Celcuity (CELC) 14 Nov 242024 Q3 Earnings call transcript

Good afternoon, ladies and gentlemen, and welcome to the Celcuity Third Quarter 2024 Financial Results Conference Call.

[Operator Instructions]

This call is being recorded, November 14, 2024. I would now like to turn the call over to Aporva Chilori. Please go ahead.

Thank you, operator, and good afternoon to everyone on the call. Thank you for joining us to review Celcuity's Third Quarter 2024 Financial Results and Business Update. Earlier today, Celcuity Inc. released financial results for the third quarter ended September 30, 2024. The press release can be found on the Investors section of the website.

Joining me on the call today are Brian Sullivan, Celcuity's Chief Executive Officer and Co-Founder; Vicky Hahne, Chief Financial Officer; as well as Igor Gorbatchevsky, Chief Medical Officer, who will be available during Q&A.

Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements. These statements involve a number of risks and uncertainties, which are outlined in today's press release and in our reports and filings with the SEC. Actual events or results may differ materially from those projected in the forward-looking statements. Such forward-looking statements and their implications involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. On this call, we will also refer to non-GAAP financial measures. These non-GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the company's current performance. Management believes the presentation of these non-GAAP financial measures is useful for investors' understanding and assessment of the company's ongoing core operations and prospects for the future.

You can find the table reconciling the non-GAAP financial measures to GAAP financial measures in today's press release. And with that, I would now like to turn the call over to Brian Sullivan, CEO of Celcuity. Please go ahead.

Thank you, Aporva, and good afternoon, everyone.

We continue to make great progress advancing the clinical development of gedatolisib this quarter. Overall enrollment in VIKTORIA-1, our Phase III clinical trial evaluating gedatolisib plus fulvestrant with and without palbociclib in the second-line setting remains robust and on track.

We are very excited to announce that the PIK3CA wild-type cohort is 100% enrolled, an important milestone. It reflects the excellent execution by our clinical development and operations teams, and great support from the investigators at our sites.

And enrollment in the PIK3CA mutant cohort is on plan.

Our VIKTORIA-2 Phase III clinical trial that will be evaluating gedatolisib plus fulvestrant and a CDK4/6 inhibitor in the first-line setting, remains on track to enroll its first patient in the second quarter of 2025. And our Phase Ib/II trial evaluating patients with metastatic castration-resistant prostate cancer is ongoing and remains on track to report preliminary data in the second quarter of 2025. The primary endpoints for the VIKTORIA-1 clinical trial are progression-free survival or PFS and per RECIST 1.1 criteria, as assessed by blinded independent central review. The study is designed to independently evaluate a PIK3CA wild-type patient cohort and a PIK3CA mutant patient cohort with the PIK3CA wild-type cohort, there are 2 primary endpoints that will be tested hierarchically whereas the PIK3CA mutant patient cohort has a single primary endpoint primary analysis for each patient cohort is triggered upon reaching a predefined number of progression events with a PIK3CA wild-type patient cohort, the threshold number of events for both primary endpoints must be achieved before the primary analysis is triggered. Based on our current forecast of reaching the event thresholds that will trigger primary analysis, we expect to report top line data for the PIK3CA wild-type cohort sometime in late Q1 2025 or Q2 2025.

to report top line data for the PIK3CA mutant cohort in the second half of 2025. If the results from the PIK3CA wild-type patient cohort are positive, we would expect to file a new drug application or NDA with this data and follow up with a supplemental NDA, or sNDA, if the results from the PIK3CA mutant cohort are also positive. Obviously, the foundation of Gedatolisib potential future positioning will require the gedatolisib report a clinically meaningful median PFS benefit. Current median PFS benchmarks for patients pretreated with a CDK4/6 inhibitor are modest. Published reports of median progression-free survival for the SERDs range from 2 to 3.8 months and in patients with PIK3CA mutations ranges between 5.5 and 7.3 months for the AKT and [indiscernible] a inhibitors the 2 most recently approved therapies for this patient population reported between 2 and 3.5 months of incremental PFS benefit, the threshold KOLs generally considered to be clinically meaningful.

