Cyclacel Pharmaceuticals, Inc.

Good afternoon and welcome to the CycloCell Pharmaceuticals first quarter 2023 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. Please note today's call is being recorded. Lastly, if at any time during the call you should require operator assistance, please press star zero. 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 first quarter of 2023. Before turning the call over to management, I'd 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 and 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 Securities and Exchange Commission, which include, among other things, our Form 10-Q and 10-K. All of our projections and other forward-looking statements represent our judgment as of today, and CycloCell does not take any responsibility to update state 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 provide details on CycloSelf's clinical programs and Paul will provide financial highlights for the first quarter of 2023, which will be followed by a Q&A session. At this time, it's my pleasure to turn the call over to Spiro.

Thank you, Grace, and thank you, everyone, for joining us today for our quarterly business update. We are on track to deliver key data readouts over the coming months from our two clinical programs, In the FADRA 065-101 study in patients with solid tumors and lymphoma, we are enrolling at dose level 6A. Pharmacokinetic and pharmacodynamic data from this dose level suggest that we are achieving predicted target engagement levels on continuous dosing at the higher level. Choosing the optimal dose schedule is one of many parameters to increase the chance of success in Phase II. Among others, correlative analysis and translational data can confirm whether we observe drug effects, our own mechanism, together with learning on how to deal with toxicities observed in early development. At this point in the program, we feel encouraged that our clinical observations support FADRA's presumed mechanism of action. The phase two proof of concept or POC stage will consist of multiple cohorts defined by histology. We expect that cohorts may enroll at different rates. For example, it is possible that the fastest ones will be those in which we have already seen anti-cancer activity during the dose escalation stage. As previously reported, we have seen PRs and stable disease in patients with T cell lymphoma, women's cancers, including cervical, endometrial, and ovarian, and pancreatic cancer, all on FADRA monotherapy. Clinical data from this open-label POC stage will be reported as they become available. When biotech companies enter negotiations for out-licensing assets or a strategic exit, preparing the commercial drug product, or DP, is often kicked down the road to be dealt with by the next owner of the asset. Such an election can have a profoundly negative impact on valuation, as the timelines to launch become apparent to the licensee or purchaser. Mindful of these matters, the cyclosol team has been proactively investing in a tablet formulation of FADRA to replace the capsule currently used in clinical trials. A tablet VP has further advantages to capsules in terms of patient convenience and increased compliance. As a tablet VP, OFADRA has recently become available. We will treat a few patients with it within the Phrase 1 part of our ongoing 065-101 study. We will provide further updates on this project as they emerge. Let us now turn to PLOGO. In our 140-101 study, we are evaluating PLOGO in dose escalation stage as a treatment for patients with advanced solid tumors and lymphoma. We are currently dosing patients at dose level four. PLOGO has previously shown early signals of anti-cancer activity at low dose levels in patients with biliary tracts, non-small cell lung, and ovarian cancer. Our preclinical program, aiming to elucidate PLOGO's differentiated biological profile, has revealed that, alongside the inhibition of PLK1, PLOGO has also demonstrated an epigenetic mechanism of action. This property may lead to a biomarker-driven clinical study in the future. Over the coming months, we expect key data readouts from the Phase I-II studies for FADRA and PLOGO. We expect to report complete dose escalation data with FADRA, followed by initial data from the FADRA Phase II POC stage, which is expected in the second half of 2023. Dose escalation in the PLOGO study continues, and we expect to report initial data in mid to late 2023. We believe that our medicines are differentiated from other molecules in their respective class with properties which may be best in class. I will now turn the call over to Dr. Mark Kirschbaum, our chief medical officer, to provide details on recent clinical data. Mark?

