Cyclacel Pharmaceuticals Inc (CYCC) 2016 Q4 法說會逐字稿

Good afternoon, and welcome to the Cyclacel Pharmaceuticals Fourth Quarter and Full Year 2016 Results Conference Call and Webcast.

Today's call is being recorded.

(Operator Instructions) The company will also be accepting a limited number of questions submitted via e-mail to the address ir@cyclacel.com.

It is now my pleasure to turn the floor over to the company.

Thank you.

Good afternoon, everyone, and thank you for joining our conference call to discuss Cyclacel's fourth quarter and full year results and business highlights for the fourth -- for the quarter ended December 31, 2016.

Before turning the call over to senior management, I would like to remind everyone that during this conference call, any 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 the 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 forms 10-Q and 10-K.

These filings are available from the SEC or our website.

All of our projections and other forward-looking statements represent our judgment as of today, and Cyclacel does not undertake any responsibility to update such information.

With us today are Spiro Rombotis, President and Chief Executive Officer; Paul McBarron, Executive Vice President, Finance, and Chief Operating Officer; and Dr. Judy Chiao, Vice President of Clinical Development and Regulatory Affairs.

At this time, I would like to turn the call over to Spiro Rombotis, Cyclacel's President and CEO.

Spiro?

Thank you, Alex, and good afternoon, everyone.

On today's call, we will provide our year-end business update and review progress on our clinical programs.

In February, we announced the outcome of the SEAMLESS study and held a conference call to provide further details.

Following the outcome and after an in-depth review of our clinical development pipeline, we announced that we will concentrate our resources on our transcriptional regulation and DNA damage response clinical-stage programs.

While we will discuss SEAMLESS data with regulators after completing ongoing analyses, we are looking ahead with a clear strategy.

We are concentrating our resources and efforts on progressing CYC065, our CDK inhibitor, in our transcriptional regulation program and in our DNA damage response program our sapacitabine and CDK inhibitor regimen in BRCA or BRCA-positive patients with various cancers.

At this point, it is worthwhile mentioning that we are encouraged by the support received from various stakeholders, the recent success of commercial-stage CDK inhibitors and early clinical data from our own CDK inhibitor trials.

Before handing over the call to Paul to take us through the financials, I would like to provide some background on Cyclacel's key programs.

Cyclacel's founding scientist, Professor Sir David Lane, is a globally recognized authority in cell cycle biology, who discovered p53, a key tumor suppressor gene that malfunctions in about 2/3 of human cancers.

Under his guidance, Cyclacel's drug discovery and development programs concentrated on the CDK 2/9 isoforms, which operates as key components of the p53 pathway.

These efforts resulted in bringing 2 molecules into clinical trials: seliciclib, a first generation; and CYC065, a second-generation CDK inhibitor, which have benefited from our clinical experience with seliciclib.

We are excited about the potential of CYC065 and internally discovered intravenously and orally available drug to increase therapeutic benefits in patients with resistant cancers, an area of major interest in the clinical and pharmaceutical communities.

At present, we are evaluating CYC065 in our transcriptional regulation program, and we are continuing to enroll a first-in-human Phase I trial in patients with advanced solid tumors.

The study is evaluating CYC065's safety, probability and pharmacokinetics.

In addition, this study aims to investigate CYC065's transcriptional effects on the Mcl-1 biomarker, which is implicated in the evolution of resistance in cancer.

Specifically, cancer cells that express a high level of Mcl-1 develop acquired resistance to treatment and become very hard to kill.

Our strategy is to use CYC065 to suppress Mcl-1 and resensitize cancer cells with the goal of killing them through induction of apoptosis or program cell death.

It is thought in the literature that the recently approved CDK inhibitors, which target the CDK 4/6 isoforms do not do this and instead cause cancer cells to enter a dormant state called senescence.

Senescent cancer cell do not proliferate and survive by evading cancer treatment.

However, they can be triggered back to a cancerous stage by an oncogenetic signal.

Although clinical experience with the marketed CDK 4/6 inhibitors is limited, it has been provocatively suggested that CDK 2/9 inhibitors would be useful to overcome the resistance, which may be encountered in the near future after treatment with CDK 4/6 inhibitors.

Our Phase I study with intravenously administered CYC065 in patients with advanced solid tumors has reached a 6-dose escalation level, which was recently expanded with the objective of determining maximum-tolerated dose and recommended dosing for Phase II.

