Cyclacel Pharmaceuticals Inc (CYCC) 2018 Q3 法說會逐字稿

Good afternoon, and welcome to the Cyclacel Pharmaceuticals Third Quarter 2018 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.

Good afternoon, everyone, and thank you, for joining today's conference call to discuss Cyclacel's financial results and business highlights for the third quarter of 2018.

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 SEC which include, among other things, our Form 10-Q and 10-K.

These filings are available from the SEC or our website.

All our projections and other forward-looking statements represent our judgment as of today, and Cyclacel does not take 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.

Spiro?

Thank you, Alex, and thank you, everyone, for joining us today for our third quarter 2018 business update call.

On today's call I will begin with an overview of Cyclacel's clinical programs and progress in the third quarter 2018, and I will then turn the call over to Paul to provide financial highlights, which will be followed by a Q&A session.

Let's begin with an update of our lead program CYC065, a cyclin-dependent kinase inhibitor of CDK 2/9.

In the ongoing battle against cancer, we're facing a growing problem of resistance to cancer drugs.

This occurs when drugs stop working against cancers after early effectiveness.

Drug resistance increases the risk of disease progression and death, but can also undermine the significant resources expended in discovering and reimbursing innovations in cancer therapies.

In many cancers, resistance correlates with increased expression of members of the Bcl-2 protein family, including Bcl-2, Mcl-1 and others.

These proteins assist cancer cells in evading the effect of available therapies and promoting growth.

They have been dubbed pro-survival proteins as they help cancer cells survive the effects of anticancer drugs and gain an advantage over normal cells.

Suppressing pro-survival proteins is therefore a promising therapeutic strategy.

Multiple studies show that suppression of Bcl-2 and/or Mcl-1 makes cancer cells again sensitive to the drug that stopped working which then leads to cancer cells death.

One such drug, venetoclax or Venclexta from AbbVie have been approved for second line CLL.

It works by inhibiting Bcl-2, but has no significant activity against Mcl-1.

At Cyclacel, our approach is to leverage our knowledge of cell cycle biology to disrupt cancer resistance.

CYC065, our lead CDK inhibitor suppresses Mcl-1 by interfering with transcription of cancer cells.

Transcription is regulated by CDK9, an enzyme targeted by CYC065.

In the first-in-human Phase I clinical study, presented at the 2018 AACR Conference this last spring, a single dose of CYC065 alone resulted in durable suppression of Mcl-1 for at least 24 hours in 11 out of 13 patients treated at the recommended Phase II dose.

Several patients whose cancers overexpressed Mcl-1, MYC and/or cyclin E experienced tumor shrinkage and disease stabilization.

Following this Phase I data, which demonstrated proof of mechanism and encouraging preclinical data showing synergy, we have been preparing to test a double-hit strategy of simultaneously suppressing Bcl-2 and Mcl-1 in CLL patients by pairing venetoclax with CYC065.

This study has now been open for enrollment and is evaluating escalating doses of CYC065 with venetoclax in patients with relapsed or refractory CLL.

In this setting, after failure of frontline therapy, often with the BDK inhibitor, patients experience rapid growth of leukemia cells.

Despite high initial response rates on single agent venetoclax, only 1 in 4 patients achieve complete remission.

In addition, venetoclax progression is often correlated with elevation of Mcl-1.

We believe that targeting both Mcl-1 and Bcl-2 with a combination of CYC065 and venetoclax may offer an important alternative to CLL patients in need.

This study was initially opened at MD Anderson Cancer Center as part of our recently announced alliance with this center of excellence.

Let me make a few comments on the MD Anderson alliance.

This 3-year, risk-sharing partnership would enable clinical evaluation of 3 Cyclacel drug candidates in patients with hematological malignancies, including CLL, AML, MDS and other advanced leukemias.

MD Anderson will conduct 4 clinical studies, enrolling up to 170 patients, which will investigate CYC065, CYC140 and sapacitabine either as single agents or in combination with approved therapies.

The MD Anderson alliance allows us to parallel track the development of our drugs in a cash sparing manner, while utilizing MD Anderson's expertise to recruit eligible patients.

