Good afternoon, and welcome to the Cyclacel Pharmaceuticals Fourth Quarter and Full Year 2018 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, ir@cyclacel.com. [Operator Instructions]. Please note that today's call is being recorded.

I would now like to turn the conference call over to Alex. Please go ahead..

Good afternoon, everyone, and thank you for joining today's conference call to discuss Cyclacel's financial results and business highlights for the fourth quarter and full year ending December 31, 2018.

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. At this time, I would like to turn the call over to Spiro.

Spiro?.

Report expansion cohorts Phase I data with an oral sequential regimen of sapacitabine and seliciclib in patients with BRCA-mutant metastatic breast cancer at the 2019 AACR; initiate CYC065 venetoclax Phase I study in patients with relapsed/refractory AML or MDS; initiate sapacitabine venetoclax Phase I study in patients with relapsed/refractory AML or MDS; report initial data from the CYC065 venetoclax Phase I studies in leukemias; report initial data from the CYC140 Phase 1 first-in-human study; report initial data and bioavailability from the Phase I study of an oral formulation of CYC065; report updated CYC065 Phase I data in patients with advanced solid cancers; report data from the Phase Ib/2 IST 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.

I would now like to turn the call over to Paul to review our fourth quarter and full year 2018 financials.

Paul?.

Thank you, Spiro. As outlined in today's press release for the quarter ended and year ended December 31, 2018, our cash and cash equivalents totaled $17.5 million compared to $23.9 million as of December 31, 2017.

The decrease of $6.4 million was primarily due to net cash used in operating activities of $6.7 million, net cash used in investing activities of $0.1 million, offset by $0.4 million of net cash provided by financing activities.

Revenues for both the three months and year ended, 31st of December 2018 amounted to $0.2 million compared to nil for the same periods in 2017. The revenue is related to a collaboration, licensing and supply agreement with ManRos Therapeutics entered into in June 2015.

Research and development expenses were $1.1 million and $4.3 million for the 3 months and year ended December 31, 2018, as compared to $0.7 million and $4.2 million for the same periods in 2017.

R&D expenses relating to our transcriptional regulation program, CYC065, increased by $1.5 million from $1.1 million for the year ended December 31, 2017, to $2.5 million for the year ended December 31, 2018, as clinical evaluation of CYC065 progressed.

Expenses related to sapacitabine decreased by $1.7 million from $2.5 million for the year ended December 31, 2017, to $0.8 million for the year ended December 31, 2018, primarily as a result of reduction in expenditures associated with the SEAMLESS Phase III trial and related costs.

General and administrative expenses for the 3 months and year ended December 31, 2018, were $1.5 million and $5.3 million, respectively, compared to $1.5 million and $5.3 million for the same period of the previous year. The company has raised net proceeds of approximately $4.7 million from its common stock sales agreement with H.C.

Wainwright of which $4.1 million was received in 2019. Together with cash resources of $17.5 million as of December 31, 2018, and the proceeds from the common stock sales agreement received this year, pro forma cash is approximately $21.6 million, and the company estimates cash resources will fund currently planned programs through the end of 2020.

Operator, we are now ready to take questions..

[Operator Instructions]. Your first question comes from the line of Jotin Marango with Roth Capital..

I have a few about several of the programs. First, the combo of 065 with venetoclax, quite interesting when thinking about targeting the anti-apoptotic pathways in the tumor cell on multiple fronts. So you mentioned that the first patient has been treated without DLTs, so just wanted a little more granularity on that.

Does that mean that the patient was in a full dose of venetoclax, had they had full successful titration and then they got 065? And then as you accrue more patients, is there any more titration or is it now at fixed dose?.

Thank you for your questions, Jotin. That is a question for Judy..

This is Judy Chiao. To answer your questions, as the protocol requires patients to be on a stable doses after the ramp-up phase before they enter into the combination with 065. So they are at a full dose after the ramp-up phase..

