Good afternoon, ladies and gentlemen, and welcome to the Celcuity First Quarter 2024 Financial Results Conference Call. [Operator Instructions].

I would now like to turn the conference over to Maria Yonkoski with ICR Westwicke. .

Thank you, operator, and good afternoon to everyone on the call. Thank you for joining us to review Celcuity's First Quarter 2024 Financial Results and Business Update. Earlier today, Celcuity released financial results for the first quarter ending March 31, 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 I 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. .

Thank you, Maria, and good afternoon, everyone. We appreciate your interest in Celcuity. Our Phase III trial, VIKTORIA-1, remains on track to report top line data for the PIK3CA wild-type subgroup in the second half of 2024. Enrollment continues to proceed well.

During the first quarter, in conjunction with an update related to our debt facility, we reported that the wild-type subgroup was more than 50% enrolled. Achieving this enrollment threshold during the first quarter gave us the right to draw down an additional $10 million tranche from our current debt facility. .

The patients we're evaluating in this study have HR-positive HER2-negative advanced breast cancer whose disease progressed while receiving treatment with a CDK4/6 inhibitor and an aromatase inhibitor. And patients are eligible for enrollment if they've received up to 2 prior lines of endocrine treatment.

But we anticipate that most of those enrolled will be receiving second line treatment. And these patients typically remain on their first line CDK4/6 inhibitor plus letrozole regimen for a median of 18 to 22 months depending on the CDK4/6 inhibitor. .

And this compares to the 13 months medium duration of prior treatment reported for patients enrolled in the comparable arm of our Phase Ib breast cancer study that evaluated gedatolisib combined with palbociclib and fulvestrant. .

Patients who received prior chemo in the advanced setting are not eligible for our Phase III study, unlike the comparable arm of our Phase Ib study, and this is relevant since the prognosis tends to be worse for individuals who have previously undergone chemotherapy for advanced breast cancer compared to those who are chemo-naive. .

Another difference in the Phase III eligibility criteria relative to our Phase Ib study is the allowance of patients with bone-only disease. Based on data from other Phase III trials, we expect that roughly 20% of the patients enrolled in our Phase III study will have bone-only disease. .

Our Phase Ib study did not allow bone-only patients, only those with visceral disease were enrolled. And this is relevant since patients with non-bone-only disease generally have worse prognosis than those with bone-only disease.

By not allowing patients who have received prior chemotherapy in the advanced setting and by including those with bone-only disease, we're eliminating 2 factors in our Phase III study that correlate with worse outcomes.

As we begin preparing for gedatolisib's potential position in the future treatment landscape, we will take into account the criteria oncologists use to select a cancer therapy. .

We think these criteria in order of importance are efficacy, then safety then mode of administration. And this is consistent with guideline recommendations, which are based on efficacy and safety considerations, not motive administration preference, especially in advanced breast cancer. .

The current second-line treatment paradigm for ER-positive HER2-negative patients with advanced breast cancer or selective estrogen receptor degraders or SERDs, like fulvestrant or elacestrant as single agents or 1 of 3 approved PAM inhibitors combined with fulvestrant.

However, each of the PAM inhibitors only targets a single PAM nodes, such as PI3K alpha, AKT or mTORC1, which is suboptimal because the uninhibited PAM nodes can induce compensatory resistance. .

In patients who have received prior treatment with a CDK4/6 inhibitor, none of these drugs have demonstrated efficacy in patients who have PIK3CA wild-type tumors. While only the PI3K alpha and AKT inhibitor have reported benefit in patients with PIK3CA mutations.

And these results are consistent with the nonclinical data that shows these single node inhibitors are 3 to 4x less potent in breast cancer cells without PIK3CA mutations than in those with them. This is in sharp contrast to the nonclinical and preliminary efficacy data we've reported for gedatolisib. .

In studies evaluating breast cancer and prostate cancer cell lines, gedatolisib was found to be equally potent in efficacious and cell lines with and without PIK3CA mutations and at least 300x more potent on average in breast cancer cells than the improved single-node PAM inhibitors. .

Consistent with these nonclinical results, preliminary efficacy we reported in our Phase Ib breast cancer study that evaluated gedatolisib combined with palbociclib and either letrozole or fulvestrant was comparable in both treatment-naive and second third-line patients with and without PIK3CA mutations.

And we think these results demonstrate that along with the estrogen receptor and CDK4/6 pathways, the PAM pathway plays an intrinsic role as a disease driver in HR-positive HER2-negative advanced breast cancer, that's independent from the presence of an activating mutation like PIK3CA. .

And that's why we believe development of an optimized PAM inhibitor like gedatolisib that targets all Class I PI3K isoforms, and mTORC1 and 2 represents one of the most important opportunities to improve the standard of care in HR-positive, HER2-negative advanced breast cancer. .

