Alexander Fudukidis - Russo Partners Spiro Rombotis - CEO, President and Executive Director Paul McBarron - CFO, COO, EVP of Finance, Secretary and Executive Director.

Analysts:.

Welcome to the Cyclacel Pharmaceuticals' First Quarter 2017 Results Conference Call and Webcast. Today's call is being recorded. [Operator Instructions]. The company will also be accepting a limited number of questions submitted via email to the address ir@cyclacel.com. It is now my pleasure to turn the floor over to the company..

Thank you. Good afternoon, everyone and thank you for joining our conference call to discuss Cyclacel's first quarter results and business highlights for the quarter ended March 31, 2017.

Before turning the call over to senior management, I would like to remind everyone that during this conference call, any 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. At this time, I would like to turn the call over to Spiro Rombotis, Cyclacel's President and CEO.

Spiro?.

Thank you, Alex and good afternoon, everyone. On today's call, we will provide our first quarter business update and review progress with our development priorities which are our clinical-stage programs in transcriptional regulation and DNA damage response.

Our transcriptional program comprises of our cyclin-dependent kinase or CDK, inhibitors led by CYC065. This drug is in a Phase I first-in-human study in patients with advanced solid cancers which is approaching completion of enrollment.

We're encouraged by early data from this study with regard to CYC065's tolerability and preliminary evidence of target engagement and clinical activity. In our DNA damage response program, we're evaluating a sequentially administered regimen of sapacitabine with our CDK inhibitor, seliciclib, in BRCA-positive patients with various advanced cancers.

Durable clinical benefit were reported in patients with multiple cancers treated with our regimen at an oral presentation during the ASCO 2016 conference. Before handing over to Paul to take us through the financials, let us provide some background on our key programs.

Cyclacel's drug discovery and development strategy is to translate insights in cancer biology into medicines that serve selected patient populations based on the genomic profile of their cancer.

Cancer cells gain a growth advantage over normal cells by copying or transcribing their DNA to their daughter cells, thus developing resistance to treatment over several generations. In many cancer cells, resistance is correlated with increased expression of pro-survival proteins such as BCL-2, BCL-XL and Mcl-1.

Specifically, cancer cells that express a high level of Mcl-1 develop acquired resistance and become very hard to kill.

In similar fashion, cancer cells become dependent or addicted to oncogenes, such as MYCN or cyclin E, the molecular partner of CDK2 and survive because there are no medicines that can directly or indirectly break the addiction to these oncogenes.

Another strategy used by cancer cells is to repair damage to the DNA, giving their offspring a chance to evade treatments and grow by displacing normal cells.

As understanding of these phenomena has increased in recent years, the global cancer community has concentrated its efforts on finding ways to disrupt the ability of cancer cells to gain advantage and survive.

Cyclacel's strategy on this front has two thrusts, using our CDK inhibitors to interfere with transcription and overcome resistance of cancer cells or break their addiction to oncogenes, that is genes that promote cancer; employing our sapacitabine and seliciclib CDK inhibitor regimen to disrupt the ability of cancer cell to repair damage to their DNA and thus restore their sensitivity to anticancer therapy.

We will first review the transcriptional regulation program and CDK inhibitors. CDKs are a recently validated oncology drug class which represent a paradigm shift in treating certain cancers. The first CDK inhibitor, palbociclib, was approved by FDA in 2015 and the second, ribociclib, earlier this year, both for a subtype of breast cancer.

These drugs reduce the elevated expression or amplification of genes that encode CDK 4 or CDK 6 and inhibit cell cycle progression by putting cancer cells into a dormant state rather than kill them.

They have to be given in combination with chemotherapy in patients who have failed such chemotherapy, thus modulating the level of sensitivity of cancer cells to treatment. Led by the views of our founder, Professor Sir David Lane, Cyclacel's CDK inhibitors target a different CDK isoform.

