Cyclacel Pharmaceuticals Inc (CYCC) 2021 Q1 法說會逐字稿

Good afternoon, and welcome to the Cyclacel Pharmaceuticals First Quarter 2021 Results Conference Call and Webcast. (Operator Instructions) Please note that today's call is being recorded.

I would now like to turn the conference call 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 first quarter ending March 31, 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 accomplishments on Cyclacel's multiple clinical programs, and Paul will provide financial highlights for the first 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, [Irena], and thank you, everyone, for joining us today for our first quarter and business update call.

On our last call, in February, we provided an overview of the clinical development strategy of fadraciclib and CYC140. Our main objective remains to advance these targeted orally administered candidates into registration-directed outcomes from multiple indications.

We are pleased to report that we have achieved the initial key milestone delivering on this strategy with FDA clearance over IND for oral fadraciclib or fadra, for short, in a streamlined Phase Ib/II clinical study in patients with advanced solid tumors. We expect to open the study in the next few weeks once contract discussions with the sites are concluded.

The study design includes a Phase Ib part with patients receiving continuous escalating dosing of oral fadra with the objective of defining a recommended dose for Phase II. Although we will initially evaluate fadra as monotherapy, the design includes the possibility of combination treatment in relevant histologies as required with available or emerging standard of care.

It is worth noting that before entering this Phase Ib study with the oral formulation, Cyclacel has generated a significant amount of clinical data with the IV formulation in solid tumors as monotherapy and in liquid cancers as combination.

In addition, we presented oral bioavailability data in October 2020, which demonstrated comparable dosing characteristics between the oral and IV forms with respect to half-life, maximum concentration and area under the curve. We believe the highly informative data generated from these earlier studies will help us determine the optimal dosing level for the oral formulation in an efficient manner.

The Phase II part will include between at least 5 and possibly up to 8 cohorts defined by histology. These will include breast, colorectal -- including KRAS-mutants, endometrial, ovarian cancers, and certain lymphomas.

An additional basket cohort would enroll patients with relevant biomarkers to the drug's mechanism, including MCL1, MYC and cyclin E regardless of histology.

To understand the rationale for selecting these cohorts, let us review fadra's unique differentiating feature of targeting both CDK2 and CDK9. Inhibiting CDK2 results in reduction of cyclin E protein levels and CDK9 in reduced expression levels of MCL1 and/or MYC.

Elevated levels of these proteins correlate with development of cancer resistance and jamming of the apoptotic mechanism by which a healthy body controls abnormal cell proliferation.

Our strategy with fadra is to pharmacologically suppress these proteins and reactivate apoptotic machinery leading to cancer cell death. We believe that in order to achieve optimal biological levels, applying continuous pressure on the respective targets is critical. Thus, daily dosing by mouth is preferred to intermittent intravenous dosing, which may allow cancer cells to recover.

Fadra has demonstrated durable suppression of MCL1 and other mechanistically related proteins, including cyclin E and MYC, at tolerated doses in clinical studies when dosed intravenously.

Anticancer activity, including durable partial response as monotherapy was observed in heavily pretreated patients with solid tumors, nearly all of whom had amplification of MCL1, cyclin E and/or MYC at baseline. As an example, a patient with MCL1 amplified endometrial cancer achieved radiographically confirmed PR after 4 cycles on single agent fadra and is continuing treatment for more than 1.5 years with reduction in her target tumor lesions, having reached 96%.

In further support of our cohort selection, a recent publication reported that overactive KRAS-mutant cancer cells are impeded by CDK9 inhibition. The authors, led by Dr. Frank McCormick of the University of California, San Francisco and the NCI's Frederic National Lab for Cancer Research screened almost 1 million compounds for RAS-mutant selectivity that could disrupt oncogenic KRAS signaling.

They identified 5 groups of chemical compounds, which preferentially inhibited oncogenic KRAS-mutant cell lines, including KRAS-dependent colorectal cancer lines. 3 out of these 5 groups of active compounds primarily inhibited CDK9. These findings expand on previous findings that dual CDK2/9 inhibition is an optimal strategy to treat colorectal cancer, that KRAS-mutant pancreatic cancer is sensitive to CDK9 inhibition and that fadra is effective against KRAS-mutant lung cancer in preclinical PBX models.

Collectively, these publications support the potential for the therapeutic use of fadra in KRAS-mutated cancers, including colorectal, lung, and pancreatic.