Now obviously, the foundation of gedatolisib's potential future positioning, will require the gedatolisib report a clinically meaningful MPFS benefit. The current median PFS benchmarks for patients pretreated with a CDK4/6 inhibitor are modest. Published reports of median PFS for the surge range from 2 to 3.8 months.

And in patients with PIK3CA mutations, 5.5 to 7.3 months for the AKT and PI3K alpha inhibitors, respectively. .

The two most recently approved therapies for this patient population reported 2 to 3.5 months of incremental PFS benefit. The threshold KOLs generally consider to be clinically meaningful.

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

And this perspective was actually recently echoed by senior management from an ADC sponsor that characterized ADCs is creating a third pillar in the treatment landscape for HR-positive, HER2-negative breast cancer. That sits between endocrine therapy based regimens and classical chemotherapy. .

And these comments are consistent with the sponsor's drug development strategy in breast cancer, which includes development of an oral SERD and AKT inhibitor. We also think gedatolisib's safety profile may 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 CDK4/6 plus fulvestrant regimens. .

And these results compare favorably to the treatment-related discontinuation rates reported in the Phase III studies for alpelisib plus fulvestrant or 26% of patients discontinued and everolimus plus exemestane, where 24% of patients discontinued.

The results we get [indiscernible] specially encouraging given that patients in the Phase Ib study did not receive prophylactic treatment for stomatitis.

Since we're prescribing stomatitis prophylactic in our Phase III trial, we would expect fewer stomatitis related adverse events, which would further enhance gedatolisib's already promising safety profile. .

And finally, in office-administered therapies, such as an infused therapy, like gedatolisib. There are several key advantages relative to orally or self-administered drugs.

In a real-world setting, convenience is only a meaningful consideration when the efficacy and safety profile of the alternative drugs are comparable or when a patient lives a significant distance from the treatment site.

Otherwise, a well-tolerated therapy that offers a clinically meaningful PFS benefit will be overwhelmingly preferred by oncologists relative to one that offers less efficacy, but is more convenient. .

Office-administered therapies, such as gedatolisib fall into the medical benefit category, which has a far more streamlined reimbursement process than orally administered drugs, which fall into the pharmacy benefit category. And this has several implications. First, oncologists can recover additional costs associated with treating our patients. .

Second, oncologists have more autonomy to select therapies and payer management process is much less burdensome. .

And third, payer contracting is less frequent, which results in fewer price discounts for the pharmaceutical company. .

And fourth, patients typically incur lower out-of-pocket costs with an infused therapy, which is an important consideration for most patients. .

Beyond our breast cancer program, we're excited about the opportunity to develop gedatolisib for patients with metastatic castration-resistant prostate cancer, or CRPC.

This past February, we dosed our first patient in a Phase Ib/II trial evaluating gedatolisib in combination with darolutamide, an androgen receptor inhibitor in CRPC patients previously treated with an AR inhibitor. .

Like HR-positive breast cancer, prostate cancer involves both a hormonal pathway and the PAM pathway. The role that PAM pathway plays in prostate cancer has been well characterized nonclinically and in 2 [indiscernible] continued PAM inhibitors, which showed compelling proof-of-concept clinical trial data in 2 randomized studies. .

In each of the clinical trials for these other PAM inhibitors, clinically meaningful treatment benefit was reported relative to the androgen receptor inhibitor control arm in patients with CRPC. This is especially encouraging since gedatolisib is significantly more potent and efficacious than these PAM inhibitors in vitro. .

Primary objectives of the Phase Ib portion of the trial include assessment of the safety and tolerability of gedatolisib in combination with darolutamide and determination of the recommended Phase II dose of gedatolisib. .

We anticipate reporting initial preliminary data in the first half of 2025. And with that, I'll turn the call over now to Vicky Hahne, our Chief Financial Officer, to review our financial results. .

Thank you, Brian, and good afternoon, everyone. I'll provide a brief overview of our financial results for the first quarter 2024. Our first quarter net loss was $21.6 million or $0.64 net loss per share compared to $11.9 million net loss or $0.55 per share for the first quarter of 2023. .

Because these quarterly net loss includes significant noncash items, including stock-based compensation and interest, we also included in our press release non-GAAP adjusted net loss for the quarter ending March 31, 2024.

Our non-GAAP adjusted net loss was $19.9 million or $0.59 per share for the first quarter of '24 compared to non-GAAP adjusted net loss of $11.9 million or $0.55 per share for the first quarter of 2023. .

Research and development expenses were $20.7 million for the first quarter of '24 compared to $11.3 million for the first quarter of '23.

Of the approximately $9.4 million increase in R&D expenses, $7.9 million primarily related to activities supporting the VIKTORIA-1 Phase III trial and the initiation of the prostate Phase Ib/II clinical trial and $1.5 million was related to increased employee and consulting expenses.

