Cyclacel Pharmaceuticals Inc (CYCC) 2021 Q2 法說會逐字稿

Good afternoon, and welcome to the Cyclacel Pharmaceuticals Second Quarter 2021 Results Conference Call and Webcast. (Operator Instructions). The company will also be accepting a limited number of questions submitted via e-mail to the address ir@cyclacel.com. (Operator Instructions).

Please note, today's call is being recorded. I would now like to turn the conference 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 second quarter ending June 30, 2021. 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 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 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. Mark Kirschbaum, Senior Vice President and Chief Medical Officer.

Spiro will begin with an overview of our business strategy and progress on Cyclacel's clinical programs and Paul will provide financial highlights for the second quarter of 2021, which will be followed by a Q&A session.

At this time, I would like to turn the call over to Spiro.

Thank you, [Irina.] And thank you, everyone, for joining us today for our second quarter and business update call. On our last call in May, we reported on FDA clearance of our IND for oral fadraciclib or fadra for short, in a streamlined Phase I/II clinical study designated 065-101 in patients with advanced solid tumors.

We are pleased to report that in July, we dosed our first 3 patients in this trial, which is led by prominent oncology thought leaders. We are excited to have this study up and running and believe that fadra has the potential either as a single agent or in combinations to become an important new therapy for the treatment of advanced solid tumors.

Having described in detail the framework for our clinical trial designs for both Fadraciclib and CYC140 on our prior quarterly call, we would like to discuss today our overall strategic direction in developing innovative oncology medicines that focus on cell cycle inhibition. We will also address why we believe investors should be interested in following our progress over the next several months. There is a large universe of development stage oncology-focused companies all working diligently to provide cancer patients with safe and effective alternatives. It may, therefore, be useful to explain how the unique biological and mechanistic properties of our 2 leading drug candidates differentiate our pipeline as a unique pure play in cell cycle inhibition for the treatment of cancer.

Our mission is to relentlessly pursue therapeutic innovations, which can serve unmet patient needs. We do so by converting insights in the biology of cell cycle control into novel oncology medicines. The development of fadra is a prime example of this approach. Fadra is a highly selective second-generation inhibitor of cyclin-dependent kinase, or CDK, and is differentiated by its ability to inhibit both CDK9 and CDK2. While CDK9 plays a central role in regulating gene transcription within normal cells, it is upregulated in many cancer cells, including biliary tract, colorectal, liver, women's cancers and also in leukemias and lymphomas. It leads to overexpression of select proteins, such as MCL1 and MYC which block apoptosis or program suicide of cancer cells and in turn, helps propagate their survival and growth.

Inhibiting CDK9 unblocks the body's apoptotic machinery allowing the immune system to dispose of cancer cells. Recent advancements in our understanding of the biology of CDK2, fadra second target, have led to increased recognition of its role in cell cycle control and its impact on resistance pathways.

Inhibiting CDK2 can overcome resistance of cancer cells to treatment, which arises when such cells become addicted to cyclin E, the partner protein of CDK2. Cyclin E plays a key role in the evolution of resistance in many malignancies and in particular, women's cancers, including breast, cervical, endometrial/uterine and ovarian. In addition, CDK2 contributes to faster recovery of MCL1 protein levels in complementary fashion to CDK9's effects on MCL1, further justifying our choice of fadra's target profile to inhibit both CDK2 and 9.

In prior clinical testing of fadra as a single agent, targeting of CDK2 and 9 has resulted in durable suppression of MCL1 and anticancer activity, including durable PR with 100% shrinkage of target lesions in MCL1 amplified endometrial cancer. Our second drug candidate, CYC140, 140 for short, also disrupts progression of the cancer cell cycle by inhibiting polo Like Kinase 1 or PLK1 at low nanomolar potency thus interfering with multiple stages of cell division or mitosis. PLK1 plays a central role in mitosis and is an important regulator of the late cell cycle checkpoint in normal cells.

When overexpressed, however, PLK 1 becomes oncogenic, causing cellular transformation and overriding the cell cycle checkpoint. Unlike normal cells, cancer cells cannot tolerate loss of PLK1 and under apoptosis. PLK1 inhibition helps restore checkpoint control and is, therefore, considered a promising therapeutic strategy. We believe that 140 is differentiated from previous and current PLK1 inhibitors, among others, by its PLK family selectivity, intravenous and oral administration and best-in-class short half-life.

