Cyclacel Pharmaceuticals, Inc.

Good afternoon and welcome to the Psychocell Pharmaceuticals fourth quarter and full year 2023 earnings 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 the 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 Cyclasel's financial results and business highlights to the fourth quarter and financial year ended December 31st, 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 Cyclone South does not take any responsibility to update such information. With us today are Ciro Lombatis, President and Chief Executive Officer. Paul MacDarren, Executive Vice President, Finance and Chief Operating Officer. And Dr. Brian Schwartz, Chief Medical Officer. Zero will begin with an overview of our business strategy and progress. Brian will provide details on PsychoSelf clinical programs, and then Paul will provide financial highlights for the fourth quarter in full year 2023, which will be followed by a Q&A session. At this time, I'd like to turn the call over to Spiro.

Thank you, Grace, and thank you, everyone, for joining us today for our fourth quarter and full year 2023 business update. We are delighted to be joined on today's call by Dr. Brian Schwartz, who has recently joined CycloCell as Chief Medical Officer. Many of you may know Brian when he was CMO at RQ prior to the acquisition by Merck in 2020, at which time he joined our board of directors. He has extensive clinical and product development experience, which will be instrumental in guiding our team to deliver key value inflection milestones. We are pleased to report on the progress of Hydrocyclet our CDK2 and 9 inhibitor, or FADRA for short. Having recently discovered a potential precision medicine approach for FADRA, we have determined the recommended phase 2 dose, or RP2D, and are ready to start the phase 2 proof-of-concept part of our 065-101 study. Taken together, our clinical and preclinical data suggest the hypothesis that patients with one or more chromosomal abnormalities, including CDKN2A, CDKN2B, and or MTAP, including deep deletions or loss of function, may be sensitive to FADRA. In this part, We will evaluate patient cohorts selected for their mutation or profile and or Phase I activity in various solid tumors and lymphoma. We will initially focus on two patient cohorts with CDKN2A and or CDKN2B abnormalities and T-cell lymphoma, from both of which we saw Phase I signals of activity, including responses. We believe that there is great unmet medical need and industry interest in the cancer patient populations identified by these abnormalities, which are closely located on chromosome 9 and are often co-deleted. TBKN2A gene deletions occur in several solid tumors, including bladder, breast, endometrial, esophageal, glioma, head and neck, hepatobiliary, lung, including squamous, melanoma, ovarian, pancreatic, and also in certain T-cell lymphomas. CDKN2B deletions occur in several solid tumors, including bladder, breast, cholangiocarcinoma, endometrial, esophageal, glioma, head and neck, hepatobiliary, lung, including squamous and mesothelioma, melanoma, pancreatic, and others. As mentioned in our press release, we expect two key data readouts for FADRA this year. final data from the dose escalation part of the O6-5-101 study at a major medical conference, and later on, initial clinical activity from the Phase II proof of concept part. Also, at the upcoming AACR 2024 meeting, independent investigators will present the clinical proof of concept data for FADRA in various tumor types. I will now turn the call over to Brian to review our progress in the FADRA and PLOGO studies and discuss some of our clinical results. Brian?