General and administrative expenses were $1.8 million for the first quarter of 2024, that compared to $1.3 million for the first quarter of '23. .

Employee-related expenses accounted for $0.3 million of the increase. The remaining increase of approximately $0.2 million resulted from professional fees and other administrative expenses. .

Net cash used in operating activities for the first quarter of 2024 was $17.1 million compared to $12.9 million for the first quarter of '23. We ended the quarter with approximately $177.7 million of cash, cash equivalents and short-term investments compared to cash and cash equivalents of $180.6 million at December 31, 2023.

The decrease in cash quarter-over-quarter of $2.9 million is primarily the result of non-GAAP adjusted net loss of approximately $19.9 million, offset by a warrant exercise yielding $14 million in proceeds and working capital adjustments of approximately $3 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. .

This is Yao on for Maury.

So for the Phase III study, can you remind us how the primary analysis is going to be triggered in terms of events and maturity? And what were the PFS assumptions for treatment and control that went into the guidance of second half '24 top line data?.

Sure. Well, the study primary analysis will be triggered by hitting an event threshold number of events, and that's independent of follow-up, although there are assumptions made about the follow-up period to derive an estimate of the timing when we would expect those events to occur and which informs the sample size assumptions. .

We haven't published the assumptions we used to do that analysis. But we have presented data and there's publicly available data, particularly for fulvestrant, that suggests that 2 to 3.5 months would be the most likely in that range probably centering around 2.7 for fulvestrant. .

Maybe a quick follow-up. You recently said some KOLs think the bar for wild-type patients is 8 months PFS or 5-month delta versus fulvestrant. And there is one everolimus study in post CDK4/6 patients that showed PFS in that ballpark.

So how does the current trial compared to the everolimus trial? And what in the current trial gave you confidence that you should show better PFS. .

So all the numbers for PFS would be on a relative basis because, obviously, it's relative to the control. And I think generally, KOLs think or would consider a clinically meaningful benefit to be about 3 months or certainly more is better. But that's the threshold.

If you're referring to -- I'm not sure whichever line of study referring to -- could you tell me what the study you're referring to?.

Just I think you recently said one of the everolimus study in the post-CDK4/6 patient that showed PFS in the I think maybe 6 to 8 months. .

No. No, okay. That's why I asked. That's not correct. So there's been some retrospective analyses of everolimus that doesn't break out what their activity is between PIK3CA wild-type and mutant patients. But those are retrospective analyses.

There are 3 of them if we aggregate the data, and weigh it for the number of patients in each study, the median PFS was 4.2 months. .

But again, given the nonclinical data would suggest everolimus is more likely to be more effective in patients with mutations than not with mutations. I think there's an open question about how effective everolimus is in the wild-type -- PIK3CA wild-type patients.

And as I mentioned, there's been no randomized data that provides any informed information or credible data about the activity of the drug in patients who've received prior CDK4/6s. .

Your next question is from Tara Bancroft from TD Cowen. .

I have one clarifying question. Can you explain the reasoning that you have behind stratifying patients by 6 months on prior therapy versus 12 as these are chemo-naive patients and that essentially implies that many will have a longer time on prior therapy.

And do you expect that the prior therapy will be almost entirely all prior CDK4/6 or will it be including others like everolimus or third too, if it's appropriate, as you know, the time on prior CDK4/6 specifically, is important for outcomes. So it will be helpful to know. .

Sure. So the stratification factor for prior treatment duration was based on ESMO guidelines, which define androgen resistance in the advanced setting as less than -- patients receiving less than 6 months PFS on -- in endocrine therapy. So we felt that was a validated way of defining a patient population. .

There's a clear demarcation in responsiveness, the subsequent rounds of chemotherapy, which is why the benchmark or that guideline identified 6 months is the threshold. .

To the extent that people want to look at more than 12 months, I would say the bulk of the differentiation in outcomes, it probably occurs in 6 months.

And so what you'll see is a bit of a upward [ floating ] curve that correlates highly with prior treatment that is much more gradual than the curve for patients who have progressed on less than 6 months. .

And what you'll see when you're looking at some data for therapies under development, particularly the SERDs, it appears the strategy -- or the patient population they're going after really sets who they're enrolling in some of their studies.

Our patients who have -- they're only enrolling patients who've had more than 6 months of benefit, PFS on their prior endocrine therapy. .

So essentially, they're selecting out the patients who are endocrine resistant. In our study, since we -- that's a meaningful and important group of patients to treat. We are including those patients. Stratification variable factor though allows us to do an analysis and make sure the arms of the study are well balanced. .

Your next question is from Bradley Canino from Stifel. .

And good to see the reiteration of the second half '24 top line guidance. Brian, maybe another timing question, a layer on top of that. I'm just wondering how important is it for your strategy to be able to report the full data for the wild-type cohort at the San Antonio Breast Cancer meeting in December. .

