Cyclacel Pharmaceuticals Inc
NASDAQ:CYCC
Earnings Call Analysis
Q4-2023 Analysis
Cyclacel Pharmaceuticals Inc
The company presented a decrease in cash and cash equivalents at the end of 2023, totaling $3.4 million, down from $18.4 million at the end of 2022. The pro forma figure boosts this number to $6.3 million after accounting for UK research and development tax credits. Operating activities consumed $16.1 million in cash over the year, better than the $20.8 million in the prior year, pointing towards a more efficient use of cash. Management estimates the available cash should sustain currently planned programs into the second quarter of 2024.
Research and development costs notched a yearly total of $19.2 million, a decline from $20.3 million the previous year, largely due to trimmed clinical trial costs for their 'fadra' program, though some of these savings were offset by increased manufacturing costs. General and administrative expenses also decreased to $6.7 million from $7.4 million, attributed to lower professional fees. These reductions in spending across the board indicate a concerted effort to manage costs amidst a challenging fiscal environment.
The company reported additional expenses in the form of other income net for both the quarter ($0.3 million) and year ($0.1 million), contrasting the income recorded in the same periods of the prior year. The year's decrease is primarily due to a lack of royalty income that was received last year. Moreover, net loss grew slightly to $22.6 million from $21.2 million, which included stock-based compensation expenses that remained constant year over year.
In development, there's a pause on the 'plogo' study to await a new formulation expected in six months, impacting the timeline. However, for 'fadra', promising biomarker data from patients suggest positive response rates, with the company aiming to release more detailed data at upcoming conferences. Key milestones for 2024 are declared, including the launch of a Phase II part of a key study involving the oral form of 'fadra' in patients with advanced solid tumors and lymphoma. The company is also preparing to share interim data from an initial cohort in a Phase II open-label proof-of-concept part of a study.
Looking ahead, the company intends to continue its advancement into Phase II stages with fadraciclib, alongside raising additional funds and exploring strategic options to broaden financial resources. They are positioning themselves for significant milestones including patient enrollment updates, data readouts, and presentations at key industry conferences in 2024.
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Good afternoon, and welcome to the Cyclacel Pharmaceuticals Fourth Quarter and Full Year 2023 Earnings Conference Call and Webcast. [Operator Instructions] Please note, today's call is being recorded. I would now like to turn the conference call over to the company. Please go ahead.
Good afternoon, everyone, and thank you for joining today's conference call to discuss Cyclacel's financial results and business highlights for the fourth quarter and financial year ended December 31, 2023.
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 Securities and Exchange Commission, which include, among other things, our Forms 10-Q and 10-K. 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. Brian Schwartz, Chief Medical Officer. Spiro will begin with an overview of our business strategy and progress. Brian will provide details on Cyclacel's clinical programs, and then Paul will provide financial highlights for the fourth quarter and full year 2023, which will be followed by a Q&A session. At this time, I'd like to turn the call over to Spiro.
Thank you, Grace, and thank you, everyone, for joining us today for our fourth quarter and full year 2023 business update. We are delighted to be joined on today's call by Dr. Brian Schwartz, who has recently joined Cyclacel as Chief Medical Officer. Many of you may know Brian, when he was CMO at ArQule, prior to the acquisition by Merck in 2020, at which time he joined our Board of Directors. He has extensive clinical and a product development experience, which will be instrumental in guiding our team to deliver key value inflection milestones.
We are pleased to report on the progress of fadraciclib, our CDK2/9 inhibitor, or fadra for short. Having recently discovered a potential precision medicine approach for fadra, we have determined the recommended Phase II dose, or RP2D, and are ready to start the Phase II proof-of-concept part of our 065-101 study. Taken together, our clinical and preclinical data suggests the hypothesis that patients with one or more chromosomal abnormalities, including CDKN2A/CDKN2B and/or MTAP, including deep deletions or loss of function may be sensitive to fadra.
In this part, we will evaluate patient cohorts selected for their mutational profile and/or Phase I activity in various solid tumors and lymphoma. We will initially focus on two patient cohorts with CDKN2A and/or CDKN2B abnormalities and T-cell lymphoma from both of which we saw Phase I signals of activity, including responses. We believe that there is great unmet medical need and industry interest in the cancer patient populations identified by these abnormalities, which are closely located on chromosome 9 and are often co-deleted. CDKN2A gene deletions occur in several solid tumors, including bladder, breast, endometrial, esophageal, glioma, head and neck, hepatobiliary, lung, including squamous, melanoma, ovarian, pancreatic and also in certain T-cell lymphomas. CDKN2B deletions occur in several solid tumors, including bladder, breast, cholangiocarcinoma, endometrial, esophageal, glioma, head and neck, hepatobiliary, lung, including squamous and mesothelioma, melanoma, pancreatic and others.
