Cyclacel Pharmaceuticals' CEO Presents at Lazard Capital Markets 9th Annual Healthcare Conference (Transcript)

Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC)

Lazard Capital Markets 9th Annual Healthcare Conference Call

November 13, 2012 9:00 am ET


Spiro Rombotis – President and Chief Executive Officer


Ryan Martins – Lazard Capital Markets LLC

Ryan Martins – Lazard Capital Markets LLC

Hi, good morning. I’m Ryan Martins, Biotech analyst here at Lazard Capital Markets. Our next presenting company is Cyclacel Pharmaceuticals and to give us an update on the company I have Dr. Spiro Rombotis. And just to give you a little brief on the company, they have their lead drug sapacitabine and a little SEAMLESS trial, in elderly AML patients that usually had survival positive data reported from their high risk MDS study with sapacitabine.

Spiro Rombotis

Thank you very much, Ryan and good morning to all of you. Thank you to Lazard for the invitation to present one more year in your conference and also a warm welcome to those of you listening via webcast. Before I start, I would like to remind you of the usual disclaimer regarding forward-looking statements and refer you to our regulatory filings with the SEC.

So sapacitabine as we just heard in the introduction is a rare unusual drug. It is the only drug in its landscape of blood cancers to be available by the [oral route]. It is well tolerated and have demonstrated the potential for being given to patients as a multiyear maintenance regimen, it’s certainly rear in the setting.

There are two late stage studies underway with these agents and a number of near-term catalysts that will give us more opportunity to understand its unique mechanism of action and promise to patients with these very intractable diseases.

It is the highly differentiated agents from the class of compounds we are used to seeing in this hematologic malignancies landscape and if approved it will constitute significant comparative barriers to entry given this profile.

Our mission is to convert AML to a chronic disease in other words take an acute disease with the median survival if untreated around three months in the oldest population and take it to the chronic setting between six and 12 months if not more.

There is significant market opportunity in this landscape, which is not just calculated by the number of patients but by the number of cycles looking in the drug given that the majority of the agents today are given for very short windows.

Perhaps the best known program that sapacitabine is engaging as we just heard is the SEAMLESS trial, this is a Phase 3 study being conducted under SPA agreed with the FDA about two years ago now. And as we heard most recently we had exciting data come out in the second-line setting of MDS. This is the high risk population who failed the front-line drugs called hypomethylating agents or HMA for short.

We also have some early stage, but I think particularly engaging data in the setting of solid tumors that portrayed for the first time the chance push sapacitabine to be developed as a targeted agents.

Perhaps to understand a little better the setting of hematologic malignancies, I would like to take you through what we perceive to be a disease continuum. We probably know that MDS is sometime referred to as preleukemia or smoldering leukemia and then the green wedge who are the patients that have (inaudible) who are typically get to be treated with lenalidomide, which is of course a very important therapeutic advance in this setting.

Now five (inaudible) patients may get this drug but those that do not have (inaudible) called high risk and they were almost certainly be offered the front-line agents in the high-risk population, which are azacitidine and decitabine. These agents halt activity, a major therapeutic advance in the setting of high-risk MDS, unfortunately we have limited durability of action and many patients are going to benefit. So we are interested in exploring in the second or third line setting sapacitabine’s potential in this population.

Now by definition, once a patient blasts in the bone marrow, exceed 19%, so the 90% of the cells in the marrow are actually leukemia cells, once that threshold exceeded, the patient is called he is being to have been transformed, and he is called to have leukemia. So the threshold between MDS and leukemia is just the convention number of blast in the bone marrow. These are indeed related diseases.

The patients in the gray wedge who have secondary leukemia, secondary AML from a pre history of MDS, but have not necessarily, had the same disease, as those that are on the purple wedge because the first group have seen the hypomethylating drugs or HMAs as their front-line therapy before they transformed into AML.

There are differences in both prognosis and survival between these grey and purple wedges. People that have not seen HMAs, typically have rapidly progressive disease as the HMA makes several replication cycles to work, the physicians typically may judge if this people too far advanced, the disease is too far progressive, in order to be rescued by the intervention with these agents who will be put into clinical trial, which is the standard of care (inaudible) in the United States at the moment in AML.

