Yahoo Finance Celcuity Inc. (NASDAQ:CELC) Q4 2023 Earnings Call Transcript
Celcuity Inc. (NASDAQ:CELC) Q4 2023 Earnings Call Transcript March 27, 2024
Celcuity Inc. beats earnings expectations. Reported EPS is $-0.65, expectations were $-0.71. CELC isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good afternoon, ladies and gentlemen, and welcome to the Celcuity Fourth Quarter and Year-End Financial Results Conference Call. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. [Operator Instructions] I would now like to turn the conference over to Maria Yonkoski with ICR Westwicke. Please go ahead.
Maria Yonkoski: Thank you, Operator, and good afternoon to everyone on the call. Thank you for joining us to review Celcuity's fourth quarter and full-year 2023 financial results and business update. Earlier today, Celcuity released financial results for the fourth quarter and full-year ending December 31, 2023. 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; Vicki 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 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.
Brian Sullivan: Thank you, Maria, and good afternoon, everyone. In 2023, we made significant progress advancing development of gedatolisib, while strengthening our balance sheet and adding to our leadership team. Our Phase 3 VIKTORIA-1 trial remains on track to report top line data from the PIK3CA wild-type patient subgroup in the second-half of this year and top line data for the PIK3CA mutated patient subgroup in the first-half of 2025. We were also excited to begin development of gedatolisib for patients with metastatic castration resistant prostate cancer this past year. Enrollment has begun in our Phase 1b/2 trial evaluating gedatolisib in combination with darolutamide, and we look forward to sharing preliminary data from this trial in the first-half of 2025.
Our VIKTORIA-1 Phase 3 clinical trial is designed to evaluate gedatolisib in combination with fulvestrant with and without palbociclib in patients with advanced hormone receptor positive HER2 negative breast cancer, whose disease has progressed after treatment with a CDK4/6 inhibitor. We're seeking to improve outcomes for this patient population, which today receives only limited benefit from current second-line standard-of-care therapies. We estimate that this initial potential target population represents over 100,000 breast cancer patients globally on an annual basis. Current standard-of-care for these patients includes endocrine therapies, such as fulvestrant and regimens that combine fulvestrant with an mTOR-specific or PI3K-alpha specific targeted therapy.
These therapies only offer modest progression free survival periods, and in the case of the approved PI3K-alpha inhibitor, a very challenging safety profile. Significant unmet need for these breast cancer patients has led to development and subsequent investigation of a significant number of new therapies, an oral SERD for patients with an ESR1 mutation, an AKT inhibitor for patients with a PIK3CA or AKT mutation was recently approved. Median Progression Free Survival or PFS for these two new therapies ranged from 3.8 to 5.5 months respectively, in the same patient population our Phase 3 trial is enrolling. While the availability of new drug alternatives for patients is always good news, based on the results reported for these drugs, the unmet need for these patients will still remain.
To further elucidate the different therapeutic effects of gedatolisib versus other PI3K, AKT, mTOR or PAM inhibitors, we performed a series of non-clinical studies using breast cancer cell lines. We presented the results of these studies during a poster session at the 2023 San Antonio Breast Cancer Symposium. In a panel of 28 breast cancer cell lines, gedatolisib was found to be more cytotoxic, and at least 300-fold more potent on average compared to the single-node PAM inhibitors. Mechanistically, gedatolisib decreased cell survival, DNA replication, protein synthesis, glucose consumption, lactate production, and oxygen consumption more effectively than the other PAM inhibitors. In vivo studies confirm that pan-PI3K/mTOR inhibition by gedatolisib reduced tumor cell growth more effectively than single-node inhibitors in breast cancer patient-derived xenograft models with and without PAM pathway mutations.
We believe gedatolisib's highly differentiated mechanism of action as an equipotent pan-PI3K/mTOR inhibitor is uniquely suited to most effectively address this unmet need, especially since gedatolisib has demonstrated activity independent of the PIK3CA or ESR1 mutational status of a patient's tumor. The results from our Phase 1b study and patients receiving the Phase 3 dosing schedule for gedatolisib in combination with palbociclib and fulvestrant, was very promising. Median PFS was 12.9 months, and the objective response rate was 63%, both of which compares very favorably to published data for current standard-of-care regimens. Another important goal for us in 2023 was to begin development of gedatolisib in a new tumor type. In the fourth quarter, we initiated a Phase 1b/2 clinical trial to evaluate gedatolisib in combination with darolutamide, which is a potent androgen receptor signaling inhibitor, in patients with metastatic castration-resistant prostate cancer.
