Bio Green Med Solution, Inc. (BGMS) Q2 2018 Earnings Report, Transcript and Summary

Good afternoon and welcome to the Cyclacel Pharmaceuticals' second quarter 2018 results conference call and webcast. Today's call is being recorded. At this time, all participants have been placed a listen-only mode and the floor will be open to questions following the presentation. [Operator Instructions]. The company will also be accepting a limited number of questions submitted via e-mail to the address ir@cyclacel.com. It is now my pleasure to turn the floor over to the company.

Good afternoon everyone and thank you for joining today's conference call to discuss Cyclacel's financial results and business highlights for the second quarter of 2018. Before turning the call over to 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 judgments 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 thank you everyone for joining us today for our second quarter 2018 business update call. On today's call, we will provide an overview of Cyclacel's clinical programs as well as key anticipated milestones for the remainder of this year. We will then provide highlights for the second quarter 2018. We will begin with an update on our lead program CYC065, a cyclin dependent kinase or CDK inhibitor, of CDK2/9 and remind you of our clinical development strategy for this innovative drug. A little background, the evolution of resistance to available anticancer therapies and/or the addiction of cells to cancer promoting genes or oncogenes are significant challenges in the fight against cancer. In addition to increasing the risk of disease progression and death, these problems represent threats to the investments made by society in funding approved cancer drugs which may be neutralized by resistance mechanisms. In many cancer, resistance correlates with an increase in the expression of pro-survival proteins, such as Bcl-2, Bcl-xL, Mcl-1 and others. These proteins help the cancer cells escape the effects of available therapies and continue to multiply. Cancer cells can also gain an advantage and multiply at the expense of normal cells by becoming addicted to oncogenes, such as MYC and/or cyclin E. At Cyclacel, we are applying our many years of studying cell cycle biology to determine how to disrupt cancer cell resistance and/or break their addiction to oncogenes. To this end, we have developed selective CDK inhibitors such as CYC065 that interfere with transcription of cancer cells in order to suppress Mcl-1 expression with the aim overcoming resistance to Bcl-2 proteins or breaking addiction to oncogenes. CYC065 is designed to disrupt resistance to cancer cells by suppressing Mcl-1. Data presented at the American Association for Cancer Research or AACR 2018 Annual Meeting, from our Phase 1 study highlighted drug's potential by demonstrating durable suppression of Mcl-1 for at least 24 hours after a single dose of CYC065 in 11 out of 13 patients treated at the recommended Phase 2 dose. The clinical findings are supported by preclinical evidence showing that CDK2/9 inhibitors can effectively target cancer cells that have developed resistance following treatments with an approved therapy. Our clinical development strategy is try and overcome this resistance by combining the approved therapy with CYC065. We have initially selected a combination of CYC065 and AbbVie's venetoclax as the first clinical evaluation of this strategy in patients with relapsed or refractory chronic lymphocytic leukemia or CLL. When pseudo-patients progress after front-line therapy, they will often receive venetoclax, a Bcl-2 inhibitor, which however does not suppress Mcl-1. By targeting both Mcl-1 and Bcl-2, the combination of CYC065 and venetoclax may offer a more powerful dual hit alternative to CLL patients in need. This combination study will soon open for enrollment at a premier center of excellence in hematological malignancies in the United States. The product has have been cleared by the scientific review committee and is now pending clearance by the institution's IRB. We are also planning additional studies to evaluate rational combinations of CYC065 in other hematological malignancies such as ALL and AML and in particular, in patients with mixed lineage leukemia rearrangements or MLL-R. Turning to solid tumors. We continue to evaluate CYC065 as monotherapy in part two of the ongoing Phase 1 trial at the Dana-Farber cancer Institute or DFCI in patients with advanced cancers. Part two is evaluating a more intensive schedule of two days per week for two weeks of a three-week cycle. The study will provide important safety and pharmacokinetic and pharmacodynamic data to inform combination trials, including assessment of biomarkers related to the mechanism of action of CYC065, such as those with amplification of Mcl-1, MYC and/or cyclin E. In parallel, we have continued discussions with the principal investigators and cooperative groups with the objective of evaluating 065 in a variety of tumor indications suitable its mechanism of action. Let us now turn to our DNA damage response or DDR program with sapacitabine, our orally available nucleoside analog. In collaboration with DFCI and a pharmaceutical company, we are preparing for a phase 1B/2 clinical study evaluating a combination therapy of sapacitabine and an approved PARP inhibitor in BRCA positive patients with breast cancer. This trial will be an investigator sponsored trial or IST with Cyclacel providing sapacitabine investigational drug. To provide context for this IST, PARP inhibitors administered as single agents are currently approved standard of care for breast and ovarian cancers with homologous recombination deficient or HRD cancers which include those positive for BRCA mutations. Sapacitabine works by an HRD relevant mechanism and has shown promising and durable clinical activity in BRCA mutation positive patients with breast, ovarian and pancreatic cancers. We believe that two therapeutics, administered in combination, could provide additional benefit to these patients for whom limited treatment options exist. We are also pleased to report that CYC140, our in-house discovered polo-like kinase 1 or PLK1 inhibitor has cleared Investigational New Drug or IND review by the FDA. We will be initiating a first-in-human study with this agent during this half. Finally, let's briefly turn to the Phase 3 SEAMLESS study. We have submitted briefing documents and schedule meetings for national scientific advice with certain European Union regulatory authorities with the objective of determining a potential regulatory pathway for sapacitabine in elderly AML. As a reminder, the study did not reach its primary endpoint of improved overall survival. However, an improved higher complete remission rate, a secondary endpoint, was observed. In addition, a large prespecified subgroup with low peripheral white blood cell count demonstrated a trend toward improved overall survival. The opposite was true for the subgroup with high white blood cell count. Cyclacel completed exploratory analyses of further subgroups in SEAMLESS including interaction tests to test the likelihood that subgroup findings are due to chance. Following these analyses, we believe that the subgroup results have defined a patient population for whom the sapacitabine-decitabine alternating regimen may represent an improvement over low intensity treatment by decitabine alone. As we move past the second quarter of 2018, we anticipate opening several clinical studies evaluating CYC065 and CYC140. Before handing the call over to Paul for a review of the financials, let me review key upcoming company goals and milestones for the rest of 2018. We will initiate a Phase 1B clinical trial evaluating CYC065 in combination with venetoclax in patients with relapsed or refractory CLL. We will start enrollment in a Phase 1B/2 IST of sapacitabine and an approved PARP inhibitor combination treatment in patients with BRCA mutant breast cancer. We will initiate CYC065 Phase 1B in advance leukemias. We expect to provide a clinical update from part two of the Phase 1 study evaluating CYC065 monotherapy in patients with advanced cancers. We will conduct EU regulatory authority meetings regarding the SEAMLESS study of sapacitabine in elderly AML. We will initiate a Phase 1 trial evaluating CYC140, a PLK1 inhibitor and will provide a clinical update and complete enrollment of part three of the Phase 1 study of the sapacitabine and seliciclib combination in BRCA positive breast, ovarian and pancreatic cancer patients. I will like to turn the call over to Paul to review our second quarter 2018 financials. Paul?