And Spiro and Judy, what should we expect about the timetable here for a reasonable group of patients, I suppose, from a Phase I, let's say, 6 to 8 patients? Would that be around ASH 2019 or sooner or later?.

Well that's difficult to predict as, of course, we are enrolling at this point in MD Anderson as part of our alliance. However, from an abundance of caution, we are interested in opening additional sites, also planning for success. If we see activity, we'd like to broaden our enrollment options to additional centers.

So we are discussing with a number of centers right now and depend on when they start, we should be able to accelerate things. But I would say that toward the end of the year is a reasonable estimate we still might be able to respond to first indications of activity.

This is also based on the fact that we are correlating or hope to correlate signs of clinical activity to levels of Mcl-1 suppression. And I will remind you and the audience that we have seen suppression at 128 milligrams and 1 and 2 mgs per meter square in the previous Phase I study in patients with solid tumors.

If this findings were to be replicated in the current CLL study and AML studies that follow, then we should see activity relatively quickly as we escalate to those levels..

Understood.

And later, what could you tell us at this point about the oral formulation for 065? What are the next stages in advancing that?.

Well the first thing to say is that this is a drug which is, fortunately for us, wonderfully soluble and highly permeable. In 2 species, the solubility coefficient is around 90%. So this makes it relatively straightforward as far as the chemistry and manufacturing section is concerned to scale up.

We have successfully done that and reached the point now that we are in the process of filing for IRB approval in the short and immediate future to allow us to begin the Phase I study, most likely at Dana-Farber who have also experience with the IV. So we think that early in 2020, we should have a full PK and PD profile of the oral formulation.

We expect that this is going to be fairly close to the IV, but of course, data is what is needed and it's an important prerequisite for us to consider future studies, especially in patients with solid tumors, such as those that have overexpression or amplification of Cyclin E, as clearly, an oral drug in this population will be of particular advantage.

Meanwhile, we are interested in amending the current protocols at MD Anderson and perhaps other centers to include the oral formulation in our leukemia patient studies as well. That's clearly a benefit, particularly as we look at a median age in the late 60s or early 70s with most patients with CLL and AML..

And, lastly, the data from the expansion cohort of the combo, sapacitabine and seliciclib, sounds it's coming next week -- this weekend at AACR.

Could you just help frame for us what we should focus when we look at the data on that poster? So what the -- without getting away, what would be the relevant parameters of activities there that could help us integrate the mechanism and the activity when received?.

Yes, so I'll ask Judy to give you some more clinical perspective on that study. It is really a continuum of studies that originated with the announcement of the original 76 patient series of whom 45 were found retroactively to have BRCA mutations at ASCO 2016.

Essentially, the investigators that referred patients to the early drug development center at Dana-Farber, and in particular, those in the breast cancer department became interested in this data set and wished to enroll and expand the population. This time, all BRCA-positive and all, of course, with breast cancer.

So it's the data from this population that is the subject of the abstract that will be presented next Monday, April 1, at AACR. I think it's important to frame the expectation with the context of an embargoed abstract, which the AACR would release closer to the time, and of course, the company will put out a press release.

And perhaps I could ask Judy to explain the context of why this data is important in light of the sapacitabine-olaparib study was that recently it began enrollment as a IST from Dana-Farber group.

Judy?.

I think that it's in line with the investigation in the DNA Damage Response and programming related to the specific mechanism of actions of sapacitabine.

And I think one should focus on, when you look at the data, in which patient population that actually are pretty clear evidence of clinical benefit, and how does one think about that, for the future development, in order to improve the current standard of care..

[Operator Instructions]. Your next question comes from the line of Wangzhi Li with Ladenburg..

Just one question for CYC065, you're going to initiate this study in AML.

Just wanted to clarify that if a part of that MD Anderson collaboration included 1 of the 4 trials or this is one different?.

Hello, Wangzhi, thank you for your question. Indeed, this is one of the 4 protocols that are part of the MD Anderson Alliance, which, of course, means that it's sparing on our P&L.

