Bio Green Med Solution, Inc. (BGMS) Q3 2018 Earnings Report, Transcript and Summary

Good afternoon and welcome to the Cyclacel Pharmaceuticals' Third Quarter 2018 Results Conference Call and Webcast. Today's call is being recorded. At this time, all participants have been placed in a listen-only mode and the floor will be open for your 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 third quarter of 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 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?

Thank you Alex and thank you everyone for joining us today for our third quarter 2018 business update call. On today's call, I will begin with an overview of Cyclacel's clinical programs and progress in the third quarter 2018 and I will then turn the call over to Paul to provide financial highlights which will be followed by a Q&A session. Let's begin with an update of our lead program CYC065, a cyclin dependent kinase inhibitor or CDK2/9. In the ongoing battle against cancer we are facing a growing problem of resistance to cancer drugs. This occurs when drugs stop working against cancers after early effectiveness. Drug resistance increases the risk of disease progression and death, but can also undermine the significant resources expended in discovering and reimbursing innovations in cancer therapies. In many cancers resistance correlates with increased expression of members of the Bcl-2 protein family including Bcl-2, Mcl-1 and others. These proteins assist cancer cells in evading the effect of available therapies and promoting growth. They have been dubbed pro-survival proteins as they help cancer cells survive the effects of anticancer drugs and gain an advantage over normal cells. Suppressing pro-survival proteins is therefore a promising therapeutic strategy. Multiple studies show that suppression of Bcl-2 and/or Mcl-1 makes cancer cells again sensitive to the drug that stop working which then leads to cancer cell death. One such drug, venetoclax or Venclexta from [indiscernible] has been approved for second line CLL. It works by inhibiting Bcl-2 but has no significant activity against MCL-1. At Cyclacel our approach is to leverage our knowledge of cell cycle biology to disrupt cancer resistance. CYC065, our lead CDK inhibitor suppresses MCL-1 by interfering with transcription of cancer cells. Transcription is regulated by CDK9, an enzyme targeted by CYC065. In a first in human Phase 1 clinical study presented at the 2018 AACR conference this past spring, a single dose of CYC065 alone resulted in durable suppression of Mcl-1 for at least 24 hours in 11/13 patients treated at the recommended Phase 2 dose. Several patients whose cancers over expressed MCL-1, MYC and/or cyclin E experienced tumor shrinkage and disease stabilization. Following this Phase 1 data which demonstrated proof of mechanism and encouraging for clinical data showing synergy we have been preparing to test a double hit strategy of simultaneously suppressing Bcl-2 and MCL-1 in CLL patients by pairing venetoclax with CYC065. This study has now been open for enrollment and is evaluating escalating doses of CYC065 with venetoclax in patients with elapsed or refractory CLL. In this setting, after failure of front line therapy often with a BDK inhibitor, patients experience rapid growth of leukemia cells. Despite high initial response rates on single agent venetoclax, only one in four patients achieved complete remission. In addition, venetoclax progression is often correlated with elevation of MCL-1. We believe that targeting both MCL-1 and Bcl-2 with a combination of CYC065 and venetoclax may offer an important alternative to CLL patients in need. This study was initially done at MD Anderson Cancer Center as part of our recently announced alliance with this center of excellence. Let me make a few comments on the MD Anderson alliance. This three-year risk sharing partnership will enable clinical evaluation of three Cyclacel drug candidates in patients with hematological malignancies including CLL, AML, MDS, and other advanced leukemias. MD Anderson will conduct four clinical studies enrolling up to 170 patients which will investigate CYC065, CYC140 and sapacitabine either as single agents or in combination with approved therapies. The MD Anderson alliance allows us to power our track the development of our drugs in a cash sparing manner while utilizing MD Anderson's expertise to recruit eligible patients. Of note, Cyclacel remains the sponsor for these studies. In addition to the CLL study and also as part of the MD Anderson alliance, we have activated a first in human study of CYC140 polo-like-kinase or PLK1 inhibitor in patients with advanced leukemias. CYC140 which was discovered in-house has demonstrated clinically that it is a potent and effective inhibitor in both blood and solid cancers. Two further protocols are in development with MD Anderson investigators. They will evaluate combinations of CYC065 and sapacitabine either as single agents or in combination with approved agents. We are continuing enrollment in the CYC065 single agent Phase 1 study in patients with advanced solid cancers at the Dana-Farber Cancer Institute. Following the AACR report of the Part 1 data earlier this year, Part 2 is evaluating a more intensive dosing 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 CYC065's mechanism such as over expression or amplification of MCL-1, MYC or cyclin E. We are continuing discussions with various investigators in evaluating corporative group proposals to determine how CYC065 would add clinical benefit in a variety of other tumor indications suitable to the drug's mechanism. Let us now briefly turn to our DNA damage response program. We are pleased that the Phase 1B/2 clinical study evaluating sapacitabine in combination with the approved PARP inhibitor olaparib or AstraZeneca's Lynparza has started enrollments of BRCA positive patients with breast cancer. This investigator sponsored trial or IST conducted at Dana-Farber is planned to enroll approximately 64 patients. Cyclacel is providing sapacitabine investigation of drug and AstraZeneca olaparib. We have used this IST as another cost effective way to evaluate potential benefits of our drugs in difficult to treat cancers. PARP inhibitors are currently approved standard of care for homologous recombination deficient or HRD positive patients with breast and ovarian cancers which include those positive for BRCA mutations. Sapacitabine works by HRD relevant mechanism that is distinct from the MOA of PARP inhibitors. Sapacitabine has durable clinical activity including CR and PR in BRCA positive patients with breast, ovarian, and pancreatic cancers. The two therapies administered in combination could thus provide additional benefit to these patients for whom limited treatment options exist. Lastly, an update to our work with data from the sapacitabine Phase 3 seamless study in elderly AML. We met with three European regulatory authorities who provided consistent advice on next steps and a proposed methodology. This was an unexpected but welcome development which suggests that there is potentially a path forward to a regulatory submission. As a result of the guidance Cyclacel is evaluating a potential request for a meeting with the scientific advice working party of the European Medicines Agency. On the corporate front we have been fortunate to be working with a highly experienced Board of Directors over the years. Consistently with this history we have recently welcomed Dr. Robert Spiegel to the Board. Bob brings a 30-year track record in R&D and operational experience as a senior executive in biopharmaceutical companies and as an advisor to investment funds. He spent 25 years at Schering-Plough, acquired by Merck where he joined as the first director for oncology clinical research. Bob's expertise will support the development of our pipeline and our corporate strategy. In summary, we continue to execute on our strategy to rapidly advance CYC065 and CYC140 clinical development. Our recent achievements include entered into clinical development alliance with MD Anderson which enables power tracking of these preclinical candidates in a cash sparing manner. Opened enrollment of the Phase 1B clinical trial evaluating CYC065 in combination with venetoclax in patients with relapsed or refractory CLL. Activated a first in human Phase 1 trial of CYC140 PLK inhibitor in advanced leukemias. Dosed the first patient in a Phase 1b/2 IST of sapacitabine and olaparib combination in BRCA positive patients with breast cancer. Continued enrollment in Part 2 of the Phase 1 study evaluating CYC065 monotherapy in patients with advanced cancers and completed meetings with three EU Regulatory Authorities with the aim of determining next steps regarding the seamless data of sapacitabine in elderly patients with AML. I would now like to turn the call over to Paul to review our third quarter 2018 financials. Paul?