And we’re happy about the AML de nova, we will have a very high number of blats between the marrow and have not had a history of disease. These are the last two groups that we are enrolling in the SEAMLESS study and we’re exploring the other two both the secondary AML, without HMA and the second line MDS in Phase 2 studies, which are either have been reported or soon to report.

First, talk a bit about the AML landscape, and why despite the number of years of efforts by the industry we have had no innovation in this space till 1969 when sapacitabine was introduced.

First of all, age matters, people get older, they die faster. So prognosis is much worse for people above 60, far worse above 65 and the worst for all above 70 and this is the group that we choose to enroll all of our clinical trials from Phase 2 onwards including the SEAMLESS study. And there are reasons for that, they have to deal with the relative ability of the compound as well as the fact that these patients are well unlikely to be offer transplant, and we potentially confound the survival benefit the drug may confer.

Now when we give to these patients intensive chemotherapy, they tend to have poor survival, around 4.6 months is the median OS in previously reported studies for the same age cohort above 70. Even if you give them not a cocktail, but one drug only in low dose chemotherapy, the survival doesn’t get much better. And of course, we will let them alone to go home or to a [hospiz] and die they tend to do so within 3.6 months.

So the landscape needs new treatments that not only can achieve better survival, but can do so by durable treatment. There is typical ara-C based regimen that given for one, maybe sometimes rarely two cycles. We are willing to clearly be able to give the drug for four or five months to have a chance to move survival to the right and we showed that drug which is causing that, not other factors that can confound the benefit.

But in Heterogeneous Diseases, the important drug developers’ challenge is to design trials that can drive the reduction of the risk of the compound that we have the ratio to a level of the 20% to 30% in order to have a meaningful impact on survival. This is the threshold of important that we face in the industry to have not only a safe anesthesia drug, but clinical relevant data that we will confirm (inaudible) get paid for.

The market opportunity for sapacitabine is dramatic in the setting of the AML, given the absence of competition in the front-line. To understand this, you need to take the 16,000 U.S. prevalence number divided by half to look at the on-label population above 70 and then estimate that the patients who are eligible for SEAMLESS those in the unfit or refused intensive chemotherapy bucket are in the range of 80% for the front-line market. So more than 60,000 patients would be inside our label box in the upper right quadrant.

There are large number of drugs clustered in the lower left quadrant in the relapsed/refractory setting. Our population is about 1000 patients, the initial 16,000 were not qualified by age. But it’s only about 20% of patients who actually go and get treatment intensive chemotherapy. And they might have a computer emission on the chemo before the [leader] emission become eligible for the relapsed/refractory.

So at the moment sapacitabine is alone in the setting of the upper right quadrant front-line treatment for the unfit or refused intensive chemo population.

In objection to be the only oral drug in the space and being well tolerated and of course our deliberate decision to take into the patients aged above 70, where we would have the worst prognosis hopefully in the control arm and that will have a faster clinical trial. This is a Phase 3 program that is based on Phase 2 data that have studied the relevant end points that we use in Phase 2, which is overall survival.

Many sponsors over the years have used computer emission as an interim end point to qualify a drug to move from Phase 2 to Phase 3 and have found disappointment that CR does not predict for survival. In fact, in AML the challenges to further [leader] between finding the right balance between intensive treatment so that we can cure enough leukemia cells and give the patients chance to recover, but also not clearly enough normal cells, so the counts can come up. And to give the balance right, it requires randomized Phase 2 studies.

But we tested several schedules of our drug to find that which one achieved the right balance between the two. (inaudible) question and one that I am sure the FDA has asked many sponsors to consider, we listen to their advice conducted a robust Phase 2 program (inaudible) schedule and that is why perhaps we were able to earn a spot. The mechanism of action of sapacitabine is unusual, perhaps unique in its class of nucleoside analogues. It is been rarely published, particularly by Will Plunkett in Houston, Texas, but the drug works about a homologous recombination repair pathway, one of the major DNA pathways in cancer cells, which make those cells immortal, what the drug in (inaudible) does it jams the ability of the cancer cell to find the ways to avoid the effects of treatments and become eventually resistant.

Now we are not the only ones who believe that it is possible to use a drug like sapacitabine to change the paradigm of AML from acute disease if I able to confess into a chronic condition and in fact that our program has been champion for many years, but the Chairman of Leukemia, MD Anderson have got contagion who made this extraordinary statement at this conference some five years ago, but this drug is one of the most exciting agents in development for AML and sapacitabine which was lost in 1969. So an extraordinary statement that we have been very humbled by and are trying to hopefully prove him correct by the totality of our efforts.

