Brian Sullivan – Chief Executive Officer Vicky Hahne – Chief Financial Officer.

Per Ostlund – Craig-Hallum Capital.

Good day everyone and welcome to today's Celcuity Release of Second Quarter of 2018 Financial Results. At this time, all participants are in a listen-only mode. And later, you will have the opportunity to ask questions during the question-and-answer session.

[Operator Instructions] Please note that this call may be recorded and I will be standing by if you should need any assistance. It is now my pleasure to turn the conference over to Mr. Brian Sullivan. Please go ahead sir..

Thank you and good afternoon, everyone. We announced the financial results of our second quarter ended June 30, 2018 a few minutes ago. Before we begin, I'd like to remind everyone that our comments today will include some forward-looking statements.

And these statements as you know 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 results may differ materially from those in the forward-looking statements. On this call, we'll also refer to non-GAAP financial measures.

You can find a table reconciling the non-GAAP financial measures to GAAP financial measures in our earnings release for the three and six months ended June 30, 2018, which was included in today's press release. Today's press release is available on our website, www.celcuity.com, under the Investors section.

I also have on the call with me today Vicky Hahne, our CFO. And I'll make some comments about our second quarter results, Vicky will follow with more details on a few items, and then we'll open up the line for questions.

As we've previously disclosed, completing development of additional signaling pathway test for breast cancer is one of our primary objectives. And we completed developments of our second CELx test for breast cancer earlier in the year.

And this new test evaluates independent c-Met pathway signaling activity and its involvement with HER family signaling in HER2-negative breast cancer tumor cells. Abnormal c-Met signaling, including cross-talk between c-Met and HER family receptors, has long been suspected of playing a role in a variety of cancer types.

We combine the c-Met signaling function test with our current HER2 signaling function test to create the CELx Multi-Path test or MP test. With this next generation CELx test, we plan to provide an analysis of HER1, HER2, HER3 and c-Met signaling activity with a single patient tumor specimen.

We’re now evaluating new signaling pathways to add to our current CELx MP signaling function test for breast cancer. We believe there is an opportunity to increase the total percentage of HER2 negative breast cancer patients diagnosed with untreated signaling dysfunction to 35% to 40%.

We have identified several new pathway candidates to add to our CELx MP test, but we still have significant work remaining to confirm our initial findings and to complete development of our test. Earliest, we would expect to complete development of the new pathway test will be sometime next year.

We also continue to make progress developing CELx test in new tumor types. To support these projects, we’re advancing ourselves microenvironment technology and furthering our capability to assess differ types of signaling dysfunction.

And as we have already achieved in breast cancer, we’re working to provide functional analysis of multiple signaling pathways for these other tissue types. And our efforts in these areas are greatly enhanced with the experience we’ve gained developing test for breast cancer.

Each of these signaling pathway tests creates opportunities for Celcuity to collaborate with multiple pharmaceutical companies. And we intend to work with these companies to facilitate approvals of their targeted therapeutics to treat the new patients of sub-groups or CELx tests identified.

We’re currently in various stages of discussions of several pharmaceutical company for our current CELx MP test, we expect any resulting collaborations can involve as a first step clinical trails that evaluate the efficacy of our collaboration partners therapy or therapies in breast cancer patients whether they will be hyperactive HER2 signaling tumors or a hyperactive and co-activated HER family and c-Met signaling tumors.

And we’re hoping and working to finalize at least one new pharmaceutical company collaboration by the end of the year. It’s a clinical trail we are fielding in collaboration with the NSABP Foundation and Genentech is continuing to progress.

This is a clinical trial, which we refer to as FACT 1 is designed to evaluate the efficacy of two of Genentech's HER2 drugs, Herceptin and Perjeta in HER2-negative patients selected by our CELx signaling function test.

Institutional review board or IRB approvals at our sites are proceeding as we previously disclosed and we continue to expect to receive interim results from this trial in mid 2019. The clinical trial with Puma and NSABP Foundation we’re fielding is also progressing as previously disclosed.

This clinical trial is the Phase II study evaluating Puma Biotechnology’s pan-HER, Nerlynx, Genentech’s HER2 antibody, Herceptin, and Bristol-Myers Squibb’s, EGFR inhibitor, Erbitux, in metastatic colorectal cancer patients.

For this trial Celcuity [indiscernible] sent to us so that Puma can compare a patient's HER2 signaling status with the patient's responsive therapy. So overall we’re excited about the progress we made during the quarter and would like to now turn it over to Vicky, who will give you our financial results..

Thank you, Brian. Our second quarter net loss was $1.8 million, or $0.18 per share, compared to $1.8 net loss or $0.28 per share for the second quarter of 2017. Net loss for the first six months of the year was $3.8 million or $0.37 per share compared to $2.8 million or $0.43 per share for the same period in 2017.

Because this quarter and year-to-date net losses include significant non-cash items, stock-based compensation and non-cash interest expense, we also included in our press release non-GAAP adjusted net loss for the quarter.

Our non-GAAP adjusted net loss was $1.5 million or $0.25 per share for the second quarter of 2018, compared to non-GAAP adjusted net loss of $1.3 million or $0.20 per share for the second quarter of 2017.

The approximately $0.9 million increase in R&D expenses during the first six months of 2018 compared to the first six months of 2017 resulted primarily from a $0.4 million increase in compensation related expenses to support development of our CELx perform.

In addition, other R&D expenses increased $0.5 million due to clinical validation studies, laboratory supplies to support the CELx perform and operational and business development activities.

The approximate $0.5 million increase in G&A expenses during the first half of 2018 compared to the first half of 2017 primarily resulted from $0.2 million increase in compensation related expenses. Other G&A expenses increased $0.3 million due to professional fees associated with being a public company and director and officer insurance.