Thank you, Spiro. As you saw from our press release for the quarter ended September 30, 2018 our cash and cash equivalents totaled $19 million compared to $23.9 million as of December 31, 2017. The decrease is primarily due to $4.7 million of net cash used in operating activities over the last nine months which includes $1.2 million of R&D tax credit received in this quarter from the United Kingdom Government. Research & Development expenses were $1.2 million compared to $1 million for the same period in 2017. General and administrative were $1.3 million compared to $1.2 million for the third quarter of 2017.The UK Government's R&D tax credit for the quarter was $0.3 million. The net loss for the three months September 30, 2018 was $2.1 million compared to $1.9 million for the same period in 2017.As of September 30, 2018 11,997,447 shares of common stock and 264 or 3% of shares of Series A preferred stock are outstanding. Taking into account the cash-sparing consequences of the MD Anderson alliance, we have believed that our cash and marketable securities of approximately $19 million as of September 30, 2018 will be sufficient to finance operations into the second quarter of 2020. Operator, we are now ready to take questions.

[Operator Instructions] Our first question will come from the line of Jotin Marango with ROTH Capital.

Hi Good afternoon. Thank you for taking my question. I have one on each of the program. On CYC065 the study is open for enrollment. So congratulations on the pace of moving this forward there. Spiro, could you give us some colour on the type of patients that we might be likely to see treated with the doublet, so will it be patients that are refractory to venetoclax or who have failed or may be to the patients that have chosen to take a doublet instead of just venetoclax?

Good afternoon Jotin. This is a question for Judy and Judy would you like to take that?

Yes and the patient population is those that have failed front line treatment of CDK inhibitor and then they are on staple doses of venetoclax. So they are refractory, relapsed patients after the front line therapy.

So they have not experienced venetoclax before, so as you suggest they had elected to also have CYC065 in addition to receiving the venetoclax?

Got it and so when would it be realistic to start expecting some data here just reasonable preliminary Phase 1 so there is a reasonable group let's say height of temptations?

I would think within the next six months if the study progresses as expected. This is an open label study. The primary indicator of efficacy is complete remission. So we should know fairly quickly whether the combination is effective. The benchmark to beat is the activity of venetoclax alone. If we look at the FDA approved label as a single agent venetoclax has a CR of about 20% and in combination with rituximab it goes up to 27%. So this is a useful metric to keep in mind even though one has to put in the usual caveats for cross study comparisons.

Thank you. On CYC140 the new PLK inhibitor, could you just recap for us just the highlights of you know the clinical points of differentiation of this compound past versus prior PLK targeting agents such as [indiscernible] which was advanced in AML previously?