In addition, we've consistently heard from oncologists that they greatly prefer to delay use of chemotherapy or ADCs until the benefit from endocrine backbone regimens is exhausted.

We also think to get [indiscernible] safety profile may also favor its potential positioning in a future treatment landscape. Gedatolisib's treatment-related discontinuation rate was only 4% in the Phase Ib arm with the Phase III intermittent dose schedule which is comparable to the 6% to 8% discontinuation rates for the CDK4/6 plus fulvestrant regimens. These results compare favorably to the treatment-related discontinuation rates reported in the Phase III studies for alpelisib plus fulvestrant where 26% of patients discontinued and everolimus plus exemestane, where 24% of patients discontinued.

The results for gedatolisib are especially encouraging given that patients in the Phase Ib study did not receive prophylactic treatment for stomatitis. Since we are prescribing stomatitis prophylaxis in our Phase III trial, we would expect fewer stomatitis-related adverse events which would further enhance gedatolisib's already promising safety profile. We recognize that the treatment landscape is evolving with new potential therapies under development.

Our view is that the underlying biological drivers of HR-positive, HER2-negative advanced breast cancer will ultimately determine which regimens become standard of care, 3 interconnected signaling pathways, estrogen, cyclin D1, CDK4/6 and PI3K-AKT-mTOR promote this disease, and we believe that simultaneous blockade of all 3 of these pathways is required to optimize antitumor control. And this suggests that a triplet regimen that addresses these disease drivers, whether in the first or second line setting may have a long-term advantage versus a doublet regimen or monotherapy that addresses just 1 or 2 of these signaling pathways.

Additionally, a triplet regimen that could treat all patients regardless of PIK3CA or ESR1 status would have an even greater advantage. We believe that a triplet regimen that includes Gedatolisib is well positioned to establish this new standard of care, and we're optimistic that the VIKTORIA-1 data from our PIK3CA wild-type and mutant cohorts can live up to this potential. Feedback we're receiving from oncologists and market access stakeholders in conjunction with our preliminary commercial launch-related activities further reinforces our optimism about the potential for [indiscernible] Of particular note is the encouraging feedback received regarding gedatolisib IV route of administration. This preliminary research suggests that IV administration will not be a barrier to utilization of gedatolisib. And in fact, likely offers important advantages, particularly from a market access and adherence to therapy perspective. If gedatolisib ultimately does receive FDA approval for both the PIK3CA wild-type mutant populations -- we estimate the peak revenue potential for the second line and delayed indication alone could exceed $2 billion.

Turning to our VIKTORIA 2 study.

Our site qualification activities to support activation of up to 200 sites across North America Europe, Latin America and Asia are on track. We're very pleased with the interest we're receiving from our current VIKTORIA-1 sites as well as new sites that have expressed interest in participating in this study.

We expect these activities will allow us to enroll our first patient in the second quarter of 2025. The VIKTORIA-2 study is a global Phase III open-label randomized clinical trial, evaluating the efficacy and safety of gedatolisib in combination with fulvestrant plus a CDK4/6 inhibitor.

As a first-line treatment for patients with HR-positive HER2-negative advanced breast cancer who are endocrine therapy-resistant. Prior to the initiation of the Phase III portion of the trial, the safety run-in study will be conducted in 12 to 36 participants to assess the safety profile of gedatolisib in combination with ribociclib and fulvestrant.

Earlier this year, we dosed our first patient in our Phase Ib/II trial that is evaluating gedatolisib in combination with darolutamide in patients with metastatic castration-resistant prostate cancer. This study is ongoing, and we are on track to report preliminary data from this study in the second quarter of 2025.

Just recently in October, the Journal Cancers published results of our nonclinical studies in gynecological cancer cell line models, highlighting the differences between single node inhibitors of the PI3K-AKT inventor pathway and gedatolisib. The published manuscript is available online and on public -- on the Publication section of Celcuity's website. Results from these studies are consistent with the nonclinical studies we published earlier this year that evaluated breast and prostate cancer cell line models in all 3 tumor types gedatolisib demonstrated superior potency in cytotoxicity compared to single node PI3K-AKT-mTOR inhibitors.

