our 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. Mark will review Cyclocell's clinical programs, and Paul will provide financial highlights for the second 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. The major highlight of the second quarter is was our mid-year update on June 30th, at which we reported initial clinical results with oral Fadracycline, or FADRA for short. FADRA, our lead product candidate, is an orally available CDK2 and CDK9 inhibitor enrolling patients in a Phase I-II study for the treatment of solid tumors and lymphomas designated 065-101. Thus far, we have enrolled 17 patients in the dose escalation part of the study, reaching dose level five without dose-limiting toxicity. Based upon preliminary results in the first five dose levels with FADRA, dosed daily, we are highly encouraged with the evolving safety and anti-cancer activity profile of oral FADRA as monotherapy. Importantly, this anti-cancer activity has been observed during the phase one dose escalation stage, which typically treats all-comer, sicker patients who have received multiple prior therapies. Ordinarily, we do not expect to see much or any significant evidence of clinical benefit in such a heavily pretreated Phase I population. Initial observations of all FADRA activity as a single agent dose daily build on those in a prior clinical study which dose FADRA intravenously, albeit with a suboptimal dosing schedule. These included a patient with heavily pretreated MCO1-amplified endometrial cancer who achieved a confirmed complete response after initially achieving partial response. This patient remains on study after more than two and a half years of treatment. The 065-101 study of oral FADRA continues to enroll very well at four U.S., South Korean, and Spanish sites and is on track to establish recommended Phase II dose, or RP2D, within 2022. We anticipate starting the Phase II stage of this study shortly after RP2D. Dr. Mark Kirschbaum, our chief medical officer, will provide further details on this study and our other programs. As clinical data with all FADRA in 065-101 are starting to emerge, we're also encouraged by FADRA's competitive attributes, particularly as we survey the next generation CDK inhibitor landscape. Relative to other development stage CDK inhibitors, We believe that oral FADRA has the potential for best in class thus far based on dual targeting of CDK2 and CDK9, very good tolerability at higher dose levels, a daily dosing schedule, and preliminary anti-cancer activity in patients with lymphomas, endometrial, and pancreatic cancers. We note that targeting CDK2 appears to be gaining more visibility as an important target for the biopharma industry. For example, Pfizer recently disclosed plans to advance its CDK2 inhibitor into a substantial Phase II study for the treatment of breast cancer, which clearly represents a sizable investment and a vote of confidence in the class. Notably, this Pfizer molecule does not inhibit CDK9. Data from cyclocells clinical studies show that patients with gynecological cancers often overexpress multiple proteins that can be suppressed by targeting both CDK2 and CDK9. Hence, a dual inhibitor may have advantages over inhibitors that target a single enzyme. Our second clinical protocol, designated 065-102, is evaluating oral FADRA in leukemias or myelodysplastic syndromes and is now dosing patients at dose level 4. 065-102 may provide further opportunity to differentiate FADRA from other CDK inhibitors if it is effective in both solid tumors and blood cancers. Let me also briefly mention our third protocol, 140-101, which is actively enrolling patients with solid tumors and lymphomas in a streamlined phase 1-2 trial of our oral PLK1 inhibitor, CYC140. We believe that preclinical and early clinical data generated thus far support the potential of CYC140 single-agent activity. Importantly, This molecule is differentiated from the only other PLK1 inhibitor in clinical development on several attributes. We will have more to report on this compound, including details of its mechanisms of action, at our upcoming R&D day. I'd like to now turn the call over to Mark, who will provide additional details on the FADRA clinical development program and the rest of our pipeline. Mark?