Of note, Cyclacel remains the sponsor for these studies.

In addition to the CLL study, and also as part of the MD Anderson alliance, we have activated a first-in-human study of CYC140, our Polo-like Kinase or PLK 1 inhibitor, in patients with advance leukemias.

CYC140, which was discovered in-house, has demonstrated preclinically that it is a potent and effective inhibitor in both blood and solid cancers.

2 further protocols are in development with MD Anderson investigators.

They will evaluate combinations of CYC065 and sapacitabine either as single agents or in combination with approved agents.

We are continuing enrollment in the CYC065 single-agent Phase I study in patients with advanced solid cancers at the Dana-Farber Cancer Institute.

Following the AACR report of the part 1 data, earlier this year, part 2 is evaluating a more intensive dosing schedule of 2 days per week for 2 weeks over 3-week cycle.

The study will provide important safety and pharmacokinetic and pharmacodynamic data to inform combination trials, including assessment of biomarkers related to CYC065's mechanism, such as overexpression or amplification of Mcl-1, MYC or cyclin E.

We are continuing discussions with various investigators in evaluating cooperative group proposals to determine how CYC065 would add clinical benefit in a variety of other tumor indications suitable to the drug's mechanism.

Let us now briefly turn to our DNA Damage Response program.

We are pleased that a Phase Ib/2 clinical study evaluating sapacitabine in combination with the approved PARP inhibitor olaparib or AstraZeneca's LYNPARZA has started enrollment of BRCA-positive patients with breast cancer.

This investigator-sponsor trial or IST conducted at Dana-Farber is planned to enroll approximately 64 patients.

Cyclacel is providing sapacitabine investigational drug and AstraZeneca, olaparib.

We view this IST as another cost-effective way to evaluate potential benefits of our drugs in difficult to treat cancers.

PARP inhibitors are currently approved standard of care for homologous, recombination, deficient or HIV-positive patients with breast and ovarian cancers, which include those positive for BRCA mutations.

Sapacitabine works by an HRD-relevant mechanism that is distinct from the MoA of PARP inhibitors.

Sapacitabine has durable clinical activity, including CR and PR in BRCA-positive patients with breast, ovarian and pancreatic cancers.

The 2 therapies administered in combination could thus provide additional benefit to these patients for whom limited treatment options exist.

Lastly, an update to our work with the data from the sapacitabine Phase III SEAMLESS study in elderly AML.

We met with 3 European regulatory authorities who provided consistent advice on next steps and a proposed methodology.

This was an unexpected but a welcome development, which suggests that there is potentially a path forward to regulatory submission.

As a result of the guidance, Cyclacel is evaluating a potential request for a meeting with the Scientific Advice Working Party of the European Medicines Agency.

On the corporate front, we have been fortunate to be working with a highly experienced board of directors over the years.

Consistently with his history, we have recently welcomed Dr. Robert Spiegel to the board.

Bob brings a 30-year track record in R&D and operational experience as a senior executive in biopharmaceutical companies and as an adviser to investment funds.

He spent 25 years at Schering-Plough, acquired by Merck, where he joined as the first director for Oncology Clinical Research.

Bob's expertise will support the development of our pipeline and our corporate strategy.

In summary, we continue to execute on our strategy to rapidly advance CYC065 and CYC140 clinical development.

Our recent achievements include: entered into clinical development alliance with MD Anderson, which enables parallel tracking of these preclinical candidates in a cash sparing manner; open enrollment of the Phase Ib clinical trial, evaluating CYC065 in combination with venetoclax in patients with relapsed or refractory CLL; activated a first-in-human Phase I trial of CYC140, our PLK inhibitor in advanced leukemias; dosed the first patient in a Phase Ib/II IST of sapacitabine and olaparib combination in BRCA-positive patients with breast cancer; continued enrollment in part 2 of the Phase I study evaluating CYC065 monotherapy in patients with advanced cancers; and completed meetings with 3 EU regulatory authorities with the aim of determining next steps regarding the SEAMLESS data of sapacitabine in elderly patients with AML.