In this December, we're looking forward to presenting 1 clinical poster and 2 nonclinical posters at the San Antonio Breast Cancer Symposium.

Our clinical poster will present overall survival data from our Phase Ib clinical trial that evaluated gedatolisib in combination with palbociclib and endocrine therapy. The 2 nonclinical posters will present data to further characterizes the mechanism of action of gedatolisib and its effect on key breast cancer cell metabolic functions. Overall, we're very pleased with the progress we made this quarter advancing the clinical development of gedatolisib. I'd like now to turn the call over to Vicky, who will review our financial results.

Thank you, Brian, and good afternoon, everyone. I'll provide a brief overview of our financial results for the third quarter 2024.

Our third quarter net loss was $29.8 million or $0.70 per share compared to $18.4 million net loss or $0.83 per share for the third quarter of 2023. Because these quarterly net losses include significant noncash items, including stock-based compensation and interest, we also included in our press release non-GAAP adjusted net loss for the quarter ended September 30, 2024.

Our non-GAAP adjusted net loss was $27.6 million or $0.65 per share for the third quarter of 2024 compared to non-GAAP adjusted net loss of $17.3 million or $0.78 per share for the third quarter of 2023. The Research and development expenses were $27.6 million for the third quarter of 2024 compared to $17.5 million for the third quarter of 2023. Of the approximately $10.1 million increase in R&D expenses, $6.3 million primarily related to activities supporting the VIKTORIA-1 Phase III trial the Phase Ib/2 prostate trial and the initiation of the VIKTORIA-2 Phase III trial. The remaining $3.8 million was related to increased employee and consulting expenses. General and administrative expenses were $2.5 million for the third quarter of 2024, and compared to $1.4 million for the third quarter of 2023. Employee and consulting-related expenses accounted for $0.9 million of the increase. Professional fees and other administrative expenses accounted for the remaining increase of approximately $0.2 million.

Net cash used in operating activities for the third quarter of 2024 was $20.6 million compared to $12.7 million for the third quarter of 2023. We ended the quarter with approximately $264.1 million of cash, cash equivalents and short-term investments compared to cash, cash equivalents and short-term investments of $180.6 million at December 31, 2023. The increase of $83.5 million in cash, cash equivalents and short-term investments was a result of several financing activities that occurred year-to-date through September 2024 and yielded net proceeds of approximately $138.3 million. The $138.3 million was partially offset by year-to-date operating cash used of approximately $55.8 million. I will now hand the call back to Brian.

Thank you, Vicky. Operator, could you please open the call for questions.

[Operator Instructions]

Your first question is from Maury Raycroft from Jefferies.

Congrats on the progress.

For the time line updates and clarifications around time lines, it sounds like it's primarily driven by event rate. Can you talk more about whether you have any additional insights into the event rate and whether there could be a relationship with patient baseline characteristics and just want to clarify if any of the shift was related to enrollment going slower than expected?

Maury, thanks for your question. We think that as we updated last quarter -- our last update, we -- that the higher proportion of mutated patients relative to our initial projection, 40% versus 35% had a corresponding decrease in the rate of enrollment for the wild-type population. We factored that into the event projection or the time line we provided in August.

And so the recent update relates to -- and it would only be a result of the rate of events occurring and so not related to change in enrollment.

We're actually a little ahead of where we thought we'd be when we reported in August.

And so as far as factors that could drive that is really not appropriate for me to comment.

I think the event rate is out of our control, and it's certainly a function of how the patients are responding to therapies. The events that we can track are only in aggregate for all 3 arms, we can't track them by endpoint.

So we really have limited ability to do anything other than track them and try to forecast when we think we'll cross over the line for those 2 primary endpoints.

Yes, that makes sense, and that's helpful. And also, I just wanted to ask you a question just based on the treatment landscape evolving with Roche's approval of inavolisib in combo with palbociclib and pilfesteran.