The rationale for combining CDK 2/9 inhibitor with venetoclax in AML is less well established in terms of the signs than in the case of CLL, but there is a class effect of CDK9 inhibitors from previous early generation compounds, such as Flavopiridol or Dinaciclib.

Specifically though the ongoing not yet published enrollment of a combination study of intravenous administered Flavopiridol together with venetoclax appears to have promising early activity. This is a compound with some checkered history for over 20 years nearly in clinical development with a particularly burdensome infusion schedule.

Nevertheless, it appears to have clinical activity and it is that combination which is of interest to our participating investigators. We believe there is extensive interest in the AML community for such a combination and given the evidence of Mcl-1 suppression by CYC065 with no evidence of substantial toxicity, this is clearly a strategy to try..

Got it. So any color to share about the trial design and kind of pace of enrollment you kind of think of and any guidance on time line? I guess, it would be more later this year for data read out for next year..

Let me ask Judy to discuss some color on the trail design, and I'll come back on the question of timing.

Judy?.

Well, I think the trial designed is similar to the CLL program. And we go in with a dosing schedule that we knew at certain levels that will have at least 24 hours suppression of Mcl-1.

And we're going with venetoclax, and I think that hopefully, that we will see activity without much of a toxicity, particularly that tumor lysis that everyone is concerned about CLL..

Thank you, Judy. Wangzhi, just to build upon Judy's question, the timing for enrollment in this study is perhaps the most difficult to predict. And among others, we have, of course, the protocol of sapacitabine venetoclax, which is all oral, whereas, the 065 venetoclax will be initially intravenous plus or venetoclax later will be all oral as well.

So there are, obviously, some choices for patients to make, which may relate to the morbidity or state of disease or their fitness or unfitness for more intensive therapy. The other factors though at play, as Judy mentioned, one of the major safety issues with Flavopiridol historically has been tumor lysis syndrome.

In the recent study reported in ASH 2018, this is combination of Flavopiridol with Mitoxantrone and cytarabine, rate of TLS of about 20% was observed. There is a minor fear concerned with TLS with venetoclax in CLL, which on the label appears to be very modest in the low single digits around 2%.

However, 0% has been reported in recent AML trials of venetoclax. So this I think sets the stage for the type of issues and potential advantages that our drug CYC065 could convert to these patients.

We hope that we'll have data from this study, probably I would think in the second half of 2020 if it doesn't enroll as fast as the other 3 studies, but certainly, if we see that the venetoclax Flavopiridol study has substantial issues, maybe some of these patients will come to our protocol.

So that depends on how fast we enroll additional centers to this important program..

Okay, got it.

And then, the last question is, you mentioned the investigator trial on the BRCA-mutant breast cancer initiative patient who had a tumor shrinkage, any further color on how largely the shrinkage and maybe time to see tumor shrinkage? And I know it's only two patients, but any further color on kind of any difference you see with -- around what you would expect from the PARP inhibitor alone?.

Now that's an important question, but to remind you and the audience, this is an IST, Investigator Sponsor Trial, which means that Cyclacel does not maintain the database. It's maintained by the Dana-Farber investigators.

What we can say that these are confirmed PRs, these are reputable highly competent investigators, and we have worked with them for many years and trust in their sophistication when the report responses and clinical benefit.

But beyond that, we don't have any color on detail, until such time as they choose to share additional information with those on ultimately we want to see these better report. So at this point, we are going to be -- standing by as we get more information on the investigators as it may arise..

[Operator Instructions]. And there are no further questions at this time. I will now turn the call back over to the presenters for closing remarks..

Thank you, operator. And thank all of you for your participation in Cyclacel's fourth quarter and full year 2018 earnings call and your ongoing support of our efforts to develop medicines to address cancer resistance and improve the 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 for joining us today. This concludes today's conference call and you may now disconnect..