Both seliciclib, our first-generation and CYC065, our second-generation CDK inhibitors inhibit CDK 2/9, an isoform associated with regulation of transcription and overcoming resistance. CYC065, like seliciclib, has been shown to reduce Mcl-1 levels in cancer patients and, we believe, may be in a leading position in this area of cancer research.

CYC065 was discovered by Cyclacel scientists and is available by both intravenous and oral administration. Our goal is to explore its utility in resistant cancers and potentially increase therapeutic benefit for patients. Based on preclinical and early clinical data, we're excited about CYC065's potential.

In the ongoing Phase I first-in-human study in heavily treated patients with advanced solid tumors, we're evaluating CYC065's safety, tolerability and pharmacokinetics. In addition, the study aims to investigate CYC065's transcriptional effects on Mcl-1 and other markers or proliferation or resistance.

So far, CYC065 has been intravenously administered to approximately 20 patients in escalating-dose cohorts of 3 patients each. At this point, we're expanding the 6-dose escalation level to a total of 9 patients with the objective of determining the recommended Phase II dose.

Following analysis of patient specimens obtained at baseline and during treatment, evidence of pharmacodynamic engagement has been observed, including reduction in Mcl-1 expression. Preliminary evidence of clinical activity has been observed in 2 patients with MYCN and cyclin E amplifications.

These observations are consistent with the company's preclinical data and the drug's mechanism of action. So far, there have been no observations of serious toxicity. CYC065 may be most useful as a therapy for patients with both liquid and solid tumors in combination with other anticancer agents.

One such combinant is venetoclax, a recently approved BCL-2 BCL-XL inhibitor which does not reduce levels of Mcl-1. In parallel with our solid tumor study, we're reviewing with investigators study designs to test CYC065 in combination with approved agents in hematological indications.

In terms of next steps and subject to emerging clinical data, we're interested in exploring the utility of CYC065 alone and in combinations in hematological malignancies and solid tumors over-expressing Mcl-1 or addicted to MYCN or cyclin E. Our second program is in DNA damage response.

Our strategy here has been to develop molecules that target DNA damage repair pathways which are another way by which cancer cells manage to evade treatment and continue to proliferate. Currently, PARP inhibitors are being used to treat -- to target DNA repair damage response pathways.

Three such drugs, niraparib, olaparib and rucaparib, have been approved by FDA for the treatment of advanced ovarian cancer, including HRD or BRCA-positive patients. However, PARP inhibitors only address approximately 25% of the patient population and patients often develop myelosuppression, suggesting an unmet medical need.

We believe that a non-PARP-based medicine could be an attractive alternative for such patients probably as combination therapy.

We're currently evaluating this strategy in a Phase I/II study with a clinical regimen of oral sapacitabine followed sequentially with oral seliciclib, our first-generation CDK inhibitor, in a targeted population of BRCA-positive patients. The study is being conducted at the Dana-Farber Cancer Institute in Boston.

Phase I data from this program in 67 all-comer patients with various advanced cancers were reported as an oral presentation at the 2016 ASCO Annual Meeting.

Antitumor activity with durable clinical responses was demonstrated in a subgroup of 45 patients with breast, ovarian and pancreatic cancers, all of whom tested positive from BRCA mutations, including patients who have progressed on PARP inhibitors, the current standard of care in this population. No responses were observed in BRCA-negative patients.

We believe they're the first evidence of clinical benefit in BRCA-positive patients based on a biological mechanism other than PARP inhibition. If the data can be confirmed, this combination regimen of sapacitabine and a CDK inhibitor may present an opportunity to enhance therapeutic alternatives for this targeted patient population.

Based on the results and investigator interest, the study has been expanded to evaluate an additional 20 patients with breast cancer, all of whom are required to test positive for BRCA in baseline biopsies. Patients will also undergo whole exome sequencing with the objective of further characterizing the genetic profile of their tumors.

Separately, following investigator interest from other departments at Dana-Farber, we have designed a part 3 of this study with the goal of testing a revised dosing schedule in additional patients, including BRCA mutation-positive ovarian and pancreatic cancer patients.