Thank you, Spiro. I would first like to review preliminary results of the phase one dose and schedule finding part of 065101, given the promising safety and early efficacy results we are seeing. We have enrolled 17 patients thus far, with no severe drug-related adverse events reported. Oral FADRA has been well tolerated at all dose levels to this point. With regard to responses, although we are still in the dose finding portion of the trial, with higher dose levels still to study, we have already seen one patient with cutaneous T-cell lymphoma, or CTCL, achieve the partial response, or PR, as measured by the most widely used method to monitor CTCL, known as the modified SWAT, or modified severity-weighted assessment tool. At the current fifth dose level, which is 100 milligrams twice a day for five days every week over a four-week cycle, two further patients are showing signs of clinical activity. A patient with a very aggressive form of T cell lymphoma achieved a 38% reduction in target lesions by PET scan during the first treatment cycle. A third patient with advanced endometrial cancer achieved stable disease along with a 15% reduction of target lesions within the first treatment cycle. It is also noteworthy that a pancreatic cancer patient on dose level 4 achieved stable disease by confirmatory scan following five treatment cycles or approximately five months. This is a remarkable result in pancreatic cancer, which is notoriously difficult to treat. Given the activity and safety of FADRA, we plan to optimize dosing by evaluating up to two more dose levels to ensure that we do not miss any activity. This is supported by our preclinical models, which we intend to present at our upcoming R&D day. As we are not seeing toxicity, all clinical investigators in the study have agreed that it would make medical and scientific sense to continue dose escalation with the current four-week schedule. The two additional dose levels will follow the usual three plus three design to determine the recommended phase two dose or RP2D before we enter phase two where patients with defined tumor types will be treated with a primary objective of response to treatment. Based on the streamlined design of our trial, once the dose and schedule are established, We will enter directly into the phase two stage, which is designed with the appropriate biostatistics to allow discussion with regulatory authorities in the event of continued activity in certain tumor types. The tumor types used to focus upon in phase two will reflect phase one experience, as well as extensive preclinical work by the company and by several of our investigators, and we'll also consider indications of unmet medical need that may lead to an accelerated approval strategy. We are also testing oral FADRA for the treatment of leukemias and myelodysplastic syndromes in study 065102. This study continues to enroll patients at City of Hope and MD Anderson Cancer Center. Based on good tolerability in 065101, we recently introduced a protocol amendment in 065102 that allows us to admit dose levels 2 and 3. We are now enrolling at dose level 4, which we believe should shorten the timeline for reaching RP2D. Similar to the solid tumor study, once RP2D is determined, the study will enter into proof-of-concept cohort stage, where FADRA will be administered both as a single agent and in combinations to patients in up to seven cohorts relevant to the drug's mechanism of action and informed by the clinical activity of FADRA in previous studies. Single agent cohorts will include patients with acute myeloid leukemia or myelodysplastic syndromes who have an inadequate response or have progressed on venetoclax combinations with hypomethylating agent or low-dose ARC. We will also enroll the cohort with relapsed refractory AML or MDS patients with FLT3, KIT, or MAP kinase pathways, including NNK-RAS, BRAF, PTPN11, and NF1. The trial will also include patients with CLL who have progressed after at least two lines of therapy, including a BTK inhibitor and or venetoclax. In April, we were pleased to announce a publication in the journal Leukemia that confirmed FADRA's ability to suppress MCL1 and synergize with venetoclax in CLL. Results from the preclinical study confirmed that FADRA inhibited CDK9 mediated transcription reduced levels of the short-lived anti-apoptotic protein MCL1, and induced apoptosis in primary CLL cells. To repeat an earlier theme, these data highlight the importance of continued treatment to prevent recovery of MCL1 protein levels. Importantly, FADRA combined synergistically with the BCL2 antagonist venetoclax, demonstrated even greater synergy when targeted against 17p-deleted CLL cells which were not sensitive to either agent alone. During the second quarter, we also made important progress advancing our novel PLK1 inhibitor, CYC140, into a phase 1-2 study for the treatment of solid tumors and lymphomas. Similar to the two FADRA protocols, 140-101, is a registration-directed study now enrolling patients in Phase I dose escalation at City of Hope and MD Anderson Cancer Center with two further overseas centers ready to enroll patients. We are encouraged with the drug's performance in the clinic thus far, having observed no dose-limiting toxicities. With respect to early signs of activity, one ovarian cancer patient with metastases has achieved stable disease with tumor shrinkage after the first treatment cycle. and is continuing on treatment after three cycles. As previously mentioned, we plan to hold an R&D day in the fall, at which we intend to provide a comprehensive update on both the oral FADRA and oral CYC140 clinical programs in patients who have received multiple treatment cycles and higher doses, as well as the preclinical work that has been done by CycleCell and our collaborators. Given the importance of demonstrating on-target activity, we have made it a high priority at CycloCell to develop collaborations with outside research groups to further inform us on the molecular, pharmacokinetic, and biological properties of FADRA and CYC140. This should be an exciting event, as it will highlight the unique competitive attributes of FADRA and CYC140 in their respective classes. I will now turn the call over to Paul.

