Greetings, and welcome to Celcuity Fourth Quarter and Full Year 2021 Results Conference Call. At this time all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Mr. Robert Uhl. Thank you, sir. You may begin.

Thank you, Laura. Good afternoon, everyone, and welcome to Celcuity's fourth quarter and full year 2021 financial results and business update webcast and conference call. Thank you for joining us. Earlier today, Celcuity Incorporated released financial results for the fourth quarter and full year ended December 31, 2021. The press release can be found on the Investors section of our website. Joining me on the call today are Brian Sullivan, Celcuity's Chief Executive Officer and Co-founder; Vicky Hahne, Chief Financial Officer; as well as Igor Gorbatchevsky, Chief Medical Officer, who will be available during the Q&A. Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements. These statements involve a number of risks and uncertainties, which are outlined in today's release and in our reports and filings with the SEC. Actual events or results may differ materially from those projected in the forward-looking statements. Such forward-looking statements and their implications involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. On this call, we will also refer to non-GAAP financial measures. These non-GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the company's current performance. Management believes the presentation of these non-GAAP financial measures is useful for investors' understanding and assessment of the company's ongoing core operations and prospects for the future. You can find the table reconciling the non-GAAP financial measures to GAAP measures in today's press release. So with that, I would like to turn the call over to Vicky Hahne, Celcuity's CFO, to review the financial results prior to a business update.

Thank you, Robert, and good afternoon, everyone. I'll provide a brief overview of our financial results for the fourth quarter and full year of 2021. And I invite you to review our 10-K, which will be filed later today for a more detailed discussion. After my remarks, Brian will provide a corporate update that includes a presentation that can be found on our website or through the link in our earnings press release. Our fourth quarter net loss was $6.8 million or $0.45 per share compared to $2.6 million net loss, or $0.25 per share, for the fourth quarter of 2020. Net loss for full year 2021 was $29.6 million, or $2.21 per share, compared to $9.5 million, or $0.92 per share, for the same period in 2020. Because these quarterly net losses include significant non-cash items, including stock-based compensation, the issuance of common stock and interest, we also include in our press release non-GAAP adjusted net loss for the quarter and full year ending December 31, 2021. Our non-GAAP adjusted net loss was $5.6 million, or $0.37 per share, for the fourth quarter of 2021 compared to non-GAAP adjusted net loss of $2.1 million, or $0.21 per share, for the fourth quarter of 2020. Non-GAAP adjusted net loss for the full year 2021 was $21.4 million, or $1.60 per share, compared to non-GAAP adjusted net loss of $7.7 million, or $0.75 per share, for the full year 2020. R&D expenses were $5.5 million during the fourth quarter of 2021 compared to $2.1 million for the fourth quarter of 2020. R&D expenses for the full year of 2021 were $25.8 million compared to $7.7 million for the same period in 2020. The approximately $18.1 million increase during the full year of 2021 resulted primarily from a $10 million upfront license…

Thank you, Vicky. Good afternoon everyone and thank you for joining us today. As always, we appreciate your continued support of Celcuity. In my remarks, I'll first provide a brief update of key activities over the past few months and then provide a more detailed update of the clinical development program for gedatolisib. My remarks will include a review of the pivotal Phase 3 trial design we recently finalized. And this study will evaluate gedatolisib in patients with HR-positive/HER2 negative advanced breast cancer. I will refer to the slide number of the presentation that corresponds to my remarks, and then we'll open up the line for questions. So now please turn to Slide 4. We laid important groundwork to advance our gedatolisib breast cancer program during the past few months. In November, we entered into a clinical trial collaboration and supply agreement with Pfizer to provide palbociclib, known commercially as Ibrance for use in our Phase 3 clinical trial at no cost to Celcuity. This will result in substantial cost savings for our Phase 3 study. In December, we presented updated Phase 1b data during a Spotlight Poster-Discussion Session at the 2021 San Antonio Breast Cancer Symposium. The updated data provided additional information about the characteristics of enrolled patients, the impact of the dosing schedule on efficacy, time to first response and duration of treatment. The promising antitumor activity and tolerability of the therapy in patients treated with the three weeks on, one week off, gedatolisib regimen, supports use of this dosing schedule in our pivotal study. In January, the FDA granted Fast Track designation to gedatolisib for the treatment of patients with HR-positive/HER2-negative advanced breast cancer after progression on CDK4/6 therapy. Fast Track designation is granted by the FDA for products, which demonstrates the potential to address a serious…