So the Phase 3 study will now underway with SPA indenting to test the Cocktail, the alternative regimen of the cytarabine and sapacitabine, those are the cytarabine control. We cannot use placebo in this disease, it’s unethical, nobody will sign up. We have to use active control and sapacitabine is approved and available in Europe for AML and approved for MDS in the U.S. but reimbursed in the treatment of AML.

The design in developing and consultation with FDA, a number of clinical advisors under the SPA and it require a lenient study in a total of 46 patients, while age required by the agency to test the A Arm of SEAMLESS, the alternative schedule of sapacitabine to cytarabine and achieve at least as good as fix the mortality outcome in the early read of efficacy as chemotherapy is known to confer, which is 37%.

We reported in October 2011, 12%, 60-day mortality comfortably, meeting the FDA’s requirement on the basis of which the study DSMB in accordance with this chart put and the provisions of our SPA allowed us to open the randomized portion of the study, which began just under a year ago.

We announced yesterday in our earnings call that we crossed a few weeks ago, 100 patients enrollment, which is very gratifying to see for a new study, particularly given that over the last seven months, the future of Dacogen in its regulatory prosecution the U.S. wasn’t great doubt and it remains unapproved after failing to convince ODAC and regulators in February of this year.

Nevertheless, the importance of this remains a protocol that investigate across the U.S. in 36 centers are supporting. We continue to enroll while and the study appears to be accelerating. Our goal is to reach 212 events before the data becomes mature for a security look. There is very little alpha spend in this study, so the P-value we have to beat is P equals or less on 0.05 minus a very small three digit decimal charge for the detail outlook.

The Hazard ratio in the study is 0.725, which translates into reduction in the risk of death were approximately 27.5%; this is the threshold of significance we have to beat in order to have success in the trial. We have some early indicators to understand what are these studies heading in the right direction and is it getting into the potential zone that we feels comfortable to convince something into invest and that is based on the original cohort of 25 out of 46 patients who enrolled into our pilot study per the SPA.

We reported at ASH last year in December 2011 that this population achieved a median overall survival of 8.5 months in the old patients above 70, the entirety of our Phase 2 and Phase 3 data set.

If we look at the population, 77% of those patients are above 75 years of age, they are even older (inaudible) area. And if you compare to the FDA presentation of the Dacogen data, from the Dacogen versus low-dose cytarabine Phase 3 trial reported at ASCO 2010, that was received by ODAC in February of this year, we see that in the same setting, the same age cut off, Dacogen median overall survival which will hopefully mirror our Phase 3 control Arm experience in the range of six months.

Just to remind you that six of the mortality numbers for Dacogen alone are in the 20s. As with sapacitabine alone which allows to make the very important point that just with the terms of chemotherapy, gives too much of this Cocktail 50 or drugs, the same thing is to Dacogen or sapacitabine alone. If you keep giving those drugs every cycle, although remain beat the blast cells and reduce leukemia in the bone marrow, may also destroy enough of the immune system, so the patients takes longer to recover.

So count recovery is delayed, this is not optimal. So the perhaps innovative concept of alternating in one cycle of the cytarabine, keeping the cells in check when giving sapacitabine was a bit more active achieving a bit more ablation, reduction in blast cells, but then by also letting the intensity of the cytarabine giving counts, a chance to recover maybe one of the explanations of why was it different in six of the mortality and hopefully in the future in the entire Phase 3 study.

So given the same drug intensively, metronomically, as physician say, maybe some optimal to alternating, but at the same time, covering the patient with something else in between cycles of investigational agents.

Now this is the plot that we showed that ASH 2011, this is the couple of my plot, showing that first 25 patients as you can see the median OS is about 8.5 months, but of course the absolute statistic, a 50% of that’s going to misleading.

You give the shape of the curve that we need to consider and whether this gives us any insight as to whether the chance of the trial to be successful is still there. As the time of the data we are shown, this was much where you can see by looking at the ledge on the right hand side of the trial of the curve about 44% of patients were still alive. So this is subject to change, you will see more death recorded, but curve is about to trend downwards.