Thank you Spiro. As you saw from our press release, for the quarter ended June 30, 2018, our cash and cash equivalents totaled $19.8 million, compared to $23.9 million as of December 31, 2017. The decrease is primarily due to $4.1 million of net cash used in operating activities over the last six months. Research and development expenses were flat at $1.2 million for quarters ended June 30, 2017 and 2018. General and administrative expenses for the three months ended June 30, 2018 and 2017 were $1.3 million. The U.K. government research and development tax credit for the quarter was $0.5 million. Net loss for the three months June 30, 2018 was $1.9 million, compared to $2.2 million for the same period in 2017. As of June 30, 2018, $11, 997,447 shares of common stock and 264 or 3% of shares of Series A Preferred Stock are outstanding. Based on the planned clinical studies, we expect current cash to be able to fund the company's operations and outcomes of these studies through the first quarter of 2020. Operator, we are now ready to take questions.

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

Hi. Good afternoon. Hi Spiro. Hi Paul. Thank you for taking the question. So the first one is about CYC065. Mcl-1, it sounds like an interesting target in malignancy that's gathered some attention recently. As you know, at the last AACR and ASCO too, I think, we saw some data from Amgen and also AstraZeneca which is great company, suits you the tee. Is there any sign at this point about what might be differentiation between this compound and those compounds, whether biological or extrapolating into the clinical side? Thank you.