Thank you, Mark. As of June 30th, 2022, cash and cash equivalents total $29.1 million compared to $36.6 million as of December 31st, 2021. The company estimates that available cash resources will fund currently planned programs into the second half of 2023. Research and development, or R&D, expenses were $4.2 million for the three months ended June 30th, 2022, as compared to $4.1 million for the same period in 2021. R&D expenses relating to FADRA were $2.6 million for the three months ended June 30, 2022, as compared to $2.8 million for the same period in 2021. Due to increased clinical trial costs of $0.5 million, associated with clinical trials evaluating FADRA in Phase 1-2 studies, offset by a reduction of $0.7 million in non-clinical expenditures. Additionally, R&D expenses related to CYC 140 were $1.5 million for the three months ended June 30, 2022, as compared to $1.1 million for the same period in 2021 due to clinical trial costs associated with the start of the CYC 140 Phase 1-2 study. General and administrative expenses for the three months ended June 30, 2022 were $1.6 million compared to $2 million for the same period last year due to a decrease in facilities, professional, and recruitment costs. United Kingdom research and development tax credits were $1 million for each of the three months ended June 30th, 2022 and June 30th, 2021 and are related to qualifying R&D expenditure. Net loss for the three months ended June 30th, 2022 was $4.6 million compared to $5.1 million for the same period in 2021. Operator, we're now ready to take questions.

At this time, if you would like to ask a question, please press the star and 1 keys on your touchtone phone. You may remove yourself from the queue at any time by pressing star 2. Once again, that is star 1 to ask a question. And our first question will come from Ahu Demir with Leneberg Bellman.

Good afternoon. Thank you very much for taking my question. My first question will be about the R&D day. What are the plans to disclose at the R&D day? Do we expect to see any safety data from the FADRA program? And I do have a follow-up question after that.

Hello, Ahu. Thank you for your question. Yes, of course. We will show an update of current data, including any maturity we have from patients enrolled subsequently to the mid-year announcement during the R&D day event, which should be in the middle of the Q3 period.

That's helpful. Another question I have, Spiro, is do you see any synergistic toxicities inhibiting CDK9? Are there anything that causes a synergistic toxicity there?

There is a question from Mark. Hi.

We haven't really seen toxicity at all in the study so far. So hopefully we'll stay that way.

That sounds great. My last question is on the PLK program. You are assessing solid tumors as well as heme malignancies, and we have seen some data from other PLK1 programs. I am curious if there's a particular indication you think there is a higher chance for 140 to be successful or you're more excited about. I would love to know about that as well.

Well, that's a great question, and we would like to know more answers as we go further in the clinic. We're still in dose escalation much earlier than the FADRA program. But we have disclosed our target indications for phase two, which are based on a variety of factors, including preclinical results and suitability of the target. And as you can see, these are bladder cancer, lung cancer, as well as hematological tumors that we mentioned earlier, including some lymphomas. Of particular interest, of course, to many investors following the PLK1 space is KRAS. in colorectal cancer, and we are excited to see that perhaps in the early stages of our Phase 1 protocol, we might see colorectal patients based on the sites we have included in our trial. So it's still very much work in progress, but there are several indications not included in the other companies' program that we intend to pursue as part of our Phase 2 protocol.