Just your thoughts on that for the frontline setting and how that approval could impact or effect use of gedatolisib in the second line, if approved for the mutation population?

Sure. Well, we think the study and the results were supportive of our hypothesis, which is that inhibition of all 3 of these pathways is beneficial and can significantly improve outcomes for patients.

As far as the impact on GET, our current indication or the indication we'd be seeking is for patients who are endocrine treatment sensitive. And these are patients who will have received a CDK4/6 inhibitor plus letrozole.

And so our forecast of the opportunity have been focused on -- or have been related to that population.

And so we don't expect that approval for inavolisib to essentially compromise or reduce the population that we're treating in the second line. our VIKTORIA 2 study though, will directly address the population that the Roche study was focused on the inavolisib study, except that our study will capture will enroll and 100% of the eligible patients were endocrine treatment resistant, whereas the [ RO ] study essentially only enrolled or treated what we estimate to be roughly 20% of eligible -- of the patients who would be considered to be endocrine treatment resistant.

Your next question is from Brad Canino from Stifel.

Thanks for the update. Maybe one heading into San Antonio. I noted in the press release, you've got an updated analysis. I want great to hear from you what the focus will be there. And then also at the conference, there's going to be a lot of data from oral SERD and CDK doublets, including a Phase II I'd just like to ask if you consider these to be potential new combination therapies that could compete with gedatolisib. And what are you keeping in mind as you plan to analyze the data from those at the meeting?

Sure. Well, at the San Antonio conference, we'll have a number of objectives. I mean one of them will be to present 3 posters and update folks on the extended follow-up we performed on the patients who were enrolled in the Phase Ib study and then continue to provide information that helps people understand the mechanism of GE and its impact on key metabolic functions. We'll also have objectives just related to general activities to support our 2 ongoing studies in breast cancer. But of course, we'll be tracking the data that comes out, the Phase III data for the oral SERD and then the other data.

Most of these studies are going -- seeking to treat a population similar to ours, so certainly very relevant to us, and we'll review the data accordingly.

I think depending on which patient populations get enrolled, you have to peel apart the baseline characteristics and depending on how they present the data, you'll need to do an assessment of the subgroups that maybe correspond to a true second line population that we're addressing, which is patients who receive the CDK4/6 or an aromatase inhibitor who have received prior CDK4/6.

And so that patient population is distinct.

Some of these trials will be enrolling patients who not have -- not had a CDK 4/6 inhibitor that will tend to make a difficult, difficult to interpret without assessing the subgroups, those who've received versus those who haven't received CDK4/6 inhibitors. And then there are certain characteristics that aren't necessarily representative of the type of population you might enroll in a Phase III study, for instance, patients with measurable disease versus nonmeasurable disease or evaluable versus non-valuable tumors. Those factors can create, have an impact on the response of patients to therapy.

So it's always important when you look at these studies and you try to do a cross-trial comparison to try to normalize the data as much as is possible to ensure that you're comparing like-to-like to the extent that the data is available to do that.

Next question is from Tara Bancroft from TD Cowen.

So I was hoping to get a better idea of expectations.

So first, I was hoping you could tell us what absolute MPFS number that you would like to see in the wild-type triplet and doublet to have the highest level of confidence in success in the mutant population as well. And then I guess also related to what Brian. My question for the control arm expectations, given that we have the [ Ember ] 3 data coming up at San Antonio, it would be great get your view on read through from that, in particular, in the control arm, even though it's investigator choice, but it does include fulvestrant.

So we've talked about this before with the post Monarch study, but how should we look at how the control arm performs and make any read there here.

Well, as far as what we'd like to see. I mean we'd love to see 2 years of meetings.

So I think what we think -- and really, it's not appropriate for us to provide a forecast. What we can do is just point people to the results we had in our Phase Ib study and point to the fact that in our Phase III study, we're enrolling a patient population that could be considered to have a more favorable prognosis in the patient population that was evaluated in the Phase Ib study. The patients in the Phase Ib study all had visceral disease, no bone only patients, 20% of the patients had prior chemo.

