Cyclacel Pharmaceuticals, Inc.

Good afternoon and welcome to the Sly Cassell Pharmaceuticals third 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. 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. Please go ahead.

Good afternoon, everyone, and thank you for joining today's conference call to discuss Eccles Health's financial results and business highlights for the third quarter of 2023. 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 Securities and Exchange Commission, which include, among other things, our Forms 10-Q and 10-K. All of our projections and other forward-looking statements represent our judgment as of today, and Psychosauce does not take any responsibility to update such information. With us today are Spira Lombatis, 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. Biro will begin with an overview of our business strategy and progress. Mark will provide details on psychosocial clinical programs, and then Paul will provide financial highlights for the third quarter of 2023, which will be followed by a Q&A session. At this time, I would like to turn the call over to Biro.

Thank you, Grace, and thank you, everyone, for joining us today for our quarterly business update. Both our clinical stage cell cycle programs with FADRA CycliBor FADRA and Plogocertib, or Plogo, are progressing well. We expect to shortly report complete dose escalation data with FADRA and determination of the recommended Phase II dose, or RP2D, to be used in subsequent studies. We also expect to report interim dose escalation data from the PLOGO study and disclose preclinical data supporting its novel epigenetic mechanism. Both FADRA and PLOGO have demonstrated single-agent anticancer activity. With oral FADRA, we have observed complete response, partial response, and stable disease in patients across a number of solid tumors and lymphoma with good tolerability. With oral PROGO, we have seen stable disease in several patients with various solid tumors at low dosing levels, which is novel for this class of medicines. We believe that based on the innovative properties and demonstrated clinical activity, both FADRA and PLOGO have the potential to be best in class in their respective classes. Based on encouraging results in the FADRA program, we have implemented a capsule-to-tablet switch with patients now receiving the more convenient tablet form of the drug. We expect that the tablet is more convenient for patients and reduces the burden of taking many capsules by mouth. As the tablet would ultimately be used in a commercial put-up of FADRA if it reaches the market, the switch also represents strategic value to an acquirer or licensee. At the present time, small-cap biotech companies are not in favor by the investment community. However, the CycloCell team has been hard at work building pharmaceutical value for the long term. This is attested by the enthusiasm demonstrated by our clinical investigators across the globe and their interest in doing the clinical work and offering our medicines as clinical trial options to patients in their care. By developing two innovative, high-value medicines, both of which were discovered by CycloCell, we hope to offer our stockholders the opportunity to realize strategic value. I will now turn the call over to Mark to review our progress in the FADRA and PLOGO studies and discuss some of the clinical results. Mark?

