Cyclacel Pharmaceuticals Inc (CYCC) 2009 Q1 法說會逐字稿

Good afternoon. I will be your conference operator today. At this time, I would like to welcome everyone to the Cyclacel first quarter 2009 earnings conference call. (Operator Instructions). I would now like to turn the conference over to Mr. Corey Sohmer from Cyclacel. Sir, you may again.

Thank you, operator. On the call today are Spiro Rombotis, President and CEO of Cyclacel Pharmaceuticals, Paul Mcbarron, Executive President Finance and Chief Operating Officer, and Dr. Judy Chiao, Vice President Clinical Development and Regulatory Affairs. Before we turn the call over to Spiro, I will read the Company's Safe Harbor Statement. Some of the information on this call may contain forward-looking statements, within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 about financial results and estimates, business strategy, clinical trial plans, and research and development programs of Cyclacel Pharmaceuticals, Inc.

By their nature, forward-looking statements and forecasts involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. A number of factors could cause actual results and developments to differ materially, and are discussed under risk factors in the registration statement on Form 10-K and in other reports of Cyclacel filed with the SEC. The information in this presentation is current as of this date. Cyclacel does not take any responsibility to update such information. At this time, I would like to turn the call over to Spiro Rombotis.

Thank you, Corey. And thank you in the audience for joining us on our quarterly call today. In addition, to the information provided in this afternoon's press release. We will highlight certain milestones that we achieved in the first quarter of 2009. We will also outline the focus of Cyclacel's activities in the coming months centered on our goal of advancing Sapacitabine to a federal trial within 2009 for the treatment of elderly patients with AML. We have often stated in the past, our vision of developing Sapacitabine as potentially the first oral agent for the treatment of elderly patients with AML. We are on track to achieve this goal and potentially change the treatment experience of elderly patients diagnosed with acute myeloid leukemia. As you are aware, we rapidly enrolled 60 patients in the AML stratum of our ongoing Phase 2 study in 2008, approximately three months ahead of schedule. We said then that there was strong demand from investigators to put additional patients on study.

Based on this demand and interim data available at that time, we expanded two arms in the AML stratum to further define safety and efficacy of Sapacitabine treatment. The expansion enrolled rapidly an additional 45 patients during the first four months of 2009. In total, 105 elderly patients have now been treated in the Phase 2 AML stratum. Following our FDA meeting this past January, we disclosed that our proposed pivotal trial plan is to treat approximately 100 elderly patients with AML in an open label single arm design. Consistent with our clinical development plan, our meeting with FDA and data from the Phase 2 study, we have selected one of the three dosing schedules for a pivotal trial, pending FDA agreements on the trial design. If the results of our pivotal study are positive, they may serve as the basis of an NDA filing in 2010, and may support expanded investigation of Sapacitabine in additional indications.

We announced previously that we will present updated interim efficacy and safety data from our Phase 2 randomized trial in patients with elderly AML or MDS at the conference on May 29th. The ASCO report will include data from nearly all of the 105 elderly patients with AML, and from 29 out of more than 30 older patients randomized in the MDS stratum. As previously reported, we have observed complete remissions or CR's at all dosing schedules tested. We have been encouraged by the duration of these CR's and the duration of time that patients stay on Sapacitabine treatment. In addition to the ASCO data, we (inaudible) on the primary end points of one year survival from the 60 AML patients treated in 2008 in the fourth quarter of 2009, or one year after the last patient was randomized and began treatment with Sapacitabine.

As you will recall, we are exploring additional indications with Sapacitabine. We continue to enroll a Phase 2 dose escalating study of Sapacitabine in non-small cell lung cancer in patients who have had at least one prior chemotherapy. We have also begun a Phase 1 combination trial of Sapacitabine and Seliciclib, two of our oral drugs, in patients with advanced cancers. The rational for this constituency was provided by observations of synergy between our two agents into clinical models, and (inaudible) evidence (inaudible) of a particular rational supporting a combination of a nucleoside analog, such as Sapacitabine and an inhibiter such as Seliciclib. In the Phase 2 study in patients with cutaneous T-cell lymphoma or CTCL, we have observed partial responses or PR's in 3 out of 16 patients enrolled in different dosing schedules. Although this is encouraging data, we will close this study to conserve resources.

We would like to thank our clinical investigators, their staff and patients for their support which brought us to the verge of beginning a pivotal trial for Sapacitabine. Turning to our other programs, at ASCO, we will also present updated safety and efficacy data from the leading portion of our ongoing Phase 2 trial of Seliciclib in 23 patients with nasopharyngeal carcinoma and other cancers. We announced today that we intend to seek a partnership for further (inaudible) development of Seliciclib in nasopharyngeal cancer.

We also expect a read out in the second half of the year from the appraised Phase 2 B trial with Seliciclib in patients with non-small cell lung cancer treated with at least two prior therapies. Turning to our Phase 1 study of CYC116, our Aurora A and B and VEGFR2 inhibiter, we expect to shortly complete and close this study in patients with solid tumors. At this point, I will turn the call over to Paul Mcbarron for a brief review of our financial performance. Paul.

Thank you, Spiro. For the first quarter of 2009, we reported a net loss of $5.1 million or $0.25 per share, compared to a net loss for the first quarter of 2008 of $6.3 million or $0.31 per share. Total research and development expenses in the first quarter of 2009 were $3.1 million, compared to $5.9 million in the first quarter of 2008.