Thank you, Spiro. As you heard, both the Fadraciclib and Plogacercib clinical programs are progressing well and are at important stages in their respective studies. Regarding FADRA, we are currently treating patients at dose level 6A, which is the final dose level as outlined in the 065-101 protocol. In preparation for the upcoming start of Phase 2, we are now introducing the tablet form into this dose level. Previously reported anti-cancer activity in the ongoing Phase I study should result in faster enrollment in certain tumor types. As we have reported, two out of three patients with T cell lymphoma achieved PR, including a patient with a very aggressive angioimmunoblastic form of peripheral T cell lymphoma. Eleven of 15 patients with cervical, endometrial, liver, and ovarian cancers achieved stable disease with target lesion reductions as their best response. A pancreatic patient maintains stable disease for five cycles of treatment. These are promising responses for this phase of clinical testing and may predict deeper responses in Phase 2. Speaking of the Phase 2 stage of 065101, most of our additional sites, including top sites in the U.S., Europe, and Asia, are now open. Together with our four Phase 1 sites, around 10 centers are ready to participate in the proof-of-concept stage in what will be a global study. The primary objective of the upcoming Phase II stage is to assess fibrous activity and safety in relevant tumor types. The design of this registration-directed study allows us to recruit different tumor types in discrete cohorts, each running in parallel and independent of each other. Let's now turn to our second program with Pogocertib, our oral PLK1 inhibitor, currently in 140.101, a Phase I-II study in patients with advanced solid tumors and lymphoma. Published preclinical evidence suggests that low-dose continuous administration may be an effective strategy for PLK1 inhibitors, as well as the standard high-dose pulse-type strategy. In 140.101, we have observed intriguing clinical activity at the lowest doses of Ploto given continuously. These included stable disease at dose level 1 in two patients, one with non-small cell lung cancer for eight cycles and one with ovarian cancer for five cycles, respectively, and at dose level 2 in a patient with biliary tract cancer for three cycles. We are currently enrolling at dose level 4 and have seen no SAEs thus far. We are conducting a comprehensive preclinical program to elucidate this novel mechanism of action of PLOGO and expect to report additional preclinical data later this year. What we can say at this point is that PLOGO is an active BRD4 inhibitor, and there appears to be a broader epigenetic story. 140.101 is designed to target several important tumor types, where preclinical models and biology suggest single agent activity. including colon cancer, lymphoma, and small cell lung cancer, among others. Our study is designed to efficiently evaluate both dose and schedule to optimize RP2D for the proof of concept or cohort stage of the study. We look forward to updating you as we progress our evaluation of FADRA and PLOGO. I will now turn the call over to Paul to review our first quarter and financial results.

Thank you, Mark. Last week, we announced receipt of £3.9 million, or $4.7 million, as a research and development, or R&D, tax credit from HMRC, the tax agency of the United Kingdom. The tax credit is for R&D costs incurred during the year ended December 31st, 2022, and is the amount disclosed on the income tax benefit line of the statement of operations. For the first quarter of 2023, the R&D credit is estimated at approximately $1.3 million. This R&D tax credit is an important source of non-delivered capital, and we anticipate receiving the 2023 tax credit in early 2024. Pro forma cash and cash equivalents total $16.1 million, comprised of the R&D tax credit of $4.7 million, and cash and cash equivalents as of March 31st, 2023 of $11.4 million. Cash and cash equivalents as of December 31st, 2022 was $18.3 million. Net cash used in operating activities was $6.9 million for the three months ended March 31st, 2023 compared to $6.8 million for the same period of 2022. The company estimates that its available cash will fund currently planned programs into the first quarter of 2024. R&D expenses were $5.7 million for the three months ended March 31st, 2023, as compared to $5 million for the same period in 2022. R&D expenses relating to fibercyclib were $4.1 million for the three months ended March 31st, 2023, as compared to $3.6 million for the same period in 2022 due to increased non-clinical expenditures. R&D expenses related to PLOGO were $1.4 million for the three-month standard March 31, 2023, as compared to $1.1 million for the same period in 2022 due to clinical trial costs associated with progression of the Phase 1-2 study. General and administrative expenses for the three months ended March 31st, 2023 and 22 remain relatively flat at $1.6 million. Total other income net for the three months ended March 31st, 2023 was $0.2 million compared to an income of $1.3 million of the same period of the previous year. The decrease of 1.1 million for the three months ended March 31st, 2023 is primarily related to royalty income received in the prior year. Net loss for the three months ended March 31st, 2023 was 5.8 million compared to 4.1 million for the same period in 2022. Operator, we are now ready to take questions.

At this time, if you would like to ask a question, please press the star and one on your touchtone phone. You may remove yourself from the queue at any time by pressing star two. Once again, that is star and one to ask a question. Our first question comes from Ahu Demir with Lattenberg-Fallman.

Good afternoon. Thank you for taking my question, and congrats on the development. I just have two questions. First one is on the efficacy throne. What are we expecting to see in terms of data from both FADRA and PLK1 programs in terms of number of patients? What can you tell us in terms of expectations, what we are expecting to see?

Thank you for your question. I think we should... consistently, as we have been saying for some time now, report data from the phase one study of FADRA. The sample size will be around 25 patients, assuming that enrollment continues, as we have seen up to now. We should be reporting both our recommended phase two dose decision, as well as PKA and PD analysis, in particular on the relevant protein targets from the dynamic activity, as well as some translational data that has been generated by both the company and collaborators. For PLOGO, we think the initial data set will appear toward the fourth quarter of this year, perhaps a little bit earlier, but that depends on enrollment. We're still in those level four, so a bit over halfway in the protocol, and enrollment remains robust. So it could surprise to the upside, but we think conservatively fourth quarter. Finally, we expect to report initial data from the phase two cohorts of FADRA or 65101, probably toward the end of the year. That, of course, depends on which cohorts are enrolled first. it's consistently expected that those that have seen previous activity, which has been FOMA cohorts and women's cancers, will enroll first. So these are the likely data sets we'll report this year.