So far in this study and with about 20 patients enrolled, there have been no observations of serious toxicity.

After analysis of biomarkers from patient specimens obtained at baseline and during CYC065 treatments, we have observed evidence of pharmacodynamic target engagement.

Of note, we observed prolong Mcl-1 supression in peripheral blood cells, decreases in kinase substrate phosphorylation and increases in PARP cleavage.

These clinical findings were consistent with the company's preclinical data and suggest that early clinical evidence of the drug's mechanism is encouraging.

The trial is being conducted at the Dana-Farber Cancer Institute in Boston, and the principal investigator is Dr. Geoffrey Shapiro.

In parallel with a study in patients with solid tumors, based on investigator interest and ongoing discussions, we expect to initiate CYC065 developments in patients with advanced hematological malignancies.

Preclinical data presented at the 2016 AACR Annual Meeting demonstrated that CYC065 can induce cell death and be combined beneficially with anticancer drugs from the BCL2 and BET, or bromodomain and extra-terminal inhibitor classes, in in vitro models of B-cell lymphoma, including double-hit lymphoma.

Specifically, combinations of CYC065 with the BCL2 inhibitor, venetoclax, also known as ABT-199 or BET inhibitors were both synergistics.

Similar to the first CDK inhibitor approved by FDA in 2015, palbociclib, and more recently ribociclib, CYC065 may be most useful as a therapy for patients with both liquid and solid tumors in combination with other anticancer agents.

We believe that CYC065 offer certain competitive advantages as a potent and differentiated CDK inhibitor.

We will now turn to our DNA damage response or DDR program in which our strategy have been to development medicines that target DNA damage repair pathways, which are another way by which cancer cells manage to evade treatment and continue to proliferate.

In our DDR program, we are currently evaluating in a large Phase I study a clinical regimen of oral sapacitabine, followed sequentially with oral seliciclib, our first-generation CDK inhibitor.

This program targets a specific population of cancer patients, i.e., those who have inherited BRCA mutations from their parents or grandparents.

The study is being conducted at the Dana-Farber Cancer Institute in Boston.

Phase I data from this program in 67 oral recombinant patients with various advanced cancers were reported at an oral presentation at the 2016 ASCO Annual Meeting.

Antitumor activity with durable clinical responses was demonstrated in a subgroup of 45 patients with breast, ovarian and pancreatic cancers, all of whom tested positive for BRCA mutations, including patients who have progressed on PARP inhibitors, the current standard of care in this population.

No responses were observed in BRCA-negative patients.

We believe these are the first evidence of clinical benefits in BRCA-positive patients based on a biological mechanism other than PARP inhibition.

If the data can be confirmed, this combination regimen of sapacitabine and a CDK inhibitor may, therefore, present an opportunity to enhance therapeutic alternatives for this targeted patient population.

Based on the results and investigator interest, the study has been expanded to evaluate an additional 20 patients with breast cancer, all of whom are required to test positive for BRCA in baseline biopsies.

Patients will also undergo whole exome sequencing with the objective of further characterizing the genetic profile of their tumors.

Separately, following investigator interest from certain oncology departments at Dana-Farber referring patients to Dr. Shapiro for our study, we are preparing a Part 3 to evaluate alternative schedules and collect more data in BRCA-positive patients with alternative solid tumors, including ovarian and pancreatic cancer.

Recently, 3 PARP inhibitors, olaparib, rucaparib and niraparib, have been approved by FDA for the treatment of advanced ovarian cancers, including but not limited to, patients with BRCA mutations.

PARP inhibitors represent a major therapeutic advance but are associated with myelosuppressive toxicities, including thrombocytopenia and in rare cases secondary AML or MDS.

The prescribing information for olaparib, the first approved PARP inhibitor, indicates an overall response rate of 34%.

We believe that the sapacitabine and CDK inhibitor regimen may offer an alternative or complementary approach to PARP inhibitors to benefit more patients in this area of unmet medical need.

Although we have not yet determined the optimum dosing regimen for sapacitabine and seliciclib, data from the ongoing extension and the Part 3 studies will inform the potential design of a future clinical study, evaluating an approved PARP inhibitor with or without our regimen in patients with DNA repair-deficient cancers.

In what is an ongoing parallel process, we may at some stage, based on available evidence, elect substitute CYC065 in lieu of seliciclib as the CDK inhibitor in our regimen.

