Cyclacel Pharmaceuticals, Inc. (NASDAQ:CYCC) Q2 2019 Results Earnings Conference Call August 13, 2019 4:30 PM ET
Paul McBarron - Executive VP of Finance, CFO, COO, Secretary & Executive Director
Spiro Rombotis - President, CEO & Executive Director
Alexander Fudukidis - IR, Russo Partners LLC
Conference Call Participants
Good afternoon, and welcome to the Cyclacel Pharmaceuticals Second Quarter 2019 Results Conference Call and Webcast. (Operator Instructions) The company will also be accepting a limited number of questions submitted via e-mail to the address, firstname.lastname@example.org. [Operator Instructions] Thank you. Alex, you begin your conference.
Good afternoon, everyone, and thank you for joining today's conference call to discuss Cyclacel's financial results and business highlights for the second quarter of 2019. 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. Judy Chiao, Vice President of Clinical Development and Regulatory Affairs. 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 second quarter of 2019, which will be followed by a Q&A session.
At this time, I would like to turn the call over to Spiro. Spiro?
Thank you, Alex, and thank you, everyone, for joining us today for our second quarter business update call.
Let us start by explaining our scientific and business strategy, which is to overcome cancer resistance to treatments. Cancer resistance proteins are central to the ability of cancer cells to evade the cancer therapies, which eventually lose their effectiveness. They often referred to as pro-survival proteins as they help cancer cells survive on to cancer therapy and gain an advantage over normal cells.
Suppressing pro-survival proteins, such as members of the Bcl-2 family, including Bcl-2 itself and Mcl-1 is, therefore, a promising strategy to create more effective therapies. Our business strategy is to combine our candidates with approved drugs in order to restore and enhance their effectiveness.
For example, venetoclax, the first approved Bcl-2 inhibitor is an important therapeutic advance. It is indicated for first or second-line CLL and first-line AML, in combination with a hypomethylating agent or a nucleoside analog. Venetoclax treated patients eventually stop responding and this is often correlated with elevated Mcl-1 levels or amplification. These findings have attracted a lot of attention in the scientific community and a competitive race is ongoing to bring to market drugs that suppress Mcl-1 with the aim of using them in combination with venetoclax.
We believe that Cyclacel is the leader in the race to address this problem of cancer resistance. CYC065, our CDK 2/9 inhibitor has demonstrated durable suppression of Mcl-1 at tolerable doses in patients with solid tumors. In 2 clinical studies, we are treating patients with relapsed refractory CLL and separately relapsed refractory AML or MDS with a combination of CYC065 and venetoclax. This combination strategy is supported by multiple preclinical studies showing that simultaneous suppression or a double hit of Mcl-1 and Bcl-2 enhances program cell death or apoptosis in cancer cells. Our clinical studies are designed to test the hypothesis that by applying pressure on both Mcl-1 with CYC065 and Bcl-2 with venetoclax can have meaningful antitumor effects against relapsed or refractory cancers.
We are excited to report that CYC065 has anticancer activity as a single agent in the First-in-Human dose escalation study of its compound. In part 2 of our 065-01 Phase I study of CYC065 as a single agent, a patient with previously treated endometrial cancer was found to have Mcl-1 amplification and tumor shrinkage was achieved after 2 cycles of treatments on the fourth dose level of 213 milligrams.
This is the first evidence of anticancer activity from a frequent dosing schedule of 1-hour infusions of CYC065 administered over 2 days per week for 2 weeks out of the 3-week cycle. As a reminder, in part 1 of the study, CYC065 was administered over a 4-hour infusion once every 3 weeks.
Following completion of development of an oral formulation of CYC065, part 3 of the 065-01 protocol has been open for approval with the aim of evaluating oral CYC065 dosing and pharmacokinetics. In the 065-02 study, the 2 previously enrolled patients with relapsed or refractory CLL who have failed ibrutinib front-line therapy are continuing on treatment for 4 and 6 cycles, respectively, with the combination of CYC065 and venetoclax, which was well tolerated. One of the main issues for CLL is that leukemia cells in the lymph nodes usually evade the effects of venetoclax causing eventual relapse.
Eradicating lymph node disease by the combination of CYC065 and venetoclax will be an important advance towards cure of CLL. We look forward to reporting updates from these patients as they become available.
Based on interest from additional sites to participate in this study, we're in advanced discussions with several hospitals and expect to open further sites in the next quarter or so.
Turning to our operating progress with other protocols, we recently announced that we have treated the first patient in a Phase I study, 065-03, evaluating CYC065 in combination with venetoclax in patients with relapsed or refractory AML or MDS.
Unlike CLL, where Bcl-2 overexpression is the main feature, in AML Mcl-1 plays a dominant role. The rationale for this study is supported by a preclinical evidence confirming synergy of CYC065 and venetoclax in inducing apoptosis for adjusting the double hit suppression of both Mcl-1 and Bcl-2, respectively, may be more beneficial than suppressing either protein alone.
During the quarter, we announced that first patients with relapsed or refractory AML or MDS have been dosed in Part 2 of a Phase I/II study 682-11 evaluating the safety and effectiveness of an oral combination of sapacitabine our nucleoside analog, in combination with venetoclax. The clinical data published at the 14th European Hematology Association Congress supports the combination of sapacitabine and Bcl-2 inhibitors in AML.