Thank you, Spiro. Very helpful. My second question is on the safety front. Could you maybe comment on the safety profile of the patients you have been treating? Is there anything that's unexpected? How does it look in terms of the safety front?

I think there's a question for Mark. Mark, would you like to take this?

Yeah, sure. So we've previously disclosed we had incidents of hyperglycemia in patients who had underlying issues with sugar control in the past. Those have been well treated with insulin and other such treatments. That may be an on-target effect of the same way that it's active in patients The women's tumor is another such thing. And we had a bit of an issue with nausea, which we believe the introduction of the tablet may abrogate. In other words, the safety of this drug was even more than we anticipated, and we got the higher doses than we initially had conceived, so we were giving a lot of capsules. So now with the introduction of proper tablets, we think that will be resolved. But other than that, we have on FADRA, we have no other consistent SAEs of high grade or even low grade, frankly. And with the PLK1, the doses that we are at now, we have not seen any SAEs at all. So both drugs are doing very nice on the safety front.

Thank you, Mark. Thank you, Shapiro.

Thank you, Rahul. Thank you. As a reminder, to ask a question, please press star 1. Our next question comes from Shubhandu with SINROY with Brookline Capital Markets.

Hi, I'm Shubhandu Forkian. Regarding the 140 program, I was wondering if you could elaborate on the dosing schedule. Currently, you are in dose level four. How are you planning to escalate? Thank you.

Thank you for your question, Shubhendra. There's another one for Mark.

So overall, without getting deep into the biology and what's going on now. We're actually studying two dosing schedules at each dose at the same time, which are essentially more or less of a pulse-type schedule, which was the classic way of giving these drugs. But the new science seems to suggest that low-dose continuous treatment may be even more efficacious, as we've mentioned. So this science is being confirmed in a lot of ways. And we believe that this may provide a more, you know, a good way of treating multiple tumor types in a safe way. So these are the, we escalate both of these in an alternate fashion as we go into higher doses of the drug.

Okay, thank you. And with 140, what are your thoughts about, you know, maybe possible combinations with target therapies like RAS, RAS inhibition, or maybe even immunotherapies?

Again, that's a question for Mark, please.

Yeah. I believe that's an excellent question. It's a little early to disclose all that. I can tell you that we're aggressively pursuing all of these fronts in our preclinical work. So we have a very deep profile of preclinical work with some major investigators looking at many of these possibilities. All I'll say is that what we're able to do with this low-dose continuous dosing is really sensitize a lot of types of therapy without incurring the severe toxicity that we're seeing at high doses in the way that the drug was given in the past.

Thank you, Mark. Perhaps I could add some further color to Mark's commentary. In one of the cases that we are examining combinatorial strategies with Plogacertib, the drugs that we're combining with her are in an approved class, but they're known to have severe toxicity limitations. So given exactly what Mark explained of having a very safe compound at those levels, that gives us a lot of degrees of freedom to combine with, possibly even address, some of the toxicities of the approved drug by titrating. So we are optimistic at this stage, but of course we need to, first of all, prosecute our strategy, which is to find whether 1,4-Tib or Gossetib has single-agent activity. As you may recall, Shibendo, this could lead us potentially to registration strategy rather efficiently. If not, then combinations would become the order of development. But these things need to happen in that order, not simultaneously.

Very useful. Thank you so much.

Thank you, Fernando. Thank you. At this time, there are no further questions in queue. I'll turn the call back over to Mr. Rambotis for any additional or closing remarks.

Thank you very much, Operator, and thanks to all of you for joining Cyclotel's first quarter earnings call. Both our programs are approaching important catalysts with a strong competitive profile in the respective classes. As a reminder, our upcoming key milestones for 2023 are report final data from dose escalation stage and RP2D determination from the 065-101 study of oral FADRA in patients with advanced solid tumors and lymphoma. First patient dosed with Oral FADRA in Phase II proof of concept stage of O6-5-101 study in patients with advanced solid tumors and lymphoma. Report Phase I data from 140-101 study of Oroplogo in patients with advanced solid tumors and lymphoma and reports interim data from initial cohorts in Phase II proof-of-concept stage of OSITS-5-101 study of oral FADRA in patients with advanced solid tumors and lymphoma. We look forward to providing you with further updates and hope to meet some of you at upcoming conferences. Operator, at this time, you may end the call.

This concludes today's call. Thank you for your participation. You may disconnect at any time.