We also completed the moves for our new facility during the second quarter. In conjunction with this move, we spent approximately $230,000 dollars in leasehold improvements of which $75,000 was funded by our landlord. We also spent approximately $110,000 in additional capital equipment.

We ended the quarter with approximately $28.5 million of cash, cash equivalents and investment..

Thank you, Vicky. Operator, we would like now to take questions..

[Operator Instructions] And we will go ahead and take our first question from Per Ostlund from Craig-Hallum Capital. Please go ahead. Your line is open..

Thanks, good afternoon, Brain and Vicky. It sounds like really everything is basically progressing on plan here. Just a couple of quick questions for me and Brian you alluded to this in the – in your prepared remarks, but just again curious as to related to the fact one trial, the update on site enrollment.

I assume that you remain pleased with the quality of sites that you're enrolling and the pace that they're coming on. I guess I just ask that you would confirm that. And then related to that are there any surprises that you're seeing with the sites that are utilizing their internal IRBs instead of the NSABP 1..

So, yes. In response to your first part of the question, yes, I can confirm that. So the expectations are thing that good sites. No surprises as far as the IRBs [indiscernible] surprises these IRBs have a process to go through, but we haven’t had people not – not fail to – or fail to prove the IRB or anything like that.

So, no surprises on our site either..

Excellent, excellent, okay. Related to the c-Met test that you completed and announced on the last call and again you alluded to this in your prepared remarks as well. There is the interplay between c-Met and HER family signaling.

When you're evaluating pharma partners or potential pharma partners with a test like that, where there is the interplay, do you put a premium on trying to partner with somebody or collaborate with somebody that's got therapies on both the c-Met side and HER side? Or is there room to collaborate with multiple partners on that test?.

So there's a lot of variations that we can pursue. There are a number of drug companies I think for that has both a pan-HER inhibitor and a c-Met inhibitor.

So that’s a straightforward collaboration, but there are a number of companies that have pan-HER inhibitor without a c-Met inhibitor and some companies that have c-Met inhibitors and no pan-HER inhibitors.

So it – that’s a fairly logical ways of thinking about how to pair companies that don't have both and we we're thinking those strategies through and we've initiated discussions with the number of different pharmaceutical companies.

So as a path to working with companies that add goals and there's a path working with companies that only have a single agent. It’s from our perspective and I think we've been consistent on saying this. We’re agnostic. I mean these drugs we found are fairly similar in their activity as signal inhibitors.

And on the margin, you might be able to identify some differences, but we believe that any combination of this pan-HER inhibitors with pretty much any c-Met inhibitor would be efficacious and beneficial to patients. And so we're pursuing really partnerships with as many drug companies as we're able to put together..

That makes sense. As we're thinking about the multitude of tests that you're putting together, so you have to HER2 signal function test right out of the gate on and then the c-Met test.

And ultimately as you're looking to roll that together into the multi-pathway test, does that become – I don't want to say the single product, but is it a situation – is it a situation where you could be out there offering standalone test depending on the customer? Or do you eventually endeavor to have the multi-pathway test sort of be the end all, be all at each cancer type?.

So the latter. We've essentially rebranded our test at the CELx Multi-Path test that tests HER1, HER2, HER3 and c-Mat and our goal or our plan would be to for these patients specimen that we received to analyze the pathways that we believe are important potential candidates as disease drivers.

But each of those pathway tests would them potentially become a – again as if our plan gets fully executed, but would be candidates become companion diagnostics for the corresponding and matching therapeutic.

And so we generate a diagnosis of signaling dysfunction and that diagnosis in turn are the test that reports that out can be paired with a drug or drugs. That would in turn would allow a physician to based on our test result prescribed drug x or y or a drug combination x and y.

And so we think ultimately the best way to deploy our test and what would be best for patients is to do a full panel pathway evaluation. And then based on that analysis allow the physicians to make a treatment decision..

That makes sense. Maybe just to follow up on that, when you've spoken in the past about the individual tests, so again like the HSF or c-Met in a vacuum potentially being a $4,000 plus type of test..

Right..

Does the multi-pathway test become some multiple of that because you're evaluating….

Right..

What might have been multiple thousands of dollars of pathways individually?.

The short answer is we think there's a significant rationale to support a higher price of $4,000.

A company in the market people might be familiar with Foundation Medicine I think initially launched as a $4,000 to $5,000 test and I think when they’ve increased or rather expanded the panel of mutations that they assess, ultimately the test became or had a list price of closer to $6,000. So that’s certainly rationale and we would pursue that.

And I think we've described that over time as we do more analysis. We would expect to charge a higher price for the test..

Okay very good. One last question for me and then I will sweep the floor. If – just curious on the new tissue types.

If there's any I suspect that the actual tissue types themselves will be made clear when they're available, but do you have any sort of a timeline that you might be able to articulate as to when we might look for those either or both of those to be introduced?.

We talked about late this year, early next year. I mean that's in the general timeline. And we're still working towards that. And so those – it’s not a work involved in developing tests for the pathways.

A lot of what we've learned in breast cancer is directly applicable to these other tissue types, but to develop today data package and the associated processes or a fairly complex number of steps to go through. And so that’s the process we’re in the middle of right now..

Okay..

And we don't want to pre-announce until we have probably a set of data..

Yeah, that makes total sense. Thanks, Brian. I appreciate it..

Welcome, thanks..

[Operator Instructions] And at this time, it appears there are no other questions at this time..

Well, thank you all for attending the call. I appreciate your interest and look forward to reporting back to you in a few months. Take care..