It shows selective target inhibition, impressive preclinical efficacy and cures in human solid tumor and leukemia xenografts, respectively, at nontoxic doses. And also both oral and intravenous forms were found to be highly potent in xenograft animal models. We have treated 7 leukemia patients with escalating doses of intravenous 140 and have observed antileukemic activity at the third dose level. Optimal biological dosing of a PLK1 inhibitor is likely by daily oral administration. Protecting cancer patients from exposure to viral infection if they receive intravenous therapy at an infusion center, also supports using oral 140, which they can receive at home.

Similar to our strategy of developing an oral formulation of fadra, we believe that oral administration of 140 will lead to more consistent pressure against the enzymatic target of PLK1 versus the IV formulation of 140. We are currently completing toxicology studies of oral 140 and are planning to open 2 Phase I/II studies in both solid tumors and leukemias.

To summarize, we are very excited about the potential of our pipeline. We believe both fadra and 140 hold the potential to position Cyclacel as a leader in developing next-generation anticancer therapies that originate from cell cycle biology. Let us now turn to what investors can expect in terms of clinical study initiations and possible data readouts over the next 6 to 12 months. We expect to dose our first patient with oral fadra in the Phase I/II leukemia study designated 065-102 in the second half of 2021. This study has the same trial design as the solid tumor 065-101 study that just launched.

The leukemia protocol provides for 3+3 dose escalation to determine the recommended Phase II dose and will move immediately to the Phase II part across multiple cohorts, both as a single agent and in combinations. We recently received FDA clearance to proceed with the fadra leukemia study.

Towards the end of 2021, we also plan to dose the first patient with oral 140 in a Phase I/II advanced solid tumor study designated 140-101, following a similar trial design as the fadra program. In the first half of 2022, we plan to dose the first patient with oral 140 in a Phase I/II leukemia study designated 140-102 and also hope to report initial data from the fadra 065-101 and -102 studies. With capital on hand, estimated to last through early 2023, we have the resources to deliver key milestones in our clinical studies. I will now turn the call over to Paul to review our second quarter financials. Paul?

Thank you, Spiro. As of June 30, 2021, cash and cash equivalents totaled $43.6 million compared to $47.8 million as of March 31, 2021. The decrease of $4.2 million was primarily due to net cash used in operating activities. Research and development expenses were $4.1 million for the 3 months ended June 30, 2021, as compared to $1.2 million for the same period in 2020. Research and development expenses relating to fadra increased by approximately $1.9 million for the 3 months ended June 30, 2021, with the start of the solid tumor (inaudible) study, 065-101 and preparations for opening of enrollment of the 065-102 study of fadraciclib in leukemias.

Additionally, R&D expenses related to 140 increased $1 million for the quarter as IND-directed activities are completing and clinical trial supplies are being manufactured. General and administrative expenses for the 3 months ended June 30, 2021 were $2 million compared to $1.3 million for the same period of the previous year, due to cost of approximately $0.4 million related to the exit from a long-term facility lease, increase in legal and professional expenses and recruitment costs related to expansion of the clinical team.

United Kingdom research and development tax credits were $1 million for the 3 months ended June 30, 2021, as compared to $0.3 million for the same period in 2020 due to the increase in R&D expenditure eligible for the R&D tax credits.

Net loss for the 3 months ended June 30, 2021 was $5.2 million compared to $2.2 million for the same period in 2020. The company estimates that the cash resources will fund currently planned programs through early 2023.

Operator, we are now ready to take questions.

(Operator Instructions) And we will take our first question today from Jonathan Aschoff with ROTH Capital.

Spiro, regarding the sites for the Phase Ib/II solid tumor fadra trial, how do you see enrollment unfolding in the Phase Ib portion? Spiro?

Hello, Jonathan. I'm Paul here. Momentary disconnect issue. I think this is a question for Mark Kirschbaum. Mark, would you like to take this question?

Yes, really happy to take this question. And it's a very exciting time for the trial. Let's just answer your question by saying that enthusiasm for enrollment in the study has been extraordinary. We enrolled our first cohort within the first week of opening it, and we already have a waiting list for the second cohort that we'll be opening shortly. So it looks good. (inaudible) as can be done in a trial this way.