I would now like to turn the call over to Paul to review our third quarter 2018 financials.

Paul?

Thank you, Spiro.

As you saw from our press release, for the quarter ended September 30, 2018, our cash and cash equivalents totaled $19 million compared to $23.9 million as of December 31, 2017.

The decrease is primarily due to $4.7 million of net cash used in operating activities over the last 9 months, which includes $1.2 million of R&D tax credit received in this quarter from the United Kingdom government.

Research and development expenses were $1.2 million compared to $1 million for the same period in 2017.

General and administrative were $1.3 million compared to $1.2 million for the third quarter of 2017.

The U.K. government R&D tax credit for the quarter was $0.3 million.

The net loss for the 3-month September 30, 2018, was $2.1 million compared to $1.9 million for the same period in 2017.

As of September 30, 2018, 11,997,447 shares of common stock and 264 or 3% of shares of Series A Preferred Stock are outstanding.

Taking into account the cash sparing consequences of the MD Anderson alliance, we now believe there are cash and marketable securities of approximately $19 million as of September 30, 2018, will be sufficient to finance operations until the second quarter of 2020.

Operator, we are now ready to take questions.

(Operator Instructions) Our first question will come from the line of Jotin Marango with Roth Capital.

I have one on each of the programs.

On CYC065, the study is open for enrollment.

So congratulations on the pace of moving this forward there.

Spiro, could you give us some color on the type of patients that we might be likely to see treated with the doublet?

So will it be patients that are refractory to venetoclax or that have failed or maybe just patients that have chosen to take a doublet instead of just venetoclax?

This is a question for Judy.

Judy, would you like to take that?

Yes.

And the patient population is [who have failed] the frontline treatment of PDK inhibitors.

And then there are all stable doses of venetoclax.

So they are a refractory/relapse patients after the frontline therapy.

So they have not experienced venetoclax before.

So as you suggest, they had elected to also have CYC065 in addition to receiving venetoclax.

Got it.

And Spiro, when would it be realistic to start expecting some data here just reasonable preliminary, Phase I, sort of a reasonable group, let's say, 5 to 10 patients?

I would think within the next 6 months, if the study progresses as expected.

This is an open-label study.

The primary indicator of efficacy is complete remission.

So we should know fairly quickly whether the combination is effective.

The benchmark to beat is the activity of venetoclax alone.

If we look at the FDA approved label, as a single-agent venetoclax has a CR of about 20%, and in combination with trastuzumab it goes up to 27%.

So this is a useful metric to keep in mind, even though one has to put in the usual caveats for cross-study comparisons.

On CYC140, the new PLK 1 inhibitor, could you just recap for us, just the highlights of preclinical points of differentiation of this compound, perhaps versus prior PLK targeting agents such as Volasertib, which was advanced in AML prereasoning?

Okay.

So let me answer your question in terms of points of differentiation.

We believe this is an important therapeutic class.

The target was discovered by our former Chief Scientist, Professor David Glover, who also discovered other mitotic kinases like Aurora that have been in clinical investigation over the years.

The perhaps most recent clinical development program was conducted for a drug called Volasertib by Boehringer Ingelheim.

It's a PLK inhibitor.

The compound went all the way to Phase II, received breakthrough therapy designation from the FDA, but had safety issues in Phase III.

We believe that a more selective PLK 1 inhibitor, particularly, selective for the PLK 1 as a form over 2, 3 and 4 could have potential advantages within the therapeutic application should be in liquid cancers first, in particular, advanced leukemias.

As we know from the experience of Volasertib, this is an area where therapeutic advantage can be shown as a single agent.

So perhaps here, unlike our CDK program, we have somewhat higher expectations of activity.

One has to have or be balanced in cautioning that safety is always a concern for a drug never before tested in humans.

One has to be patient and wait for a safe and effective dose to emerge from the Phase I program, but with being differentiation essentially based on selectivity and a better physical chemistry and pharmaceutical properties profile.

And lastly, sapacitabine.

You mentioned that you've spoken to 3 authorities across the ocean.

And you may request a meeting with the EMA Scientific Advice Working Group.