In summary, our Phase Ib/II strategy is informed both by the clinical activity of fadra and the drug's mechanism. For example, one of the cohorts will be colorectal cancer, including KRAS-mutants. Lung and pancreatic cancer patients are eligible to be enrolled in the basket cohort if that cancers are suspected to be mechanistically related to fadra's mode of action.

The Phase II study design allows for rapid expansion or discontinuation of a cohort, subject to observation of efficacy signals based on prespecified statistical rules. Outcomes from Phase II expansion cohorts are designed to be registration enabling. This means that if we detect a strong efficacy signal in 1 or more cohorts and confirm a path forward with regulators, we may be able to pursue an accelerated approval.

We believe this streamlined design represents an efficient use of patient and capital resources and increases the probability of success across multiple tumor types. We will disclose further details of other cohorts as the study gets underway.

We are designing a similar protocol with oral fadra for patients with hematological malignancies, both as monotherapy and in combinations. The second Phase Ib/II study would include several leukemia cohorts and a basket cohort.

Let us now turn to the antimitotic program and the plan for CYC140, or 140 for short, our Polo-Like Kinase or PLK1 inhibitor. Like fadra, 140 was discovered in-house. 140 is a small molecule, high potency PLK1 inhibitor, which has demonstrated potent and selective target inhibition and impressive efficacy in cures in human tumor and leukemia xenografts at nontoxic doses. We believe that 140 is differentiated by PLK family selectivity, administration by both intravenous and oral routes and a short half-life.

PLK1 is essential for dividing cells. However, normal cells with intact cell cycle checkpoints are less sensitive to PLK1 depletion. A short half-life, therefore, enables dosing flexibility in patients and may minimize potential effects on nonmalignant hematopoietic cells.

PLK1 overexpressing tumors with levels correlating with patient prognosis are cancers such as esophageal, gastric, leukemia, non-small cell lung cancer, ovarian and squamous cell cancers as well as MYC-amplified cancers. Recent data with the only other PLK1 inhibitor in clinical development suggest that PLK1 inhibition may be effective in KRAS-mutated metastatic colorectal cancer.

Like fadra, we believe that optimal biological doses can be achieved by oral administration of 140. We are manufacturing clinical trial supplies and are currently engaged in IND-related activities.

Our clinical development plan for 140 includes a third streamlined Phase I/II clinical study in patients with advanced solid tumors to start in the second half of 2021, which is largely similar in design to the fadra program.

The Phase I part will enroll patients receiving continuous escalating doses of oral 140 as monotherapy. The Phase II part includes several patient cohorts defined by histology and a basket cohort enriched for PD markers of relevance to 140's mechanism. Like fadra, we also plan to open a fourth Phase I/II study in leukemia with oral 140.

We will continue to move our programs forward, aiming to deliver multiple data outcomes over the next 2 years. Our key milestones for the rest of 2021 are: first patient dosed with oral fadra in the Phase Ib/II advanced solid tumor study expected in the next few weeks; first patient dosed with oral fadra in the Phase Ib/II leukemia study; and first patient dosed with oral CYC140 in a Phase I/II advanced solid tumor study.

In early 2022, we plan to dose the first patient with oral CYC140 in a Phase I/II leukemia study. We expect to report Phase I data with oral fadra in advanced solid tumors, including any efficacy signals as they arise throughout 2021. Clinical data from the other studies will follow later on in 2022.

We will also provide updates from the ongoing Phase Ib/II investigator sponsor trial of sapacitabine-olaparib combination in patients with BRCA-mutant metastatic breast cancer when reported by the investigators.

With capital on hand estimated through early 2023, we have the resources to deliver key milestones in our clinical studies.

I will now like to turn the call over to Paul to review our first quarter financials. Paul?

Thank you, Spiro. As of March 31, 2021, cash and cash equivalents amounted to $47.8 million compared to $33.4 million as of December 31, 2020. The increase of $14.4 million was primarily due to $18 million of net cash provided by financing activities, offset by net cash used in operating activities of $3.6 million. There were no revenues for each of the 3 months ended March 31, 2021 and 2020.

Research and development expenses were $2.6 million for the 3 months ended March 31, 2021 as compared to $1.1 million for the same period in 2020. R&D expenses relating to our CDK inhibitor program increased by almost $0.8 million for the 3 months ended March 31, 2021, as we continue to progress the clinical evaluation of fadra.

General and administrative expenses for the 3 months ended March 31, 2021 were $1.7 million compared to $1.3 million for the same period of the previous year due to an increase in legal and professional expenses and recruitment costs relating to expansion of our clinical team.