I will briefly mentioned progress with 2 additional programs, CYC140 and sapacitabine. CYC140 is a novel polo-like kinase 1 or PLK 1, inhibitor program discovered in-house by Cyclacel scientists led by Professional David Glover, our Chief Scientist. Professor Grover is credited with the discovery of PLKs as targets for oncology drug development.

CYC140 was the subject of a recent poster representation at the 28th EORTC-NCI-AACR Molecular Targets and Cancer Therapeutics Symposium. The data demonstrated antitumor activity of CYC140 in preclinical xenograft models of acute leukemia and solid tumors, including esophageal cancer with tumor growth delay, tumor regression and cures being observed.

Additionally, identification of several pharmacodynamic markers and demonstration of activity in a majority of malignant cell lines derived from ALL, AML and esophageal cancer was observed. The program has completed IND-directed development at this point.

Finally, we're continuing our analysis of subgroups in our SEAMLESS Phase III study of sapacitabine in acute myeloid leukemia or AML, to identify patients who are most likely to benefit from treatment with the experimental arm.

In February of 2017, we reported that the study did not reach statistically significant superiority in overall survival, although an improvement in complete remission rate was observed.

In the stratified subgroup of patients with low baseline peripheral white blood cell counts comprising approximately 2/3 of the study's population, an improvement in overall survival was observed for the experimental arm. Depending on this analysis, the company may initiate discussions with European and U.S.

regulators to determine a potential regulatory pathway.

Our catalysts for the remainder of 2017 include, report top line results of the CYC065 Phase I trial in patients with advanced solid tumors, initiate CYC065 clinical development in patients with advanced hematological malignancies, progress sapacitabine and seliciclib extension cohort in BRCA-positive breast cancer patients, initiate Part 3 in BRCA-positive patients with solid tumors other than breast cancer and report any outcome on SEAMLESS following final analysis.

We will now review our financials.

Paul?.

Thank you, Spiro. As you saw from today's release, for the quarter ended March 31, 2017, our cash and cash equivalents totaled $12.7 million. This compares to $16.5 million as of December 31, 2016. The decrease of $3.8 million was due to net cash used in operating activities.

Net proceeds of approximately $1 million were received in April 2017 from the sale of common stock through the company's at-the-market facility. The company expects that its current cash resources are sufficient to come the company to the end of 2018.

There were no revenues for the 3 months ended March 31, 2017, compared to $0.1 million for the same period of the previous year. The revenue is related to previously awarded U.K. government grants being recognized over the period to progress IND-directed preclinical development of CYC140 which was completed in November 2016.

Research and development expenses were $1.3 million for the 3 months ended March 2017 compared to $2.5 million for the same period in 2016. The decrease was primarily due to reduced study and clinical supply costs associated with the completion of the SEAMLESS study and 2016 expenditure related to the development of CYC140.

General and administrative expenses were $1.4 million for each of the 3 months ended March 31, 2017 and '16. Other income, net, for the 3 months ended March 31, 2017, was $0.8 million compared to $0.2 million for the same period of the previous year.

The increase is primarily related to income received under an asset purchase agreement with Life Technologies Corporation, formerly Invitrogen Corporation, in respect to certain assets and intellectual property sold by the company to Life Technologies in December 2005.

The United Kingdom research and tax credits were $0.3 million for the 3 months ended March 31, 2017, as compared to $0.5 million for the same period in 2016. The cash receipt for the 2016 tax credit of approximately $2 million is expected to be received in the second quarter of 2017.

Net loss for the 3 months to March 31, 2017, was $1.6 million compared to $3 million for the same period in 2016. After taking into account the expected $2 million cash receipt mentioned above and sales of common stock totaling $1 million from the at-the-market facility, pro forma cash at March 31, 2017, is approximately $15.7 million.

The company expects this current pro forma cash to fund operations and ongoing programs to the end of 2018. Operator, we're now ready to take questions..

Operator:.

Thank you, operator. And thank you all for participating in our update call and your support of Cyclacel's efforts to serve patients in need. 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. That does conclude today's conference call. You may now disconnect..