So just, I guess, perhaps not as familiar with the European bureaucracy, who is?

But what function does that body usually play at this stage?

So the Scientific Advice Working Party.

Does it evaluate your data?

Or does it give you any data-driven guidance?

So some color on that, please.

Yes.

The Scientific Advice Working Party is a formal part of the EMA.

Sponsors are welcome to make submissions, usually on drugs that are designated orphan.

However, others may, of course, request scientific advice.

The value of consultation is that usually it provides the sponsor with some directional guidance as to what type of approach the agency will accept in the potential market and authorization application.

So it's a very important part of the process in gaining confidence before one launches on the long and arduous road to file a submission and prosecute that through the system.

As a pre-step to a discussion with the EMA relevant bodies, we have chosen, as many other companies do, to consult with 3 authorities who we and our experts believe are highly regarded within the peer group of more than 20 countries that comprise the membership.

The value of having this consultation is that one can potentially obtain useful insights into what are the issues that are likely to be raised at the full planum, the full committee, which is called The Committee for Medicinal Products or CHMP.

And as you heard, we had the surprising turn of events in that the agencies we spoke to, gave us specific and consistent guidance on the methodology, which we're now evaluating for a potential submission to the SAWP as a prerequisite to making a decision on submitting a full marketing authorization application.

I should caution there's no guarantee of success in this process, but we find it encouraging that they, a, gave us consistent advice and b, there's a clear methodology, which is also cited in previous guidance that EMA has issued to applicants in situations such as the one that is included in our SEAMLESS trial.

Your next question comes from the line of Wangzhi Li with Ladenburg Thalmann.

Just maybe, little bit more color on the CYC605 I Phase II trial in combination with venetoclax in the AML patients.

Maybe I missed it, how many patients are going to enroll?

And how many sites are you enrolling patients right now?

Judy?

Well, we're now only going to be enroll starting at MD Anderson.

It certainly can be expanded to other sites, if we need it.

It's a typical Phase Ib studies.

We're looking for safety of the combinations.

In general, it's -- in about 20 to 25 patients.

Let me also add, Wangzhi, to Judy's comment that the agreement with MD Anderson permits us to go to additional sites.

There are no restrictions.

Obviously, we are very motivated as they are to do the early evaluation within the alliance.

But if we have, hopefully, some signals of success, and we're willing to expand to other sites, we are contractually free to do so.

Got it.

And the dosing schedule is the 2 days, every 2 weeks of the 3-week cycle?

Well, the dosing schedule is -- was a safety dose that we worked out from the Phase I trial in the solid tumors.

And we would be combining with a stable dose of venetoclax.

So these one 4-hour infusion every 3 weeks?

Something like that.

It's 4-hours infusion.

Yes.

Every 3 weeks, yes.

Okay.

So just kind of maybe understand better about it.

Do you think it's better or beneficial to dose it more frequently to maintain the suppression of Mcl-1?

I mean I'm assuming you attached in that a different schedule in the Phase I part 2, right?

Well, the dosing is always a challenging area.

I think one has to -- first of all, making sure that the combination schedule is generally tested as a single agent into the type of cancers before you combine them.

I think that because CDK9 inhibitor by itself is expected to have [own activities] by itself.

It's a single agent in CLL.

I think that this current dosing schedule is the safest we can do as the first step.

Okay.

Got it.

So last question is, how -- maybe you mentioned this, after the MD Anderson deal, how much extension for your cash runway position?

This would be a question for Paul.

Yes.

So Wangzhi, thanks for the question.

In our remarks we've mentioned that we've extended our cash runway now to the second quarter of 2020.

Previous guidance was to the beginning of 2020.

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

And I would like to turn the call back over to the company.

Thank you.

And thank all of you for participating in our third quarter 2018 update call, and your support of Cyclacel's efforts to develop drug candidates with the potential to enhance existing therapies and address cancer resistance.

We look forward to updating you on continued clinical progress and meeting some of you at the forthcoming ASH Conference.

Operator, at this time you may end the call.

Thank you.

Ladies and gentlemen, that does conclude today's call.

You may now disconnect.