Thank you, Spiro. In the 065-101 Phase 1-2 study with FADRA, we have enrolled 26 patients so far. FADRA has been well-tolerated, and anti-cancer activity has been observed, including PR in 2 out of 3 T-cell lymphoma patients, treated, and stable disease in 15 solid tumor patients. Of these 15 patients, 4 out of 4 had gynecological cancer, including endometrial, ovarian, and cervical, 2 out of 2 cholangiocarcinoma or biliary tract cancers, 2 out of 2 hepatocellular, 2 out of 2 prostate, 1 out of 2 head and neck, 1 out of 1 pancreatic, and 1 out of 1 colorectal cancer. PADRA has a unique activity profile, inhibiting both CDK2 and CDK9, which together complement one another. compared to either CDK2 or CDK9 alone. We have been able to maintain continuous inhibitory pressure on the tumor cells with twice daily dosing, five days a week, without immunologic toxicity at the current dose level. We are one patient away from completing dose escalation segment of the study and expect to declare the RP2D shortly. We are also studying the PK and PD results and have identified mutational and molecular patterns on NGS and RNA-seq that may be predictive of clinical activity. This exciting data may guide patient selection for the Phase II segment of the study. The mutational profile we identified is frequently observed in many large tumor populations. The design of the 065-101 study provides for a rapid transition to Phase II and the opportunity for multiple catalysts through 2024, leading to registration pathways. As a reminder, the protocol provides for seven independent cohorts by tumor type and an eighth basket cohort defined by relevant biomarkers. We have added major clinical sites in the U.S. and one more overseas to our current Phase I sites in order to rapidly achieve our enrollment objectives. Let us now turn to our PLK1 inhibitor program. We are very excited that PLOGO has emerged as a new oral PLK1 inhibitor with novel epigenetic activity when given continuously at low doses. In our 140-101 study, we are evaluating PLOGO in escalating doses as a treatment for patients with advanced solid tumors and lymphomas. We have enrolled 14 patients so far, currently enrolling dose level 5. In dose levels 1 through 5, PLOGO is administered once daily by mouth for five consecutive days, either for two weeks out of three or three weeks out of three. With this novel dosing approach, we have observed anti-cancer activity in patients with biliary tract, non-small cell lung, ovarian, and other tumor types with no drug-related SAEs thus far. In our preclinical program, we have identified that PLOGO acts through a novel epigenetic mechanism, This epigenetic activity may have a crucial role in the presence of certain common tumor mutations. Patients carrying these mutations are frequent in several large tumor populations. Following these findings, we have entered into scientific collaborations with major global research centers to help further characterize this novel activity of Clogo and define the tumor subsets that will benefit the most from this approach. As additional data corroborate these findings, we may enroll in the future, possibly as an expansion of our current Phase 1-2 study, one or more patient cohorts specifically selected on the basis of such biomarkers. I will now turn the call over to Paul to review our second quarter and financial results.

Thank you, Mark. As of September 30th, 2023, cash equivalents totaled $5.9 million, compared to $18.3 million as of December 31, 2022. Net cash used in operating activities was $12.2 million for the nine months ended September 30, 2023, compared to $15.7 million for the same period of 2022. The company estimates that its available cash will fund currently planned programs through the end of 2023. The operating plan includes discretionary expenditures, which if not incurred and taken together with the anticipated receipt of research and development tax credits of approximately $3.1 million in the first quarter of 2024, could extend available cash into the second quarter. Research and development, or R&D expenses, were $5.2 million for the three months ended September 30th, 2023, as compared to $4.4 million for the same period in 2022. R&D expenses relating to FANDRA were $3.6 million for the three months ended September 30th, 2023, as compared to $2.5 million for the same period in 2022, due to increased costs associated with manufacturer scale-up and introduction of the tablet form. R&D expenses related to PLOGO were $1.5 million for the three months ended September 30th, 2023, as compared to $1.7 million for the same period in 2022. General and administrative expenses for the three months ended September 30th, 2023 were $1.6 million, as compared to $2.1 million for the same period in 2022, due to non-recurring professional fees of 0.4 million last year. Total other income net for the three months ended September 30th, 2023 was 0.1 million compared to an income of 0.4 million for the same period of the previous year. United Kingdom research and development tax credits for the three months ended September 30th, 2023 were 0.6 million compared to 1 million for the same period of the previous year. The decrease is due to legislative changes that took effect in April 2023, which reduced the amount of tax credit which could be claimed. The R&D tax credits are directly correlated to qualifying research and development expenditure. Net loss for the three months ended September 30th, 2023 was 6.1 million compared to 5.1 million for the same period in 2022. Operator. We're now ready to take questions.

Thank you. At this time, if you would like to ask a question, please press the star key followed by the 1 key on your telephone. You may remove yourself from the queue at any time by pressing star 2. Once again, that is star 1 to ask a question. We will pause for a moment to allow questions to queue. And that is star 1. Our first question comes from Ahu Peneer, Leidenberg-Thalmann.

Good evening. Thank you so much for taking my questions. I have three questions. First one is regarding the biomarker studies What type of biomarkers? Are they novel targets or are they known biomarkers that we have seen before? And when do you plan to disclose and report on the biomarker studies?