Perhaps, Jonathan, I can add a little bit more color. As Mark explained the initial 2 sites, MD Anderson and City of Hope. But we also have the lymphoma groups within these 2 hospitals, which are distinct from the Phase I units. We're also interested in recruiting patients for the study. And we're also preparing to open 2 more sites that are outside the United States. This, of course, requires a regulatory process to be put in place, and that will take a bit longer in the second half of 2021. So we may have actually 6 groups for the time this study concludes contributing patients. I hope this gives you some sense of our confidence and enrollment.

Definitely. Second question I have is, what are the range of possible outcomes from the Phase II part of the solid tumor trial that could lead to regulatory discussions?

Thank you, Jonathan. I think we have reported on 7 cohorts with specific histologies ranging from women's cancer to bile duct cancer lymphomas and colon cancer, as well as an eighth cohort which is a basket study, where patients can enroll regardless of the tissue of origin, the histological background of the cancer, provided they have [molecular] correlates that relate to the drug's mechanism, such as amplification with MCL1, cyclin E, MYC. This means that we have 8 shots on goal in the solid tumor study, which when we add the leukemia program, total about 14 chances to get into regulatory discussions with the end of Phase II data, which typically would be a consultation with the FDA as to whether they will support potential use of the accelerated approval pathway.

So we're very excited about this design as it will give us with a very efficient use of capital, multiple shots on goal and produce a range of outcomes for investors.

Spiro, can you be also a little more granular in the indications that you'll target in the upcoming Phase I/II 140 trial?

Sure. This trial hasn't started yet, and we have not disclosed all of the target indications. I believe we have disclosed colorectal cancer where activity with this class of drugs has been seen in KRAS mutant disease, which is a very exciting development because this is an area of huge unmet medical need and also breast cancer, which is known to be susceptible to this type of PLK1 inhibition mechanism. We expect to announce more of the histologies later on in the year. However, there are a number of sites who have already received drug and are doing the clinical studies in preparation to joining the program once the study opens. At that time, I expect we can give a lot more color on the additional indications. There will be probably as many as 7, as well as a basket similar to the fadra design, but not the same indications, of course.

And we will take our next question today from Kumar Raja with Brookline Capital Markets.

With regard to the solid tumors, when will you start screening patients for the proof of concept? And will you be enrolling patients in all the cohorts parallelly?

Thank you very much for the question, Kumar. I think, again, Mark should answer that question. Mark, please.

So which trial are you asking about? For the fadra [study]?

Fadra 101. Yes.

Yes. So as I mentioned, we've already completed one cohort dosing, and we're about to start the second dosing cohort. So we're moving along. We're already screening patients, and we have quite a waiting list already. So I hope that answers your question. Once we achieve -- of course, we need to have the Phase II dose in hand and dosing schedule. So once we complete the Phase I part of the study, we roll automatically into the 8 arms that were described to you earlier. So there's no break. There's no new protocol that needs to be written. It all goes automatically within the same study.

Okay. Okay. That's helpful. And with regard to the fadra oral leukemia study, in terms of the cohorts where you are -- where you have combinations, how are you thinking about those combinations in terms of safety?

Mark?

Yes. So it's going to be a similar idea. The -- we -- once again, we need to really establish the best and most effective Phase II dose schedule for the leukemias. So we will be going through that period of the study. That should be opening fairly shortly. And once that's established, there will be some single-agent arms, as well as the standard combination arms that have been described. And those will be part of the -- Phase II part of the study that again, open automatically once the Phase II dose is reached. in the study. It's all part of one big study.

So to add bit more color to Mark's answer. We have several choices for combinants but the most appropriate and conservative strategy is to use the current standards of care in acute and chronic leukemia, which are either venetoclax or HMA drugs, including azacitidine or decitabine. And that's precisely what we're doing in the middle cohorts in the 065-102 leukemia protocol. And again, from a safety point of view, we have some experience with giving fadra with the venetoclax.

We know that in a dozen patients or so with AML and half a dozen patients with CLL that was well tolerated. And we have seen antileukemic activity in both AML and CLL. So we have some confidence given the high oral bioavailability of the oral version of fadra that similar results can be obtained in a combination program. We have not had clinical experience with decitabine or azacitidine combinations, but these drugs tend to be a little bit less toxic than venetoclax's as single agents. So we feel that these are quite reasonable to propose from a safety standpoint evidently, so that the FDA (inaudible) study to proceed. I hope this gives you some more color.