And the median duration of treatment of their prior treatment was around 13 months, whereas in the Phase III study, we're not enrolling patients who've had prior chemo in the advanced setting where we are enrolling patients who have bone-only disease as long as they have a measurable lytic, oolitic plastic lesion. And those 2 factors, again, tend to correlate to improved response to targeted therapies.

So net-net, we think we have a population that may certainly improve the odds of being able to replicate the data in the Phase Ib. And the Phase Ib data, we reported 12.9 months median PFS overall roughly 50% of patients were progression free who were wild type at 12 months, whereas 60% on the mutant setting were progression-free at 12 months.

And so we would hope to report results that were consistent with that.

As far as the expectations or what's needed to have a clinical impact we've spoken to as well as the community physicians, very kind of uniformly indicated that the 3-month median PFS delta relative to control would be meaningful. Certainly more is better than that, if that's possible.

And so the data will come out, and we'll see.

Now as far as what the thing about the control. In the past couple of years have been or 3 years, there have been 4 studies, 1 Phase III, 2 Phase III, 2 Phase II randomized that have evaluated fulvestrant in patients who've had prior CDK Three of the studies -- two of the studies reported 1.9 months meeting PFS for fulvestrant, on reported 2.1 months for fulvestrant and the other reported $3.5 billion. [indiscernible] a straight average or even a weighted average, taking into account the different population sample sizes, you find that the average results for fulvestrant in this population is about 3 months. where it ranges from 2% to 3.5%.

We think it would be very unlikely to see a result that was outside those boundaries going forward.

As far as number 3, I think from what I know about the eligibility criteria, they've included patients who have -- who are CDK 4/6 treatment naive as well as those who are CDK4/6 naive.

And so it will make the intent to treat MPFS reported difficult to interpret because for the most part, certainly in the U.S. and really in most of the developed countries, CDK4/6 treatment is standard in the front line.

So the results for a mixed population won't necessarily be useful for investigators that want to dig into the post-CDK patient results. And we'll see.

I think it would be unlikely given the other results that have been reported that we'd see results outside that 2 to 3.5 month range, but we'll know in a couple of weeks.

Our next question is from Chase Knickerbocker from Craig Hallum.

So Brian, just maybe as we're kind of obviously fully enrolled now in the first cohort in VIKTORIA-1 , maybe talk me through, obviously, you're going to have a lot of similar trial sites in VIKTORIA-1 talk me through kind of your enrollment expectations for that study. now that you have quite a bit of experience with what to expect from a lot of these sites from VIKTORIA-1 And again, kind of what you hear from investigators as far as kind of their excitement around VIKTORIA-2 and to give more patients got to [indiscernible]

Sure.

I think, a, very excited that the sites in VIKTORIA-1 that we wanted to partner with in this study of the VIKTORIA-2 study wanted to.

So we're essentially betting, I think, about 1,000 on that front. And we think that reflects their experience with Gena. -- so that's encouraging to us. And then the new sites that will be participating are familiar with the data that we've presented for the Phase Ib. They also are very familiar with the unmet need and the importance of coming up with options for these patients.

I think generally, first-line patient studies are considered to be easier to enroll. There are more patients.

They tend to have fewer comorbidities that could make them ineligible.

And so we think our enrollment rate for VIKTORIA-1 was very, very good relative to what has been reported for other studies.

So we're very encouraged by that.

And so we think it would be more likely than not that the enrollment rate for Victoria 2 would be at least as good or likely a little better than Victoria One.

So we'll see as we go. But we're on track to selecting the sites. We're on track to conducting the regulatory work that's required outside the U.S. so that we can get those sites activated and begin screening patients and on track to being able to get our first patient by the second quarter. so far, so good.

[Operator Instructions]

There are no further questions at this time. Please proceed with closing remarks. Thank you.

Well, thank you very much for participating in our call today for your ongoing support. We'll be participating in multiple upcoming investor conferences in November, and I look forward to interacting with many of you soon. I hope you have a great evening. Goodbye.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.