On August 9, 2021 Celcuity Inc. (NASDAQ:CELC), a clinical-stage biotechnology company pursuing an integrated companion diagnostic and therapeutic strategy for treating patients with cancer, reported financial results for the second quarter ended June 30, 2021 and summarized recent business progress (Press release, Celcuity, AUG 9, 2021, View Source [SID1234586130]).
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"Celcuity’s recent follow-on equity offering strengthens our balance sheet and provides additional funding to support clinical development activities for the advancement of gedatolisib, a potential first-in-class PI3K/mTOR inhibitor," said Brian Sullivan, CEO and co-founder of Celcuity. "We are also very excited about the progress we made expanding our clinical development and clinical operations teams. This positions us well to initiate, subject to feedback from the FDA, a Phase 2/3 clinical trial evaluating gedatolisib in combination with palbociclib and an endocrine therapy in patients with ER+/HER2- advanced or metastatic breast cancer in the first half of 2022."
Second Quarter 2021 Business Highlights and Other Recent Developments
In early April, Celcuity entered into a worldwide licensing agreement with Pfizer for the exclusive right to develop and commercialize gedatolisib.
Celcuity closed two significant financings to support development of gedatolisib. In early April, Celcuity entered into a debt financing agreement with Innovatus Life Sciences Lending Fund I, LP to provide up to $25.0 million in term loans with the first tranche of $15.0 million funded at closing. In early July, Celcuity completed a follow-on public offering that raised gross proceeds of approximately $56.3 million.
In April, Celcuity presented results of studies evaluating gedatolisib, inavolisib (a PI3K-α inhibitor), and navitoclax (a BCL inhibitor) in breast and ovarian patient tumors in two posters at the American Association for Cancer Research (AACR) (Free AACR Whitepaper) Annual Meeting. The results showed that gedatolisib inhibited nine times more signaling test activity in tumors with hyperactive RAS network signaling, on average, than inavolisib, when evaluated at equal concentrations with the CELsignia test.
In June, Celcuity announced the addition of Igor Gorbatchevsky, MD, as VP of Clinical Development and Jill Krause as VP of Clinical Operations to Celcuity’s leadership team. Dr. Gorbatchevsky has over two decades of hands-on oncology drug development experience, including successful regulatory IND and NDA/BLA filings across several drug classes. Ms. Krause has deep clinical operations expertise, including over nine years of experience managing and executing trials in breast cancer. Since joining Celcuity, Dr. Gorbatchevsky and Ms. Krause have each added key members to their respective teams.
In July, results from a 17-patient Phase 1 study that evaluated the safety and preliminary activity of gedatolisib combined with carboplatin and paclitaxel were published in the journal, Clinical Cancer Research1 . The study was designed to explore the hypothesis that inhibition of the PI3K/mTOR pathway can promote sensitivity to platinum-based treatment. The objective response rate (ORR) was 65% (11/17) patients: eight partial responses (PR) and three complete responses (CR) were reported. The stable disease rate was 17% (3/17). Promising results were observed in patients with advanced clear cell ovarian carcinoma (CCOC), a tumor type with poor prognosis generally considered to be chemo resistant. The ORR in patients with CCOC was 80% (8/10), of which 3/10 (30%) reported a CR. Among nine previously platinum-treated patients, 45% (4/9) had a PR (two patients with CCOC, one low grade serous ovarian cancer and one NSCLC). The drug combination was found to be tolerable with a manageable safety profile.
Second Quarter 2021 Financial Results
Unless otherwise stated, all comparisons are for the second quarter ended June 30, 2021, compared to the second quarter ended June 30, 2020.
The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes on Form 10-Q for the second quarter ended June 30, 2021.
Total operating expenses were $13.6 million for the second quarter of 2021, compared to $2.2 million for the second quarter of 2020.
Research and development (R&D) expenses were $13.1 million for the second quarter of 2021, compared to $1.8 million for the second quarter of 2020. The increase during the second quarter of 2021 compared to the prior year, primarily resulted from a $10.0 million upfront license fee related to the execution of the Pfizer license agreement, which included $5.0 million of non-cash expense for the issuance of common stock. The remaining increase in expenses related to compensation, clinical validation and laboratory studies and legal expenses.
General and administrative (G&A) expenses were $0.6 million for the second quarter of 2021, compared to $0.4 million for the second quarter of 2020. The increase in the second quarter of 2021 arose primarily from higher professional fees associated with being a public company, director and officer insurance and non-cash stock-based compensation.
Net loss for the second quarter of 2021 was $14.0 million, or $1.11 loss per share, compared to a net loss of $2.2 million, or $0.21 loss per share, for the second quarter of 2020. Non-GAAP adjusted net loss for the second quarter of 2021 was $8.3 million, or $0.66 loss per share, compared to non-GAAP adjusted net loss of $1.8 million, or $0.17 loss per share, for the second quarter of 2020. Non-GAAP adjusted net loss excludes stock-based compensation expense, issuance of common stock and non-cash interest. Because these items have no impact on Celcuity’s cash position, management believes non-GAAP adjusted net loss better enables Celcuity to focus on cash used in operations. For a reconciliation of financial measures calculated in accordance with generally accepted accounting principles in the United States (GAAP) to non-GAAP financial measures, please see the financial tables at the end of this press release.
Net cash used in operating activities for the second quarter of 2021 was $7.6 million, compared to $1.6 million for the second quarter of 2020.
At June 30, 2021, Celcuity had cash and cash equivalents of $41.6 million, compared to cash and cash equivalents of $11.6 million at December 31, 2020. On April 8, 2021, Celcuity paid an upfront license fee of $5.0 million in conjunction with the Pfizer gedatolisib license agreement and received $14.4 million of net proceeds from a debt financing agreement. On July 1, 2021, Celcuity completed a follow-on equity offering of common stock that resulted in gross proceeds of approximately $56.3 million. After the follow-on offering, Celcuity had approximately $94.4 million of cash on hand.
Anticipated Milestones
Celcuity expects to achieve the following potential milestones over the next twelve months:
Announce an additional clinical trial collaboration utilizing the CELsignia platform in the second half of 2021.
Initiate a Phase 2/3 clinical trial for gedatolisib in patients with ER+/HER2- metastatic breast cancer in the first half of 2022, subject to feedback from the FDA.
Provide an update on the lifecycle development plan for gedatolisib in the first half of 2022.
Provide interim results from the FACT-1 and FACT-2 trials in late 2021 or early 2022.
Webcast and Conference Call Information
The Celcuity management team will host a webcast/conference call at 4:30 p.m. ET today to discuss the second quarter financial results and provide a corporate update. To participate in the teleconference, domestic callers should dial 1-844-369-8770 and international callers should dial 862-298-0840. A live webcast presentation can also be accessed using this weblink: View Source . A replay of the webcast will be available on the Celcuity website following the live event.