As mentioned in our press release, we expect 2 key data readouts for fadra this year. Final data from the dose escalation part of the 065-101 study at a major medical conference and later on, initial clinical activity from the Phase II proof-of-concept part. Also at the upcoming AACR 2024 meeting, independent investigators will present the clinical proof-of-concept data for fadra in various tumor types.
I will now turn the call over to Brian to review our progress in the fadra and plogo studies and discuss some of our clinical results. Brian?
Thank you, Spiro. We have dosed 47 patients in the dose escalation part of the fadra-065-101 study, of which 33 are evaluable for efficacy. We have completed dose escalation. And based on preclinical and clinical data have determined that dose level 5 or 100 milligrams BID dosed 5 days per week in a 4-week cycle will be our recommended Phase II dose, or RP2D. No dose-limiting toxicities have been observed at this dose level.
We have also observed CDKN2A/CDKN2B alterations, including loss of function in multiple pretreated Phase I patients with various cancers including gynecological, hepatobiliary, lung and pancreatic, who have benefited from fadraciclib monotherapy. These patient groups are associated with a high unmet medical need and often have poor clinical outcomes. An illustration of this is, we were excited to see shrinkage of 22% in the sum of all target lesions after 1 cycle of oral fadraciclib in a squamous non-small cell lung cancer patient with CDKN2B deletion refractory to standard of care chemotherapy and immunotherapy.
After retrospectively analyzing subset of previously treated Phase I patients who experience clinical benefit with fadra, we found an additional 5 patients with CDKN2A/CDKN2B alterations. These included an endometrial cancer patient, who achieved a CR and over 3 years on treatment in a previous study with IV fadra monotherapy and was found to have CDKN2A, CDKN2B and MTAP loss. We are also encouraged by Phase I anticancer activity observed in our T-cell lymphoma patients, including PRs in 2 out of 3 patients, a cohort in the part 2 of the 065-101 will evaluate patients with T-cell lymphoma.
Although the Phase I hypothesis-generating data are limited and cannot be generalized, we believe patients with these cancer types should be evaluated in the Phase II proof-of-concept part of the study. Initially, we expect to enroll 10 to 12 patients in each of the 2 cohorts with CDKN2A/CDKN2B alterations in T-cell lymphoma. We estimate that approximately 8 sites will take part in the Phase II and have completed several site initiation visits so we can quickly start enrollment and deliver results by the second half of 2024.
Let me now make a few remarks on our second program, plogosertib or plogo. In the 140-101 dose escalation study of plogo, we have enrolled 15 patients with good tolerability so far. Although we observed early evidence of anticancer activity in multiple patients, preclinical and clinical data suggests that the optimum dosing may be achieved with an alternative salt formulation of plogo, which has been under development. Additionally, independent groups have shown that certain ARID1A or SMARCA-mutated cancers may benefit from treatment with plogo. ARID and other mutations are found in several cancers, including bladder, endometrial, esophageal, hepatobiliary and colorectal. For these reasons, we have chosen to pause 140-101 study with the current formulation and resume dose escalation once a new formulation becomes available. Following assessment of bioavailability in patients, we will now be taking into account potential selection biomarkers for patients enrolling in 140-101 study.
I will now turn the call over to Paul to review the fourth quarter and full year results.
Thank you, Brian. As of December 31, 2023, pro forma cash and cash equivalents totaled $6.3 million, including $2.9 million of United Kingdom research and development tax credits received after the end of the year. Cash and cash equivalents as of December 31, 2023, totaled $3.4 million compared to $18.4 million as of December 31, 2022. Net cash used in operating activities was $16.1 million for the 12 months ended December 31, 2023, compared to $20.8 million for the same period of 2022. The company estimates that its available cash, including the United Kingdom research and development tax credit received of $2.9 million, will fund currently planned programs into the second quarter of 2024.
Research and development or R&D expenses were $3.5 million and $19.2 million for the 3 months and year ended December 31, 2023, as compared to $6.7 million and $20.3 million for the same period in 2022. R&D expenses relating to fadra were $2.7 million and $13.4 million for the 3 months and year ended December 31, 2023, as compared to $5.3 million and $14 million for the same period in 2022, due to a decrease in clinical trial costs, offset by an increase in manufacturing and other nonclinical expenditures. R&D expenses related to plogo were $0.7 million and $5 million for the 3 months and year ended December 31, 2023, as compared to $1.3 million and $5.5 million for the same period in 2022, due to a decrease in manufacturing and other nonclinical expenditures. General and administrative expenses for the 3 months and year ended December 31, 2023, were $1.9 million and $6.7 million compared to $2.1 million and $7.4 million for the same period of the previous year due to a decrease in professional fees.