We will now turn to the SEAMLESS study.

As we reported, the study did not reach statistically significant superiority in overall survival, although an improvement in complete remission rate was observed.

In the stratified subgroup of patients with low baseline peripheral white blood cell counts comprising approximately 2/3 of the study population, an improvement in overall survival was observed for the experimental arm.

As mentioned earlier, we are analyzing stratified and exploratory subgroups to identify patients, who are most likely to benefit from treatment with the experimental arm.

Depending on this analysis, the company may initiate discussions with the European and U.S. regulators to determine a potential regulatory submission pathway.

Further behind our lead programs is our mitotic inhibitor program with CYC140, a PLK 1 or polo-Like kinase inhibitor, which is in late preclinical stage.

CYC140 has promising properties as an oncology medicine and has finished IND-directed development.

In preclinical studies, it has demonstrated antitumor activity in xenograft models of liquid and solid tumors with tumor growth delay, tumor regression and cures being observed.

Today, we also announced a poster presentation of CYC140 at the 2017 AACR Annual Meeting to be held between April 1 and April 5 in Washington, D.C. The poster is titled "The Novel PLK 1 Inhibitor, CYC140: Identification of pharmacodynamic markers, sensitive target indications and potential combinations." The poster details Cyclacel's preclinical studies of CYC140 with the aim of identifying target indications for clinical development.

The data demonstrated that CYC140 may have promise in various cancers, including acute leukemias and esophageal cancers.

Our catalyst for the remainder of 2017 include: progress sapacitabine and seliciclib extension cohort in BRCA-positive breast cancer patients, initiate Part 3 in BRCA-positive patients with solid tumors other than breast cancer, report top line results of the CYC065 Phase I trial in patients with advanced solid tumors and initiate CYC065 developments in patients with advanced hematological malignancies.

We will now review our financials.

Paul?

Thank you, Spiro.

As you saw from our release regarding consolidated financial statements for the quarter and full year ended December 31, 2016, our cash and cash equivalents totaled $16.5 million.

This compares to $20.4 million as of December 31, 2015.

The decrease of $3.9 million was primarily due to $10.1 million of net cash used in operating activities, partially offset by net proceeds of $6.8 million from the sale of common stock through the ATM agreement with FBR Capital Markets & Co.

Revenue for the 3 months and year ended December 31, 2016, were $0.3 million and $0.8 million, respectively, compared to $0.4 million and $1.9 million for the same periods of the previous year.

The revenue is primarily related to previously awarded grants from the U.K. government being recognized over the period to progress CYC065 to IND, which was completed in 2015, and IND-directed preclinical development of CYC140, a novel orally available PLK 1 inhibitor, completed in November 2016.

Research and development expenses were $1.9 million and $9.5 million for the 3 months and year ended December 31, 2016, respectively, compared to $2.6 million and $12.4 million for the same periods of the previous year.

The decrease was primarily due to reduced study and clinical supply costs associated with the completion of the SEAMLESS study.

General and administrative expenses for the 3 months and year ended December 31, 2016, were $1.5 million and $5.5 million, respectively, compared to $1.7 million and $5.7 million for the same periods of the previous year.

The other income expense for the 3 months and year ended December 31, 2016, were $0.1 million expense and $0.4 million income compared to nil and $0.3 million expense for the same period of the previous year.

The increase in the other income expense is primarily related to foreign exchange movements.

United Kingdom research and tax credits were $0.4 million and $2 million for the 3 months and year ended December 31, 2016, compared to $0.5 million and $2.1 million for the same periods of the previous year.

The cash receipt for the 2016 tax credit of $2 million is expected to be received in second quarter of 2017, which results in pro forma cash and cash equivalents of $18.5 million as of December 31, 2016.

Net loss for the 3 months and year ended December 31, 2016, was $2.8 million and $11.8 million, respectively, compared to $3.4 million and $14.3 million for the same periods of the previous year.

With our current cash, we project to be able to fund our operations and ongoing clinical studies through the end of 2018.

Operator, we are now ready to take the questions.

(Operator Instructions) And there are no audio questions at this time.

Thank you, operator, and thank you for participating in our update call and your support of Cyclacel's efforts to serve patients in need.

We look forward to updating you on our progress and meeting some of you at upcoming conferences.

Operator, at this time, you may end the call.

Ladies and gentleman, that does conclude today's conference call.

We ask that you please disconnect your line.