Yes, that's very helpful. And in terms of the fadra intravenous dosing, what's happening in that front?

Well, this study is still enrolling, but we expect that patients who have a choice between oral and IV with a fee to take the IV, up to now as there was no oral, but this will change once the oral study opens, I think most people would -- in this time with the pandemic prefer to have the oral drug. So we'll make a decision in the next few months as that study opens.

Okay. So they will be able to -- once you have the optimal dose, they will be able to shift to the oral dosing?

Well, that could shift only if they have not been treated before. We cannot pick a patient that's been -- with a protocol to switch within the study, that is probably not the normal procedure. But my guess is that if we look at patients' choices and both protocols are open, most patients would vote for the oral.

Okay. But whoever is being on the [intravenous], you will just continue to follow them?

At this point, yes.

We will take our next question from Kevin DeGeeter with Oppenheimer.

This is Susan on for Kevin DeGeeter. Just a couple of questions on oral fadra. Can you comment on the profile of the first 3 patients dosed, if you have any details? And does the company anticipate presenting at ASH? And if not, what are some of the other logical venues?

We have not disclosed the profile of the first 3 patients, Susan. I should mention that in the context of this study, this is not a study designated for efficacy. Its primary objective, the endpoint that we're seeking is, as Mark explained, recommended Phase II dose. So the choice of the patients and their history is not prespecified by the protocol. And therefore, the physicians can offer the protocol to any of their patients that they feel may benefit. So at this point, I don't think we can make any predictions about scientific conferences, but we might present data. This is something that we will do in due course, but more likely we think early next year, we might have some results that will be worthwhile following up in terms of mature patient follow-up.

Okay. That makes sense. And the second question on just what are the logical venues for data, either solid tumor or hematological?

I think for solid tumors, we have a lot more venues. I would think AACR and ASCO are the principal ones with historical reported data. And they seem to I think in terms of cadence of our clinical enrollment likely to happen early 2022. ASH, of course, and other smaller hematology meetings happen at the end of the year. So that's a possibility. And we have also ESMO and the [Triple] meeting in the second half of 2022. So there are probably 4 or 5 venues that will be logical for presenting data next year.

Great. That makes sense. And then just one question on the PLK1 inhibitor. Can you provide some color on the remaining IND activities and what the expected time line for completion of the preparation is?

Mark, it's a question for you and perhaps Paul can help with the timing. But first Mark.

Well, we're creating a new formulation. So that takes a little bit of time. We are close to being done with the toxicology studies that were required for the FDA filing. And we will hopefully be moving quickly from there. I mean we anticipate having the protocol design and all that in rapid time.

So -- and this is Paul. So in terms of hoping to open the study, we're projecting towards the end of this year. And that's clearly dependent on what Mark has said in terms of toxicology studies being completed.

Okay. And if I may, just one last question, a general question. Does the company expect COVID-19 infection rates to impact enrollment in the second half of '21?

Yes, that's a huge issue for our industries. I know that many companies have faced headwinds. So we did not experience that in the past year in large means because these are, of course, terminal patients facing dire choices, including hospice care versus enrolling in investigational trials. So, so far, there hasn't been an issue. Mark, of course, is historical practicing physician, maybe he has a different perspective for what things might look like next year.

Well, again, we're recruiting very rapidly right now at this moment. So we are waitlisted for enrollment on the site. So I don't see that things are going to be worse in that regard. And I think particularly given COVID, where they don't require a lengthy hospital stays and where most of this carries outpatient, right, they just show up to receive the pills and do (inaudible) needed. This is really like a perfect solution for most of these patients. It's far superior to having to come into the hospital and spend extended time in the treatment room. We are getting very strong enthusiasm from the investigators and clearly from the patients at this time.

(Operator Instructions) I'm showing that we have no further questions at this time. I will turn the call back to Spiro for any closing or additional remarks.

Thank you. And thank you all for participating in Cyclacel's Second Quarter 2021 call. Cyclacel is entering an exciting new period in its history. In the months ahead, investors can expect continued expansion of our clinical programs for both fadra and 140. We believe that these trials will generate encouraging data readouts throughout 2022 and early 2023.

As always, we appreciate your support as we continue our efforts to deliver on our strategy and realize stockholder value. We look forward to updating you on our progress and meeting some of you at upcoming conferences either virtually or hopefully, in person. Operator, at this time, you may end the call.

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