The decrease of approximately $2.8 million was related to research and development programs, other than Sapacitabine as a result of the September 2008 work force and expenditure reductions. And we expect to benefit from these and other cost savings throughout 2009. Total selling general and administrative expenses amount to $2.2 million for the first quarter of 2009, as compared to $3.8 million in the first quarter of 2008, with the decrease primarily attributable to reduction in administration costs, as well as charges related to stock-based compensation. For the first quarter of 2009, we recorded $216,000 of net product sales of Xclair and Numoisyn, an increase of 31% as compared to 2008 net product sales of $165,000. Turning to cash and cash equivalents, this totaled $20.4 million at March 31, 2009. And we expect our existing cash resources will be sufficient to fund operations under current spending assumptions into the second quarter of 2010. I will now hand the call back to the operator.

Thank you. (Operator Instructions). Your first question is from the line of Terrance Flynn with Lazard Capital Markets.

Hi, thanks for taking the question. First, can you tell us what dosing schedule you're going to go forward with in the pivotal trial for AML?

Terrance, good afternoon. I'm afraid this information is in the ASCO data, and per ASCO guidelines, we are not in a position to disclose ahead of the meeting, but it will be quite evident in the presentation what the dose that we have selected will be.

Okay. And can you tell us, was there any kind of dose response in terms of the complete response rate that you're seeing?

I'll ask Dr. Chiao to answer this. Judy?

Well, one has to realize that this is a small randomized Phase 2 studies, and the numbers are small that a comparison in a meaningful statistic way is not possible, the nominal way that you will see that if you look at the end point of responses, which is complete remissions and other parameters, that are typically used to assess anti-leukemia patients, one can see that the three schedules all have activities, whether you can draw any conclusion of those response, I don't think it's possible given the small sample size, in a definitive way.

I could also add to Judy's comment that, to remind the audience, these are two schedules over a seven-day period, one week on, two weeks off. And a third schedule which is over a three-day period, two weeks on, one week off. So it's really kind of hard to suggest that those response given the different schedules.

Okay. Great. And can maybe you update us on your thoughts in terms of just end points that you might want to use for the pivotal trials for AML?

Yes. Again, at this point we can only speak very generally about precedent, as I think everybody who has been following the AML space will recognize, the FDA has been accepting complete remissions and complete remissions without later recovery, as the current standard for submissions of this type, i.e. single arm studies as we have disclosed we intend to pursue. That's perhaps all we should say at this point, until such time it later becomes available at ASCO, at which point perhaps we can have a more extended discussion about additional end points.

Okay, thanks a lot.

You're welcome.

(Operator Instructions)

Your next question is from the line of Mark Monane with Needham.

Good afternoon, thanks for the review. A couple of questions persist. Did you go over, Spiro, the actual timing of the pivotal trial?

We have not, Mark, gone over the timing yet. We still said in the press release, we would like to have the data come out first, and then will outline our rationale for the study, sample size assumptions, and how long will that take. I should also remind you and the other members of the audience that this is still pending further confirmation with the FDA.

Were there any biomarkers or clinical characteristics of patients that seem to make them better candidates for Sapacitabine, and is it possible then to enrich such a trial with these patients in the pivotal testing?

Judy?

I don't think we have any markers to select the patient for nucleoside analog type of therapy. I think clinically that we have certainly seen responses, because you recall that our study is a little bit different, it not only includes previously untreated AML patients, it also include first relapse, and we certainly have seen responses in both categories.

That was helpful and then on MDS, can you go over what outcomes you're looking for? The MDS guidelines are quite big. Is there a certain clinical characteristic, or clinical symptom that seems to respond best to Sapacitabine? How will we know how well the drug is working in this population?

Well, I think typically in MDS patient and recall that we enroll patients who have failed hypomethylating agent, and some of them have failed actually both of the hypomethylating agents. And what we have been looking for again, the MD stratum and AML stratum, primary efficacy endpoint is when you survival, and which is not mature, as you know, because we haven't hit the appropriate follow-up. And then we look at the responses, that will be the typical responses that you have seen in the international working group criteria, what we call IWT criteria, and we're looking for remissions and partial remissions, and major hematological improvement in the counts.

Very good. This is Glenn. I have a couple much financial questions. The first is I notice you had decreased your costs in your SG&A and do you expect those to continue at your -- the current rate and what do you think the burn rate will be for 2009?

Thanks for that. So as we said, we expect our cash to run into the second quarter of 2010. The trend on the SG&A line, I would anticipate running similar to this quarter, Glenn.

Thank you. And I noticed you also saved money on suspending your dividend for the preferred shares. Could you remind us how many preferreds you have outstanding, and what was the historical payment you expect to save a year?

So the dividend payment is a 6% coupon, and it's $1.2 million per year on $2.4 million preferred that's outstanding.

Well, thank you very much for the added information.

Thank you.

Thank you, Mark. Thank you, Glenn.

(Operator Instructions). There are no further questions at this time.

Thank you, operator. And I want to thank everybody for participating in this afternoon's call, and our review of today's quarterly earnings announcement. We'll look forward to seeing many of you at ASCO, and our investor event at 6:30 on May 29th following the presentation of the data, and the oral discussion of the presentation, and provide you in due course with more details on our pivotal trial plan for Sapacitabine. Operator, at this time please end the call.

Thank you, all, for participating in today's Cyclacel first quarter 2009 earnings conference call. You may now disconnect.