Hi Jotin. Thank you very much for your question. It's not easy to answer the question because we don't, of course, have head-to-head data. We can only speak about different features of each of the two drugs you mentioned. The first one, we understand, is a direct inhibitor Mcl-1. It is not a CDK inhibitor. So it probably works by an entirely different mode of action. We will have to wait for more detailed clinical data before we can speculate on how it might work. As far as we know, we have not heard of Mcl-1 suppression in patients being reported for their agent at this point. The second compound is a CDK inhibitor. We again understand from the literature that this is hitting only CDK 9. We have seen so far only the clinical data. So again, we will hope to see clinical data and particularly its effects on Mcl-1 and in particular the durability of suppression of Mcl-1 without undue toxicity before we comment further on how that compound might compare or differentiate from 065. We can say for sure is at this point based on our presentation over the spring at AACR from the Phase 1 study Dana-Farber CYC065 is the only agent, the directly inhibitor Mcl-1 or via the CDK mechanism that durably suppresses Mcl-1 without causing undue toxicities in patients. So we are excited about that we would like to consolidate our lead on moving forward into combination studies.

Got it. And at this point, is an oral formulation of the compound practical? Is it something the works? What is a reasonable timeframe there?

So I will answer the first part about the strategy on the oral formulation and I will ask Paul to discuss timing. I think for Cyclacel, this is an essential part of a long-term strategy which is to mask administration routes to the disease setting. And the key method, we like to treat patients both in the marrow and hopefully the peripheral blood. So an IV drug has advantages, direct access as well as the avoidance of gastrointestinal issues by the oral route. So we believe an oral formulation is essential to realize the potential of this drug. We have one in development and we hope to bring this to the clinic very soon in the hope of treating patients with solid tumors for whom oral therapy or oral therapy combinations could be substantial improvement in quality of life and possibly extending survival. Paul?

Well, just to add to what Spiro said. Yes, we have an oral formulation under development. It's very advanced. So we really expect to be able to start a Phase 1 study in that oral formulation fairly shortly.

Thank you. And the last question about sapacitabine given, as you know, my interest in AML. So the compound, I am trying to remember the data from Ash from December and there was the 10 benefit in the subgroup with lower white blood cell, which I think it was a larger, rather a solid proportion of patients recruited. So that makes me think of a subgroup with lower disease burden, in one way or another. Now I recall that there used to be a development program in MDS for this compound long before SEAMLESS. Is this suggested that that maybe an interesting again for the future? What was the history of the MDS development? Thank you.

Yes. First of all, your recollection is accurate. This is indeed a subgroup of low disease burden. We believe that low white blood cell count or WBC is a proxy for low disease burden. Clearly, there are patients on the mirror group who don't do very well because the disease is very much advanced. It's possibly even galloping and possibly beyond the point of being able to be helped. So we are interested in exploring the hypothesis behind the subgroup finding, in light of two facts. First of all, the subgroup was prespecified. And two, it's a very large subgroup encompassing two-thirds of the patients in the Phase 3 study. It's over 300 patients, which is bigger than some NDA approved data sets in the same indication of AML. Now you asked a secondary question about MDS and this portends any prospects for the drug in MDS. And the answer is yes. We do believe, however, that MDS is a different disease state than AML. As we all know, it's a disease of bone marrow failure, not of blast growth displacing normal cells, as is the case with AML. The company is very interested in MDS, both with sapacitabine and with other drugs. We continue to look at the potential of applying it, but first order of business is to have the regulatory consultation with the designated European authorities about the SEAMLESS data set and will then decide based on the feedback how to move forward. Just to remind everybody, we have done a large Phase 2 program in MDS patients who fail front-line therapy using hypomethylating agents which showed a promising CR rate. But this program did not move forward to Phase 3, as we have committed ourselves to doing so in the AML setting first. So this is something we continue to be interested, both for. sapacitabine and other drugs and we will come back to that after regulatory consultations are over.

Thank you very much.

Thank you. Jotin.

Thank you.

And at this time, there are no further questions. I will like to turn the call back over to the company.

Thank you and thank you all for participating in our second quarter 2018 business update call and for your support of Cyclacel's efforts to develop drug candidates that have the potential to enhance treatment options for patients with cancer. We look forward to updating you on our continued progress and meeting some of you at upcoming conferences. Operator, at this time, you may end the call.

And at this time, this does conclude today's call. You may now disconnect.