Thank you, Spiro. We have dosed 47 patients in the dose escalation part of the FADRA 065-101 study, of which 33 are evaluable for efficacy. We have completed dose escalation and based on preclinical and clinical data have determined that dose level five or 100 milligrams BID dosed five days per week in a four week cycle will be our recommended phase two dose or RP2D. No dose limiting toxicities have been observed at this dose level. We have also observed CDKN2A or B alterations, including loss of function in multiple pre-treated Phase I patients with various cancers, including gynecological, hepatobiliary, lung, and pancreatic, who have benefited from phagocyclic monotherapy. These patient groups are associated with a high unmet medical need and often have poor clinical outcomes. An illustration of this is we were excited to see shrinkage of 22% in the sum of all target lesions after one cycle of oral fraud recycler in a squamous non-small cell lung cancer patient with CDKN2B deletion refractory to standard of care chemotherapy, and immunotherapy. After retrospectively analyzing a subset of previously treated Phase I patients who experienced clinical benefit with FODRA, we found an additional five patients with CDKN2A or CDKN2B alterations. These included an endometrial cancer patient, who achieved a CR and over three years on treatment in a previous study with IV FADRA monotherapy and was found to have CDKN2A, CDKN2B, and NTAP loss. We are also encouraged by phase one anti-cancer activity observed in our T cell lymphoma patients, including PRs in two out of three patients. A cohort in the part two of the O65-101 will evaluate patients with T cell lymphoma. Although the phase one hypothesis generating data are limited and cannot be generalized, we believe patients with these cancer types should be evaluated in the phase two proof of concept part of the study. Initially, we expect to enroll 10 to 12 patients in each of the two cohorts with CDKN 2A or B alterations and T cell lymphoma. We estimate that approximately eight sites will take part in the phase two and have completed several site initiation visits so we can quickly start enrollment and deliver results by the second half of 2024. Let me now make a few remarks on our second program, Plogo Certain, or Plogo. In the 140-101 dose escalation study of Plogo, we have enrolled 15 patients with good tolerability so far. Although we observed early evidence of anti-cancer activity in multiple patients, preclinical and clinical data suggest that the optimum dosing may be achieved with an alternative salt formulation of PLOGO, which has been under development. Additionally, independent groups have shown that certain ARID1A or SMARCCA mutated cancers may benefit from treatment with PLOGO. ARID and other mutations are found in several cancers, including bladder, endometrial, esophageal, hepatobiliary, and colorectal. For these reasons, we have chosen to pause 140-101 study with a current formulation and resume dose escalation once the new formulation becomes available. Following assessment of bioavailability in patients, we will now be taking into account potential selection biomarkers for patients enrolling in 140-101 study. I will now turn the call over to Paul to review the fourth quarter and full year results.

Thank you, Brian. As of December 31st, 2023, pro forma cash and cash equivalents total $6.3 million, including $2.9 million of United Kingdom research and development tax credits received after the end of the year. Cash and cash equivalents as of December 31st, 2023 total $3.4 million, compared to $18.4 million as of December 31st, 2022. Net cash used in operating activities was $16.1 million for the 12 months ended December 31st, 2023, compared to $20.8 million for the same period of 2022. The company estimates that its available cash, including the United Kingdom research and development tax credit received of $2.9 million, will fund currently planned programs into the second quarter of 2024. Research and development, or R&D, expenses were $3.5 million and $19.2 million for the three months and year ended December 31, 2023, as compared to $6.7 million and $20.3 million for the same period in 2022. R&D expenses relating to FADRA were $2.7 million and $13.4 million for the three-month year ended December 31, 2023, as compared to $5.3 and $14 million for the same period in 2022. Due to a decrease in clinical trial costs, offset by an increase in manufacturing and other non-clinical expenditures. R&D expenses related to PLOGO were $0.7 million and $5 million for the three months and year ended December 31st, 2023, as compared to $1.3 million and $5.5 million for the same period in 2022, due to decrease in manufacturing and other non-clinical expenditures. General and administrative expenses for the three months and year ended December 31st, 2023 were 1.9 million and 6.7 million compared to 2.1 and 7.4 million for the same period of the previous year due to a decrease in professional fees. Total other income net for the three months and year ended December 31st, 2023 were an expense of 0.3 million and an expense of 0.1 million compared to an expense of 0.2 million and income of 1.7 million for the same period of the previous year. The decrease of 1.8 million for the year ended December 31st, 2023 is primarily related to royalty income received in the previous year. United Kingdom research and development tax credits for the three months and year ended December 31st, 2023 were 0.4 million and 3 million. compared to 1.6 million and 4.7 million for the same period of the previous year, and are directly correlated to qualifying research and development expenditure. Net loss for the three months and year-end of December 31st, 2023 was 5.3 million and 22.6 million, including stock-based compensation expense of 0.3 and 1.5 million respectively, compared to 7.4 million and 21.2 million including, again, stock-based compensation expense of $0.3 million and $1.5 million, respectively, for the same period in 2022. Operator, we are now ready to take questions.