At this year at ASH, we will be reporting on debate, not only on this curve, but on the entire population of 46 patients, so nearly twice the patients were done by our follow-up, so the ex-factors will go out monthly not to 500 days, but to 800 days.

So the important understanding here is the issue of tail, particularly out in the critical one to two year window, but we don’t see in the reference data that was presented to the (inaudible) by the FDA in February of this year.

Here in this slide, the FDA review ourselves, this is a couple of myeloid comparing the data that was just inside that have been along in the same industry management we are using in SEAMLESS and the both of Arms was low ara-C in the new curve.

As you can see the red curve, which is Dacogen, they are gone up really to have detail in the critical runway between 12 months and 24 months. And this is indeed the influence we are called up on to make to understand where the SEAMLESS is getting direction, who will provide the answer in the first weekend December Elias Conference when that data comes out.

Let me now quickly cover the landscape of MDS; this is an important area of change our mathematical need, the market size here is about five times up on the on-label market sizes have celebrated in AML, why. Based on J.C. L Paper published in 2003, 45,000

Americans aged 65 years older, filed for Medicare claims in the Medicare database with the diagnosis of high risk MDS. And the American Cancer Society, tell you that, we only have 20,000 patients with MDS, that can’t be right. The leader in the office explains in discrepancy is that the ACS database looks on in hospitals, these are physicians often treated disease and a new disease is about six years old, we haven’t really been aware of it before.

So the advent of new agents where this lenalidomide and the low risk (inaudible) population or Decitabine in the high risk leaves a huge amount of our Medi claim need and the majority of the patients do not have benefit in the high risk population to the hypomethylating drugs.

We do have a sudden benefit of nine months for azacitidine, probably similar, although we are not confirmed for Decitabine, but most of the patients population are not benefiting from HMA therapy and this is the group that investigate in our clinical trial in Phase 2 with sapacitabine and not just if it failed either or of these drugs. We know from the literature that the million survival of these patients are between 4.3 months when the sales of Decitabine and 5.6 months when the sales of azacitidine.

In fact in our study where many patients that have actually sales, not only either or about half of sales of azacitidine a third, have sales of Decitabine, but also 25% of the above and 16% with triple refractory, because they also sale lenalidomide either they did not have decided dilution. Those were too high risk patients, so a much sicker population of patients. And we showed in this group median survival of eight to 10 months.

And in meeting the group that have the highest blood group, blast between 10% to 19% which is the worst we’ve put in MDS, which are even better survival in excess of 10 months, which is coming as a story, but consistently across data sales sapacitabine and this disease continuum appears to have activity to a level that has is unprecedented.

And this is true for the entirety of our data set in blood cancers, where as AML although it is patients were untreated, we lost for this MDS single or double, triple refractory, the same consistent message appears to be in all the data. Once these patients appears to have benefit exceeding a year survival.

And we also seem to have similarly consistent meeting all those survival and impressively SCR rate for second and further fourth line if MDS, but is the same the SCR rate you are talking about, and the registration study in the frontline, which makes the point that we don’t have the same mechanism.

So to summarize, there might be a molecular profile, a gene targeting mechanism for DNA pair come all through combination pass way here, which may explain the sensitivity of patients whether they have MDS right and out of this drug..

There are place to be emerging in the solid tumor side, where the entirety of the PRs or partial responses whether the breast, lung, ovarian cancer perhaps even in lung, we have PRs. It’s attributable to the backup positive chemo type of these patients. Its early data, the broke out, one and two of the major mediators of resistant for the HRR pathway, that’s the major HR defects, but we’re potentially purvey chemo-sensitive patients with sapacitabine’s mechanism.

So I’ll complete and open for questions based on our forth coming milestone, we just announced the AML Phase 2 data that were published in Lancet Oncology. We had a normal update which took place yesterday. We have that ASH deal, pilot and leading update in [Cupola Myer Club] survival update will have data from the UK cooperative trial that was just supposed to come late this year, early next year. We will have Phase 2 data MDS fully published in early 2013, and we will give an update on our evaluation of the Baraka finding most likely as called next year.

Now unrelated to the sapacitabine, we have an IP litigation matter relating to CELG MS drug, Romidepsin or ISTODAX; this is a (inaudible) state that we inherit via acquisition, which is in the Delaware Court of Chancery going through different stages of litigation: the courts scheduling order that was there is Markman hearing next March followed by client construction hearing from the judge, which is not resolved by supplement earlier, we take us through a seven day jury trial in June of 2014.