Total other income net for the 3 months ended March 31, 2021 was $0.1 million compared to $0.9 million for Quarter 1 2020. The decrease of $0.8 million for this quarter is primarily related to income received under an asset purchase agreement with Thermo Fisher Scientific Inc.

United Kingdom Research and Development tax credits were $0.7 million for the 3 months ended March 31, 2021, as compared to $0.3 million for the same period in 2020 as a direct consequence of increased qualifying research and developed expenditure.

Net loss for the 3 months ended March 31, 2021, was $3.5 million compared to $1.2 million for the same period in 2020. The company raised net proceeds of approximately $13.5 million from a registered direct financing in March 2021 and received an additional $4.5 million from warrant exercises.

The company estimates that total cash resources of $47.8 million as of March 31, 2021, will fund currently planned programs through early 2023.

Operator, we are now ready to take questions.

(Operator Instructions) Our first question comes from the line of Jonathan Aschoff with ROTH Capital.

I was wondering, how do you intend to ascertain the contribution of oral fadra if you know you're allowing a combo therapy, I mean if you allow in your trial combo therapy whenever it's desired?

Jonathan, I will ask Mark Kirschbaum to address that. But just to remind everybody that the study is starting with monotherapy. It then provides, in the event that we don't see sufficient activity as a single agent, to enroll combination cohorts.

Perhaps, Mark, you could share your insights on the trial design?

Yes, I mean, I essentially agree. The trial is designed primarily to ascertain single-agent activity. We believe there are a number of tumor indications where single-agent activity may actually produce meaningful responses.

So the primary focus of the solid tumor trial, given the landscape of leukemias, that's a little different in that well-known drugs will be combined that are standard in leukemia world. But I think our primary goal in the solid tumor trial is to push for single-agent activity and add combinations as we see activity.

That's a lot clear. And the last question is, what percent of your solid tumor patients that you expect to enroll will have KRAS patient? Do you want some sort of threshold? Or are you just going to take what comes?

I think this is again a question for Mark.

Sure. I assume you're speaking specifically about colon cancer.

Right.

So again, the way this is designed is that there's a Phase I component of this trial, which is pretty much open to all tumor types that are relevant. And then there's an individual kind of 2-stage design cohort, specifically designed for colorectal cancer. As you know, KRAS is a pretty significant percentage of those patients. We didn't formally exclude non-KRAS patients since we haven't seen yet the clinical activity overall. But my presumption is that the percentage of those patients will be high.

Your next question is from Kevin DeGeeter with Oppenheimer.

Maybe 2 for me, then I may have a follow-up as well. With regard to the oral fadra study, can you just comment on how you're thinking about the starting dose and dose escalation given that you do have some prior exposure there with the IV? What I'm really driving at here is how quickly might we hope to see this compound move through dose escalation?

And then thanks for the update with regard to KRAS CRC for fadra. Can you just comment on the treatment landscape for targeted agents for KRAS CRC and kind of how you see both fadra and kind of 140 fitting into that landscape?

Great. Let's have Mark answer your first question, Kevin, about the dosing strategy based on existing IV data, and then I'll take on the landscape question on KRAS colorectal cancer. Mark?

Sure. So the good news here is that based on the previous data that we had with the IV drug, we were able to model the dosing schedule based on pharmacokinetics that we already had. So I can tell you that we are already in the active dosing range from our very first dose level.

So this is -- we believe that we'll be hitting the target already from the start. So depending on how well it's tolerated, we'll be increasing the number of days and then the dose. But we believe that all of our doses from the start are within an active range.

Got it. And I'm sorry, Spiro, I think you actually were going to take the second part of that.

Yes, you asked the question about treatment landscape for KRAS-mutant colorectal cancer. Of course, most investors are aware that there are 2 drugs that are targeting one of the many mutations characterizing the KRAS genotype, which is G12C. These 2 drugs, sotorasib and adagrasib from Amgen and Mirati, respectively, have shown promising activity in non-small cell lung cancer. But the data in colon was less exciting, although still promising, probably would require combination.

This has given rise to a number of new agents positioning for potential combinants once these 2 drugs reach the market, but I would draw your attention to 2 facts. First of all, G12C only addresses about 10% of the KRAS population. At least 5 other mutations, possibly more, responsible for treatment failure and disease progression in this cancer.

We know that the other CDK9 drugs are given primarily intravenously, which means that giving them to solid tumor patients could be a challenge as we discovered with fadraciclib given intravenously as daily pressure on the target, it will be hard to achieve as patients -- even before the pandemic, especially now would be resisting daily therapy with an intravenous drug.