Thank you, sir. At this time, if you would like to ask a question, please press the star and 1 on your telephone keypad. 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. Our first question comes from Agu Demir with Leidenberg Thalmann.

Good afternoon. Thanks for taking my questions. And Brian, welcome back. Great to see you back on the operational seat. I have two questions. First one is on the FADRA program. You have two major data readouts you mentioned. For the phase one portion of the data readout, are you going to disclose any of the PD biomarker data, including CDKN2A and B or others? That's my first question.

Okay, thank you very much for your question. Our only answer is yes. We intend to disclose pharmacogenetic PD data in a mid-medical meeting. As we have heard in the remarks and the press release, we have six patients that have the specific genotype. We're very encouraged because these are the best patients as far as response. So there's clearly a possibility of generating this, and we'll share more with our investors when the conference comes.

Understood. My second question is on the PLOGO formulation. As the clinical studies are currently not ongoing, then do you think the formulation efforts will be completed? And then do you think you will resume the clinical efforts? And also, when are we going to see the clinical data from this program?

We'll ask Paul, who's in charge of our manufacturing effort, to comment on the first question. I will discuss the second one. Paul, over to you.

Yeah, the formulation, the new oral formulation of Plagocetib is ongoing. We've been doing it for a short while. So we'd anticipate about six months to complete that process, Arhut.

As far as clinical data, the second part of your question is around all 15 patients seeing clinical benefit and feeling tumor shrinkage and long-standing disease in five of those patients. We need to be sure we can get to targeting even levels. If we have the backup formulation or the alternative salt, which gave us much higher exposures, we obviously need to go with that. That's the reason we decided to pause the program in favor of improving the alcohol kinetics.

Thank you.

Our next question comes from Kemp Dolliver with Brookline Capital Markets.

Thank you. So the press release and your transcript refers to the cash runway going into Second quarter, which, as you know, is a short period of time away. So two questions related to that. How far into the second quarter can you continue operating? And then which of the milestones can you achieve between now and then?

Thank you, Jim. We can go into April of 2024, as we said. One can imagine that this process is underway, as far as raising additional funds, as well as considering other options for the strategic fund. As far as most of us are concerned, we expect to begin our work on our Phase 2 program. There are pieces already lined up who could go either into the current Phase 1, or go into Phase II. As I recently declared RP2D, we can begin enrolling in Phase II. And when we see the abstracts from a major medical meeting in the middle of the year, which historically come out a month before, so we start to see those around the same time frame. This will contain the Phase I data, the full Phase I data, including some detail on pharmacodynamic profiles of patients. That's not all of them because the cutoff was in winter. We expect to have some of that data in the public domain within this timeframe.

Great. Thank you.

Thank you, Captain. We have no further questions at this time. I would now like to turn the call back over to the company for any additional or closing remarks.

Thanks, operator, and thanks to all of you for joining Cyclas Health's first quarter and full year 2023 earnings call. However, Cyclas has achieved a key milestone in ready to start phase two of the concept stage, with important catalysts anticipated in 2024 and a strong competitive profile in its therapeutic class. As a reminder, our upcoming key milestones are first patient dose with oral fungricycline in Phase II for the onset part of O6-5-101 study in patients with advanced atomic tumors and lymphoma. Report final data. from dose escalation stage from O65-101 study of oral hydrocycline in patients with advanced solid tumors and lymphoma. Report interim data from initial cohort in phase two open label proof of concept part O65-101 study with oral hydrocycline in patients with advanced solid tumors and lymphoma. and independent investigators to report the clinical proof-of-concept data for flundersyclib at the American Association of Cancer Research, or AACR, annual meeting 2024. We look forward to providing you with further updates and hope to meet some of you at conferences. I hope that at this time, you may end the call.

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