Total other income net for the 3 months and year ended December 31, 2023, were an expense of $0.3 million and an expense of $0.1 million compared to an expense of $0.2 million and income of $1.7 million for the same period in the previous year. The decrease of $1.8 million for the year ended December 31, 2023, is primarily related to royalty income received in the previous year.
United Kingdom research and development tax credits for the 3 months and year ended December 31, 2023, were $0.4 million and $3 million compared to $1.6 million and $4.7 million for the same period of the previous year and are directly correlated to qualifying research and development expenditure.
Net loss for the 3 months and year ended December 31, 2023, was $5.3 million and $22.6 million, including stock-based compensation expense of $0.3 million and $1.5 million, respectively, compared to $7.4 million and $21.2 million, including again, stock-based compensation expense of $0.3 million and $1.5 million, respectively, for the same period in 2022.
Operator, we are now ready to take questions.
[Operator Instructions] Our first question comes from Ahu Demir with Ladenburg Thalmann.
Brian, welcome back. Great to see you back on the operational seat. I have 2 questions. First one is on the fadra program. You have 2 major data readouts you mentioned. For the Phase I portion of the data readout, are you going to disclose any of the PD biomarker data, including CDKN2A/CDKN2B or others? That's my first question.
Thank you very much for your question. I will answer yes. We intend to disclose [Technical Difficulty] PD data in the mid [indiscernible]. As we have heard in the remarks and the press release, we have 6 patients that have the specific genotype. We're very encouraged that these are the best patients as far as response. So that's clearly [ hematopoiesis ] generating data set and we'll look to share more with our investors when the conference comes.
Understood. My second question is on the plogo formulation. As the clinical studies are currently not ongoing, when do you think the formulation efforts will be completed and when do you think you will resume the clinical efforts? And also, when are we going to see the data -- clinical data from this program?
We will ask Paul, who is in charge of our manufacturing, for to comment on the first question. I will discuss the second one. Paul, over to you.
Yes. The formulation, the new oral formulation of plogosertib is ongoing. We've been doing it for a short while. So we'd anticipate about 6 months to complete that process.
As far as the clinical data, the second part of your question, to enroll 15 patients seen in clinical pattern shrink -- sorry, in tumor shrinkage and long-stable disease in fadraciclib patients. We need to be sure we can get to targeting [ different rows ] as we have the backup formulation on the alternative salt which gave us much higher exposures. We obviously need to go with that. That's the reason [ for us ] to pause the program in the same of improving the [indiscernible].
Our next question comes from Kemp Dolliver with Brookline Capital Markets.
So the press release and your transcript refers to the cash runway going into second quarter, which, as you know, is a short period of time away. So 2 questions related to that. I mean how far into the second quarter, can you continue operating? And then which milestones can you achieve between now and then?
Thank you, Kemp. We can [Technical Difficulty] 2024 as we expect 1 -- I think that these processes [Technical Difficulty] as far as raising additional funds as well as considering other options for the [ strategic fund ]. As far as announcing that concept, we expect to begin our work on our Phase II program, whereas [Technical Difficulty] the current Phase I or go into Phase II as a recent RP2D which will begin on in Phase II.
And the question when we see the abstracts from plogosertib in the middle of the year, which historically come out in the month before, so we expect to see those around the same time frame. Just to contain the Phase I data, the full Phase I data, including some [Technical Difficulty] on the pharmacodynamic profiles of patients, but not all of them because the cutoff was in winter, we expect to have some of the data in the public domain will be in this time frame.
We have no further questions at this time. I would now like to turn the call back over to the company for any additional or closing remarks.
Thanks, operator. And thanks to all of you for joining Cyclacel Pharmaceuticals fourth quarter and full year 2023 earnings call. Fadraciclib has achieved a key milestone and are ready start to Phase II [indiscernible] stage with important catalysts anticipated in 2024 and a strong competitive profile in therapeutic class.
As a reminder, our upcoming key milestones are: First patient dosed with oral fadraciclib in Phase II for [Technical Difficulty] part of 065-101 study in the patients with advanced solid tumors and lymphoma. For final data from those escalation stage from 065-101 [indiscernible] fadraciclib in patients with enlarged solid tumors and lymphoma. We report interim data from an initial cohort in Phase II open label proof-of-concept part of 065-101 study with oral fadraciclib in patients with advanced solid tumors and lymphoma. And independent investigators to report preclinical proof-of-concept data for fadraciclib at the American Association of Cancer Research or AACR annual meeting 2024. We look forward to providing you with further updates and also need some of you [indiscernible] our conferences. Operator, at this time, you may end the call.
Thank you, sir. This does conclude today's program. Thank you for your participation. You may disconnect at any time.