Thank you for your question, Ahu. These are known biomarkers in terms of appearance on next-gen sequencing scans and path reports and so forth. However, they are novel for the CDK class. We believe we've made a discovery that has not been reported previously for this class, and we think that there is sufficient clinical support for this hypothesis to be pursued further in the clinic. Disclosure should occur, as we said, when we give the full Phase I update. We're obviously hoping to present this data at upcoming medical meetings, and that would be important as far as deadlines are concerned as to when we'll make the announcement. But I would expect probably around the end of the year or early next year.

Thank you, Spiro. My second question is on the PLOGO program. We know the epigenetic aspect is very unique, unlike any other PLK inhibitors. I am curious, given that you already dozed 12 patients, what type of activity do you observe? Is there anything that's so unique that you see activity in certain indications, given the epigenetic agent targeting? So just curious on the clinical activity.

Yes, I think this is a question for Mark, who's also an expert on epigenetics. Mark?

Well, some of it is still... A little early to disclose, but, you know, we have been seeing at these low dose levels, you know, very prolonged stable disease and a number of very bad tumors. So, you know, that led the search for the mechanism of why this would be happening at these low doses. And it turns out to be a really interesting story. I think there'll be some abstracts and some things in the near future. And as Spira said, at the disclosure times, we'll reveal all of that.

Sounds good. Thanks, Mark. And my last question is on the financial poll. It looks like there's an increase, as you pointed out, given the manufacturing and the clinical activities. So curious, how much increase are we expecting in the next quarter? Is the manufacturing going to continue to increase? So how should we model forecasts?

No, exactly, Ahu. Thanks for the question. So the manufacturing cost was, as Sparrow mentioned, as we move from a capsule form to the tablet form. So that was the active ingredient manufacturing, which happened in Q3. So that should decline in Q4.

Okay. Thank you so much. Thanks for answering my questions.

You're welcome. Thank you. Just a reminder, to ask a question, please press star and 1 on your telephone keypad. Our next question comes from Jonathan Ashtoff, Roth MKM.

Thank you. Hi, guys. I was wondering if you could say anything about the FADRA cyclic strategic options that you're looking at. Can you give us...

any clarity there as to the level of interest or you know what's a real gating factor to move you know a conversation forward from where it is now thank you jonathan this is a topic we have discussed before in these calls there is strategic interest in next gen cdks and federal city in particular this interest comes from multiple parties at different points in time we have different hurdle rates I think the disclosure in the very near future of the biomarkers, as I mentioned to the previous questioner, is an important catalyst that will bring home much of our interest, which was preliminary. But now I think we have not only evidence of single agent activity, including CRPR and stable disease, but we also know now possibly which patient population to target future trials. So I would expect that this would catalyze further strategic interest, and we look forward to continue those discussions with relevant parties.

Also, lastly, you don't want to tell us if you're finishing off the Phase I FADRA at dose 5 or 6A, right? That's the question.

Well, I think it's a question for Mark, and then I can come back and give you a bit more color. But Mark, why don't you take that? What's your guess about the RP2D?

Well, you know, we're one patient away from finishing 6A, so I'm hoping that that will be it. That will be it. The day looks very good. We have shown it. It seems to be doing what we want at those levels, so I'm hoping that this last session will conclude and we'll be able to formally announce.

But until then, we don't know. Okay. And, Mark, there's nothing telling you that you need to do any sort of slightly different dosing schedule, correct?

No. No, we're very happy, you know, as it stands right now. You know, we can't say anything until it is complete. All right. Thank you very much.

Thank you, Jonathan.

Again, if you would like to ask a question, please press star 1 now. We have no further questions in the queue at this time. I would now like to turn the call back over to the company for closing remarks.

Thank you, operator, and thanks to all of you for joining Cyclas Health's third quarter earnings call. Both our programs are approaching important catalysts, such as starting phase two proof of concept stage with a strong competitive profile in the therapeutic classes. As a reminder, our upcoming key milestones 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 2 stage of 065-101 study in patients with advanced solid tumors and lymphoma. Report Phase I data from 140-101 study of oral clobocytid in patients with advanced solid tumor stem lymphoma and elaborate the novel mechanism of action of clobo. 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 does conclude today's program. Thank you for your participation.