Okay, so let me answer your question in terms of points of differentiation. We believe this is an important therapeutic class. The target was discovered by our former Chief Scientist Professor David Glover who also discovered other mitotic kinases like Aurora. I've been in clinical investigation over the years. The perhaps the most recent clinical development program was conducted for a drug called Volasertib by Boehringer Ingelheim. It’s a PLK inhibitor. The compound went all the way to Phase 2 received Breakthrough Therapy designation from the FDA but had safety issues in Phase 3. We believe that a more selective PLK inhibitor particularly selective for the PLK1 isoform over 2, 3 and 4, could have potential advantages. We think the therapeutic applications should be in liquid cancers first, in particular advanced leukemias as we know from the experience of Volasertib that this is an area where therapeutic advantage can be shown as a single agent. So perhaps here, unlike our CDK program we have somewhat higher expectations of activity. One has to have to be balanced in cautioning that safety is always a concerned for a drug never before tested in humans. One has to be patient and wait for a safe and effective dose to emerge from the Phase 1 program. But we think differentiation essentially based on selectivity and a better physical chemistry and for pharmaceutical properties profile.

Thank you. And lastly sapacitabine, you mentioned that you have spoken to three authorities across the ocean and you may request a meeting with EMA scientific advice working group. So just I guess perhaps I'm not as familiar with the European bureaucracy and who is, but what function does that body usually play at this stage, so the Scientific Advice Working Party, does it evaluate your data or does it give you any data driven guidance, so some color on that please? Thank you.

Yes, the Scientific Advisor Working Party is a formal part of the EMA. Sponsors are welcome to make submissions usually on drugs that are designated orphan. However, others may of course request scientific advice. The value of consultation is that usually it provides the sponsor with some directional guidance as to what type of approach the agency will accept in the potential marketing authorization application. So it's a very important part of the process in gaining confidence before one launches on the long and arduous road to file a submission and prosecute through the system. As a pre-step to a discussion with the EMA relevant bodies, we have chosen as many other companies do to consult with three authorities who we and our experts believe are highly regarded within the peer group of more than 20 countries that comprise the membership. The value of having this consultation is that one can potentially obtain useful insights into what other issues are likely to be raised at the full plan and the full committee which is called the Committee for Medicinal Products or CHMP. And as you've heard we had this surprising turn of events in that the agencies we spoke to gave us specific and consistent guidance on the methodology which when evaluating for a potential submission to the SAWP as a prerequisite to making a decision on submitting a full marketing authorization application. I should caution there's no guarantee of success in this process but we find it encouraging that they A, gave us consistent advice and B, there's a clear methodology which is also cited in previous guidance that EMA has issued to applicants in situations such as the one that is included in our SEAMLESS trial.

Okay, Thank you very much, igorash [ph]

Thank you. Igorash [ph].

Your next question comes from the line of Wangzhi Li with Ladenburg Thalmann.

Hi, thanks for taking my question. Just maybe a little bit more color on the CYC6251 Phase 2 trial in combination with venetoclax in the AML patients. Maybe I'm missing, how many patients will you enroll and how many sites are you enrolling patients right now?

Judy?

Well vene is only going to be enrolled starting with MD Anderson it can be extended at the site if we need it. It’s a typical Phase 1b studies, we’re looking for safety of the combinations, in general it’s in about 20 to 25 patients.

Let me also add one lead to Judy's comment that the agreement with MD Anderson permits us to go to additional sites, there are no restrictions. Obviously we are motivated as they are due to the early evaluation within the alliance, but if we have hopefully some signals of success and we’re willing to expand to other sites we are contractually free to do so.

Got it. And the dosing schedule is two days, every two weeks of the three weeks cycle?

Well, the dosing schedule is what safety dose that we worked out from the Phase 1 trial in solid tumors and we will be combining with the safer dose of [indiscernible].

Should one per hour infusion in two weeks?

Something like that, two hours infusion, yes.

Every three weeks, yes.

Okay. So just kind of maybe anything better by that, do you think it’s better or beneficiary to dosing more frequently to maintain this operation Mcl-1, I mean and I think you’re testing that different schedule in the Phase 1, Part 2, right?

Well, the dosing is always a challenging area. I think one has to first of all making sure that the combination schedule is generally custom to single agents in the type of cancer before you combine them. I think that because CDK9 inhibitor by itself is expected to have only two by itself as a single agent and CLL. I think that this current dosing schedule is the safest we can do as the first step.

Okay, got it. And last question is, how maybe you mentioned after the MD Anderson deal, how much extension for you case running authorization?

This will be a question for Paul.

Yes, Wangzhi, thanks for the question. In our remarks, we have mentioned that we have extended our cash flow runway now to the second quarter of 2020 and our previous guidance was to the beginning of 2020.

Okay, so two quarters more. Okay, got it. Thank you very much.

Thank you.

[Operator Instructions] And at this time, there are no further questions and I would like to turn the call back over to the company.

Thank you and thank all of you for participating in our third quarter 2018 update call and your support of Cyclacel's efforts to develop drug candidates with the potential to enhance existing therapies and address cancer resistance. We look forward to updating you on continued clinical progress and meeting some of you at the forthcoming ASH conference. Operator, at this time, you may end the call.

Thank you, ladies and gentlemen. That does conclude today's call. You may now disconnect.