We enrolled our first patient in the study in February, and we expect to report preliminary data in the first-half of 2025. Treatment options for these patients are limited, and there's an urgent need for new drugs to treat them. Numerous preclinical studies have demonstrated interaction between the androgen receptor and PAM pathways, suggesting that combining a PAM inhibitor with an androgen receptor inhibitor may induce a synergistic anti-tumor effect in patients with prostate cancer. There's also compelling clinical evidence with an earlier generation PAM inhibitor providing a proof of concept of our hypothesis that combining gedatolisib with an androgen receptor inhibitor may be efficacious. And finally, as we get closer to having data for the PIK3CA wild-type patients in our Phase 3 breast cancer study, we need to begin laying the commercial and marketing groundwork necessary to bring gedatolisib to the clinic.
To head up our commercialization efforts, Eldon Mayer joined our management team as our chief commercial officer in February. Eldon has over 30 years of biopharma commercial experience in companies ranging from early-stage biotechs to full-scale pharmaceutical companies across many therapeutic areas, including oncology. Eldon's an exceptional leader with a proven track record of building commercial organizations from the ground up to support the launch of a biotech company's first drug. And with that, I'll turn the call over now to Vicky Hahne, our Chief Commercial Officer, to review our financial results.
Vicky Hahne: Thank you, Brian, and good afternoon, everyone. I'll provide a brief overview of our financial results for the fourth quarter and full-year '23, and I invite you to review our 10-K, which will be filed later today for a more detailed discussion. Our fourth quarter net loss was $18.8 million, or $0.69 per share, compared to $11.6 million net loss or $0.69 per share for the fourth quarter of 2022. Net loss for the full-year of 2023 was $63.8 million, or $2.69 per share, compared to $40.4 million net loss, or $2.64 per share for the same period in 2022. Because these quarterly and full-year net losses include significant non-cash items, including stock-based compensation and non-cash interest, we also include in our press release non-GAAP adjusted net loss for the quarter and full-year ending December 31, 2023.
Our non-GAAP adjusted net loss was $17.6 million or $0.61 per share for the fourth quarter of 2023 compared to non-GAAP-adjusted net loss of $10.3 million or $0.61 per share for the fourth quarter of 2022. Non-GAAP-adjusted net loss for the full-year 2023 was $57.8 million or $2.44 per share compared to non-GAAP-adjusted net loss of $35 million, or $2.27 per share for the full-year 2022. Research and development expenses were $18.1 million for the fourth quarter of 2023, compared to $10.6 million for the fourth quarter of 2022. R&D expenses for the full-year 2023 were $60.6 million, compared to $35.3 million for the prior year. Of the approximately $25.3 million increase in R&D expenses year-over-year, $22.9 million was related to activities supporting the VIKTORIA-1 Phase 3 trial and the initiation of the Phase 1b/2 clinical trial.
The remaining $2.4 million increase in R&D expense is related to increased employee and consulting expenses. General and administrative expenses were $1.6 million for the fourth quarter of 2023 compared to $1 million for the same period in 2022. G&A expenses for the full-year of '23 were $5.6 million, compared to $4.1 million for the prior year. Of the approximately $1.5 million increase in G&A expenses, $1.1 million was related to increased employee-related expenses and $0.4 million related to professional fees and other expenses associated with compliance-related activities that support financing and clinical operations. Net cash used in operating activities for the fourth quarter of '23 was $18.5 million compared to $9.5 million for the fourth quarter of '22.
This was a result of non-GAAP adjusted net loss of $17.6 million plus approximately $900,000 of working capital changes. Net cash used in operating activities for the full-year '23 was $53.8 million compared to $36 million for the full-year '22. This was a result of non-GAAP adjusted net loss of approximately $57.8 million offset by working capital changes of approximately $3.9 million. We ended the year with approximately $180.6 million of cash, cash equivalents and short-term investments compared to $168.6 million on December 31, 2022. The increase in cash year-over-year is a result of two financing activities that occurred in the fourth quarter of '23 and yielded gross proceeds of $65 million which was offset by cash used in operating activities of $53.8 million in '23.
The first financing activity included a private placement offering through a pre-funded warrant arrangement, which generated $50 million in gross proceeds. The second financing activity generated gross proceeds of $15 million by accessing our at the market offering. We expect cash, cash equivalents and investments and available funds under our debt facility to provide adequate capital to fund current operational activities into the first-half of 2026. I will now hand the call back to Brian.
Brian Sullivan: Thank you, Vicky. Operator, could you please open the call for questions.
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