Again, what's going to be the most important is what the data says. And it certainly be nice if the data was available, we could present it. I don't think it's essential, to be frank. I think it's a very secondary consideration and we don't control the timing of that. .

And there's other complicating factors that you have to weigh. So we'll see, basically. But I don't think it's -- it's nice to have, not a need to have. And certainly, what's more important is the data itself. .

Okay. And then you also mentioned in your comments about the prior chemo and bone-only patient factors between your Phase II and Phase III.

Could you point us to any data that might help quantify the degree of impact these factors can have on durability in PFS? Or any other comments on how you think about the potential directional impact?.

Sure. So there's data across many tumor types that will show patients who've received chemo and then our subsequently treated on targeted therapy will have a worse outcome than patients who hadn't had prior chemo. .

In the breast cancer space, I guess the data is probably most meaningful was reported out of the BYLieve study. Cohort A enrolled kind of a first-line, second-line population, no chemo, chemo-naive patients. And then Cohort C of that study or allowed patients who had prior chemo to enroll. And so it was more of a second, third line study.

Cohort A, which is more similar to the patient population we're enrolling reported 7.3 months; Cohort B, about 5.5 or 5.6 months. .

So essentially a 30% delta in favor of the patients who are chemo-naive. And that's probably a relevant benchmark just because they're hitting a similar pathway. As far as bone only, impact or -- and essentially, when you say bone-only, there's 1 qualification.

Patients we're enrolling on bone-only, but they have to have a measurable lytic lesion so you can measure PFS. .

And -- but in the PALOMA-2 study for palociclib, they did a follow-up analysis and found patients with bone-only disease had 38 months or 50% greater PFS than patients who had only -- that had visceral disease, not bone-only disease, which suggests, obviously, there's a much greater -- much more favorable prognosis for bone-only patients who are more likely to get a favorable response to targeted therapy, at least 1 that includes a CDK4/6 inhibitor.

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Your next question is from Chase Knickerbocker from Craig-Hallum. .

This is Connor on for Chase. I just have one here today.

Last quarter, you brought on Eldon Mayer to prepare for a commercial launch of data, since then, what initiatives has the implemented or plan on implementing to prepare for the launch on your own?.

Thanks for the question. So no, very happy to have Eldon on Board. as folks who've invested in the space now, the preparation time for a launch is quite long. And I think launch preparation takes place in 2 time buckets. I would say there's the T minus 12, launch minus 12 months bucket, which is the most intense and expensive time.

And that time can be gated or really begun once you have your Phase III data, essentially when you can really fully flesh out your product profile and be much more specific when you're doing research in to characterize your positioning and your overall messaging in the marketplace and able to put together dossiers, et cetera, for payers..

So we're in the T minus '24 time frame, right? We're in between month 12, T minus 12 and let's say, T minus 20 or so. And so the work that we're focused on now is building the initial team, you need to bring on people who can lead the marketing effort, business operations effort, the managed market effort.

And that we're on track with identifying and getting those people on board. And that's -- those are individuals. Those are not teams. .

And then you start to do research, which -- and lay out the overall plan.

So I would say the main focus for us by the end of this quarter was to essentially develop a preliminary plan, which would identify organizational structure that will be required in particular by month over the next let's say, 20 months or so, the budget that's associated with that during that time line as well as post launch, the first year of commercialization.

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We've identified the cross-departmental dependencies or -- that will require support of the launch, whether it's IT or administrative support or clinical operations support, medical affair support, et cetera. And so -- and then making sure that all that work is aligned with the landscape as we see it today or as we see it evolving down the road. .

[Operator Instructions] Your next question is from Gil Blum from Needham & Company. .

So maybe a bit of a rewording on a couple of previous ones here. So given you're enrolling patients with better expected outcomes, shouldn't this overall [indiscernible] time line for a study readout mean increased benefit should be evenly spread across the treatment arms. But I'm assuming this went into your calculations. .

It did. But I would say, though, there's a cap on the potential for fulvestrant. If you look at the data, I don't think there's any data that would -- that has been reported in this patient population that suggests that fulvestrant can do more than 3.7 months. .

If you aggregate the data that's been reported, you'd see it's about 2.7%. If you look at the error bars on the data that has been reported the upper bound of the 95% confidence interval is around 3.8, you can nudge that up and round it to 4.

But just given the mechanism and those results, we think that there's much less upside, I guess due to a more favorable patient population than there is by treating untreated disease mechanism, which is what we're doing with gedatolisib. .

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

Great. Well, thank you again for participating in our call today and for your ongoing support and interest in our company. We're participating in a number of conferences in the coming months. And look forward to interacting with many of you soon. I hope you have a great evening. Goodbye. .

Thank you. Ladies and gentlemen, the conference has now ended. Thank you all for joining. You may all disconnect..