This is not involved in Cyclacel drugs. It involves surgeons drug that we believe we have a less infringement based on its approval in CTCL and PTCL in the United States.

So to summarize, we are a novel cell cycle biology based company, we believe in sapacitabine, we have an exciting drug with great potential, certain in blood cancers, possibly in a small subset of (inaudible) solid tumor patients.

We have a number of other drugs, most of which are not being developed for lack of resources et cetera (inaudible) expired that we just announced the grant from the UK government of just under $2 million to allow to push it forward into I&D and continue to project cash through 2013. I have been just reported $18 million on the balance sheet at the end of Q3.

So with that, let me open the floor for a few questions.

Question-and-Answer Session

Ryan Martins – Lazard Capital Markets LLC

Maybe I can started one (inaudible) clearly the drug seems to be more active with the more severe disease in these patients. Would you attribute that primarily to the better tolerability of the drug or there are other sites beyond that?

Spiro Rombotis

It’s an excellent question. And I don’t even now specifically the answer, but I will go back to the teachings by our founding scientist David Lane and David Glover to which 16 years later I am still learning, and still becoming conversion. And they have been teaching us that the whole concept of cell cycle modulation, which is captured on above price 2001 from medicine and physiology, that the high of the damage that a cancer cell has actually sustained into DNA, and how vulnerable they are to these control mechanisms.

Consequently a cell that has higher proliferative potential rapidly progressive disease, galloping disease is more vulnerable, easily explained why as you correctly point out, we will see better activity for this drug in higher blast populations, because higher blast probably portrays higher amount of DNA damage acquire about from these cells of our server applications; the least amount of damage needed the cell may escape, may be pulse DNA and then go back into cycle, but still have arrows in the DNA, but passed it ourselves, propagating potentially two more [agenic] signal in later generations.

But the higher damage the cell have, the more vulnerable it becomes for this mechanism and this is particularly fascinating for those of us who are doing be oncology for a long time, because we typically have been trained to give drugs at the MCD. But this drug has given well below of half of the MDT, so it is not as at toxic in the classical sense, the self back modulator and exactly the point that you raise but that’s what portrays to a high benefit group that would increase the chance of success in future class.

Ryan Martins – Lazard Capital Markets LLC

Okay. Any questions from the audience?

Unidentified Analyst

Maybe sure you can let us know from the pilot survival club that we’re going to see at ASH, what could be the takeaways on that, obviously you can talk about the data, but particularly given that you are obviously randomizing the best of the trial?

Spiro Rombotis

Yeah, of course the patients in the pilot leading portion of 46 do not count in the normalization. We have got FDA (inaudible) that is part of Respa. So this is just informational, it satisfy the FDA safety question, that was answered by October last year, but the question that line up I think you raising is particularly in tricking, because of course the question is, can we infer from the shape of the curve the pilot what the full curve in the randomized portion that’s probably will look like for the active on A of the study.

And I think the same expectations, we will be disappointed if we saw that curve trend down in the same almost negative decay pattern that we see with Dacogen, because it counts as in virtually all AML [myoblast cell] may be a dozen studies done over the last few years that will don’t have a durable benefit. Either we see a percent population, certainly using 10% will be encouraging, 20% would be exciting that appear to have a sustaining benefit, particular threshold window where everybody falls off therapy between one and two years of follow-up and this drug is unusual and the tail effect maybe just enough to drive and have a ratio we need to win.

If you look at most of the drug roll into cytarabine data showed we actually reviewed they get lucky to have separation that can plot in the middle so that we reported a nominal improvement in the survival of 7.7 months versus 5 months. But that wasn’t significant, because the curve isn’t separating consistently throughout its travel and then stay separated towards the end.

If we see this pattern for sapacitabine pilot study, I think we can conclude that this study is going in the right direction. Of course, I will caution you that Phase 3 study of notorious were looking good early and change later or the inverse. So you won’t know until the actually how to run the study. But we as possible and conservative drug developers will have to ask every possible question we can or we look at (inaudible) data like in past.

Ryan Martins – Lazard Capital Markets LLC

Okay. Thanks.

Spiro Rombotis

Thank you very much.

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