And finally, there is the question of what about PLK1? As we know, PLK1 has produced PRs in a group of 5 patients out of 14 treated with KRAS-mutant colon cancer. This was as part of a triplet with angiogenesis agent, Avastin as well as FOLFIRI chemotherapy.

So it remains to be seen whether PLK1 by itself as a single agent can have activity in this setting. So we intend to answer both of these questions, CDK9 inhibition, in our case, together with CDK2 as well as PLK1 inhibition as single agent in the setting of KRAS colon cancer. This would be a high priority for the company, but not necessarily derailing us from the already announced clinical development plan. It's just giving us the chance to perhaps hone in if we see activity. I hope this gives you some perspective.

That's super helpful. Then my follow-up actually pertains the dose escalation for the oral fadraciclib study. And specifically, given that you're already starting at what's essentially a therapeutic dose, would these patients have an opportunity to transition to a higher dose as you escalate? And to the extent that that's permitted in the protocol, kind of, how long would a patient typically need to be able to stay on drug before having an opportunity to dose escalate?

All right. Mark?

Yes. It's a very specific question about the trial function. We don't have interpatient dose escalations built into the study at this point in time. Again, because we believe that all our doses are active. The dosing schedule, again, is primarily increasing the number of days and weeks. But there's no plan for integration dose escalation at this point in time.

And let me say for the benefit of those of you listening the webcast that more detail on Mark's comments is available on our presentation in the corporate presentation section of our website.

Operator, back to you.

Your next question is from Wangzhi Li with Ladenburg.

First question on the KRAS discovery. So since you have both the CDK9 inhibitor and PLK1 inhibitor and both issuing to kind of inhibitor KRAS mutant cancer. Do you have any insight? Or do these 2 mechanisms overlap or can they be synergistic it? Or what's the potential to combine then, have any PiCnIc experience or does it make sense to test in the trial?

That's a great question, Wangzhi. I think there are 2 ways to address such a question from a portfolio management point of view. It seems to us that there is some biological rationale but has not been fully studied because these are relatively recent discoveries. As a more practical matter though, 2 unapproved drugs in the same protocol is a challenge for many sponsors. And that's one of the reasons why people are looking to guess about the emerging standard of care in KRAS-mutant colon cancer, for example, and then seek to combine with an approved drug, which we know is a tested strategy that could lead to rapid FDA approval.

And I suspect that Cyclacel will follow the same path. Ultimately, though, until we understand the translational consequences of each of these drugs as single agents and understand at what stage of the KRAS-mutation or spectrum do they work is really hard to speculate on combinant trial possibilities. But it's something that has certainly crossed our mind and would look at it at a later time.

Okay. Makes sense. One more question on the investigator sponsored trial for sapacitabine with olaparib. I mean the small number looks quite encouraging. Do you have any further background or color on the patient kind of baseline condition, how do we compare to the monotherapy trial, historically, if you compare this response rate and outcome?

Yes, that's a great question. Well, this question refers to the investigator sponsor trial, combining our third drug, sapacitabine, an oral nucleoside analog with oral olaparib, which is the standard-of-care in the setting of metastatic breast cancer, which is mutant for BRCA.

In that setting, the reference study is called OlympiAD. It's an AstraZeneca study with olaparib. That study showed about 50% PR. But I don't believe that this is the right metric to compare this small data set, as you pointed out, Wangzhi. Our view is that with some small numbers, one could easily get seduced by the attractiveness of small numbers, but we need to see a bigger population to draw conclusions.

There is one point about this data which is intriguing. The olaparib, and for that matter, all PARP inhibitors, duration of effect is modest. It's usually around a year. And most patients discontinued therapy due to myelosuppression. We know from our studies in leukemia that sapacitabine can be taken for multiple years. I believe the longest patient on sapacitabine has been on for more than 5 years, which suggests that if we can stretch the therapeutic benefits with olaparib combination in the setting of PR or durable stable disease, much beyond the olaparib single agent benefit, then we could create a continuum of care, which would be very exciting for this population of patients who have nothing once PARP inhibitors fail.

So that, I think, is the main interest of the investigators who are paying for the cost of the study, but we're going to keenly watch. And of course, we are in frequent dialogue with them as this data unfolds.

And there are no further questions in the queue at this time. I'll hand the call back over to management for closing remarks.

Thank you, operator, and thank you all for participating in Cyclacel's first quarter call. We appreciate your support of our efforts to deliver on our strategy and realize stockholder value by demonstrating safety, efficacy and cost effectiveness of our medicines.

Please stay safe and well. 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 concludes today's conference call. Thank you for participating. You may now disconnect.