Based on prior clinical investigations, sapacitabine is active and induces complete remissions in AML and MDS that is relapsed or refractory to prior therapy such as cytarabine or hypomethylating agents. Venetoclax has accelerated approval as frontline therapy in AML, in combination with hypomethylating agents or cytarabine. Combining sapacitabine with venetoclax may, therefore, offer an effective oral treatment regimen for patients who have failed front-line therapy, while venetoclax is already approved.
Patients are being recruited to a First-in-Human Phase I dose escalation study, 140-01 of CYC140 our PLK 1 inhibitor as a single agent in patients with advanced leukemias. The first 2 patients have been dosed intravenous CYC140 at the starting doses of 16 and 32 milligrams per meter squared, respectively. No dose limiting toxicities have been observed thus far. CYC140 is a small molecule selective PLK 1 inhibitor that has demonstrated potent and selective target inhibition and high activity in xenograft models of human cancer.
All 4 of these studies 065-02, 065-03, 682-11, and 140-01 are part of our strategic alliance with MD Anderson Cancer Center with the objective of evaluating 3 Cyclacel candidates in patients with hematological malignancies. Under the terms of the alliance, MD Anderson assumes patient costs but Cyclacel remains sponsor of the studies.
Let us now turn to our second strategy to enhance the efficacy of standard of care by targeting inherited mutations in DNA damaged pathways, such as homologous recombination or HR-deficient cancers, which include those with BRCA mutations. The modest duration of clinical benefit to PARP inhibitors, the standard of care approved for BRCA mutant gynecological cancers suggest a need for novel drugs used in combination to improve disease control and extend survival.
Sapacitabine works by an HR-deficient relevant mechanism that is distinct from the mechanism of action of PARP inhibitors. Sapacitabine has demonstrated durable activity in BRCA-positive breast cancer, including a patient still on drug as to more than 6 years.
Recent clinical data with sapacitabine reported at the 2019 AACR provides the rational for an ongoing combination investigator sponsor study or IST of orally dosed sapacitabine and olaparib, the leading PARP inhibitor approved for breast and ovarian cancer. The IST is enrolling PRAP inhibitor naÃ¯ve patients with BRCA-mutant breast cancer and is sponsor for the Department of Breast Cancer at the Dana-Farber Cancer Institute. Cyclacel and AstraZeneca are supplying sapacitabine and olaparib respectively.
According to the investigators, a total of 4 patients, BRCA-mutant breast cancer, have been treated and 1 patient has achieved the partial response or PR. Two patients are continuing on treatments.
In summary, as we continue to execute on our strategy and advance our clinical development programs, our key milestones includes, report initial data from the CYC065 venetoclax Phase I studies in relapse refractory leukemias. Report initial data from the sapacitabine venetoclax Phase I/II study in patients with relapsed or refractory AML or MDS. Report initial data from the CYC140 Phase I First-in-Human study in relapsed or refractory leukemias. Report initial data from the Phase I study of an oral formulation of CYC065, report updated CYC065 Phase I data with frequent dosing schedule in patients with advanced solid cancers, report data from the IST Phase Ib/II trial of sapacitabine Olaparib combination in patients with BRCA-mutant metastatic breast cancer when reported by the investigators and determine regulatory pathway and submissibility of sapacitabine in elderly AML patients.
With capital on hand, estimated until the end of 2020, we have the resources to take us through key clinical milestones in our ongoing clinical studies.
I would now like to turn the call over to Paul to review our second quarter 2019 financials. Paul?
Thank you, Spiro. As outlined in today's press release, for the quarter ended June 30, 2019, our cash and cash equivalents totaled $15.2 million compared to $17.5 million as of December 31, 2018. The decrease of $2.3 million was primarily due to net proceeds from a common stock sales agreement with H.C. Wainwright of $4.1 million, offset by net cash used in operating activities of $6.3 million.
Research and development expenses were flat at $1.2 million for the 3 months ended June 30, 2019 and 2018. General and administrative expenses were $1.2 million for the 3 months ended June 30, 2019 compared to $1.3 million for the same period in 2018. Other income net for the 3 months ended June 30, 2019, was $0.3 million compared to $0.1 million for the same period of the previous year. The United Kingdom R&D tax credit was $0.3 million for the 3 months ended June 30, 2019 compared to $0.5 million for the same period in 2018.
Net loss for the 3 months ended June 30 was $1.8 million compared to $1.9 million for the same period in 2018.
With the projected cash sparing benefits accruing from the MD Anderson Alliance, the company believes that cash and marketable securities, which were approximately $15.2 million as of June 30, 2019, [Technical Difficulty] of 2020. Operator, we are now ready to take questions.
Thank you, operator, and thank all of you for your participation in Cyclacel's Second Quarter 2019 Earnings Call, and your ongoing support of our efforts to develop medicines to address cancer resistance and improve existing treatment options. We look forward to updating you on our progress and meeting some of you at upcoming conferences. Operator, at this time, you may end the call.
Thank you, ladies and gentlemen, this does conclude today's conference call. You may now disconnect.