Well, thank you very much for taking my call. Thank you, Ahu.

Thank you. Our next question comes from Kumar Raja with Brookline Capital.

Hi, I'm for Kumar. So with regards to the CYC 140 dosing, you had mentioned earlier about initiating in the single-digit milligram range. So what kind of dose levels have you been able to test, and how does it look so far?

So this is the question about 140, right?

Yeah, yeah.

Okay, thank you. I'll ask Mark to answer the question about the starting dose level and where we expect that to top out.

Yeah. You know, we're still early in that trial. So we're still in the low dose ranges. We're following it with PKs and we will move forward. But even at the low dose level, we're starting to see some activity. Of course, we have this published preclinical data that suggests that low dose continuous dosing with this drug may also have another form of clinical activity and We're sort of seeing that now. So that's kind of where we are right now in the trial. It's still early, and we'll be continuing to dose upward. I hope that answers your question.

Yeah, yeah, it does. My follow-up question would be, so could you talk a little bit about the enrollment in the 140 trial? And are both solid and liquid cancers, are they enrolling at the same rate? I think we had earlier talked about issues with enrollment in liquid cancers, so any color on that would be useful. And are you planning to activate any additional sites other than the end ganders and the CGLO hook? Thank you.

Marshal, what were you asking about? 140, Subindra asked about 140, and then future plans for Heme. In 140.

Yeah, I think, again, 140 is very early, so it's important for us first to figure out the dose and schedule. And as we get close to that, I think then we will activate the leukemia part of the study. For now, the focus is on... on solid tumors and lymphomas, which we successfully grouped together in the FADRE trial as well. It turned out to be a good idea. And we're doing it in the 140 program as well.

Thank you so much. I'll get back in line.

Thank you.

Thank you. Once again, that is star one to ask a question. Our next question will come from Jonathan Ashoff with Roth Capital Partners.

Thank you, guys. I was wondering if you could help us understand what conferences we might be seeing some data at, things where you put a place card abstract or something that makes you reasonably sure we'll have stuff at that or those conferences.

Hello, Jonathan. I think you're asking a question about whether we have plans to present data at upcoming conferences. Is that correct?

Yeah, which ones in particular? And if you've submitted any placeholding abstracts or have any other reasonable surety that we'll see data at that or those conferences.

Right. We have submitted an abstract at an upcoming medical conference in oncology. This is later in the year. We do not know yet if our abstract was accepted. As you may be aware, there are various conferences that have different rules about updating placeholders. Some do not allow placeholders anymore. Some do. At this point, we expect to provide updated data sometime in the middle of the second half, probably after R&D day, assuming that the abstract is accepted. And then we'll follow up, of course, in 2023 with follow-on submissions. But there will be at least one presentation if accepted this year.

Okay, at least one. Thank you very much.

Thank you.

Once again, that is star one to ask a question. All right. We have no further questions at this time, so I would like to turn the call back over to Mr. Rombatis for any additional or closing remarks.

Thank you, operator, and thank you, everyone, for joining Cyclocell's second quarter earnings call. We're excited by FADRA safety, tolerability, and observations of anti-cancer activity in the ongoing solid tumor study and the momentum of enrollment. We anticipate building even more momentum as the FADRA solid tumor trial advances along with the other two clinical stage programs. The data we have generated thus far would not have been possible without the support of our dedicated physician collaborators and their teams, and above all, the patients and their families. Our mission at CycloCell is to develop innovative therapies that address some of the most difficult to treat cancers. We look forward to providing further updates on our progress in the second half of the year. Operator, at this time, you may end the call.