At this time, we'll be conducting a question-and-answer session. [Operator Instructions] Our first question comes from the line of Maury Raycroft with Jefferies. You may proceed with your question.

Hi. Congrats on the update today and thank you for taking my questions. My first question is just…

Hello.

Hi. Can you hear me?

I can hear you.

Okay. Okay. Great. First, I was wondering if you can talk about the conversation with FDA on the different stratifications for the Phase 3 that you have listed on Slide 16. How these factor into your hypothesis for gedatolisib? And are you powered based on any of these stratifications?

Well, I'll say a brief comment and then Igor can fill in the gaps. So the stratification variables are ones typically found in these studies. So there was nothing unusual about them. And we're following conventional statistical powering of those subgroups. Igor, maybe you could expound on that a little bit.

Yes. Thank you for the questions. Certification factors used to make sure that arms are balanced for important clinical parameters in each study arm. That's primarily a goal for that. And in terms of study power, it is powered to detect statistical significance but also clinically meaningful difference between study arms, one that Brian mentioned as well as the control arm. That's median progression-free survival. This is the primary endpoint, as you see in the studies, is the main goal with the study power.

Got it. Okay. That's helpful. And then based on the key eligibility criteria that you've got listed, how close do you think you'll be able to get with enrolling a patient population that's similar to Arm D where you show data in the Phase 1b study.

Go ahead, Igor.

I can answer this question. We believe that the results from Study 2151009 Arm D that will present to you – will represent very well this global study involvement and we believe it will be very close into real-world data as you will find information in the poster, median number of prior treatment for these patients were two with a good number of patients receiving at least two number of prior treatments for advanced breast cancer. And that's a population that's very likely to be enrolled in Phase 3 as well.

Got it. That's helpful. And last question, I just wanted to ask about anything you're doing differently in the Phase 3 or proactively in the Phase 3 for managing tolerability, such as stomatitis in the study, if you can talk more about that.

I can answer this question as well. Yes, this study will include very detailed guidance on toxicity management as well as inclusion of prophylaxis that is accepted and expected as well for this patient population. So, for example, steroid-based mouth wash would be mandatory for this patient in this study. And as we presented previously, in the Phase 1b study, the prophylactic therapy was not used for all patients. So we believe that safety signal and profile in the Phase 3 study should be better.

Great. Okay, congrats again and thanks for taking my questions.

Thanks, Maury.

Our next question comes from the line of Gil Blum with Needham & Company. You may proceed with your question.

Hi, everyone and good afternoon and thanks for taking our questions as well. Maybe kind of a general one. It's pretty, pretty large study. I mean any assumptions you guys may have on total cost for a study of this size.

Sure. Well, I guess, the way we look at that is, what is the current cash? Where does that take us? And basically, we think it gets us to roughly the first primary endpoint. And the study will get to the first primary endpoint, probably midway through the study, so that the activities will continue well after we get initial data. And so the trial costs are spread out over much longer periods in just the first two years till we get the initial primary analysis.

Okay. That's very helpful. And maybe just a comment on alpelisib here. It looks like it's – it's not that well tolerated. And do you have any additional comments, especially in comparison to gedatolisib?

Sure. I'll say a few words and Igor might provide some perspective as well. But that's one of the first piece of feedback we received from investigators and from clinicians when we started looking into gedatolisib and bringing it in-house. The alpelisib was approved as an option. It improved outcomes. But there was a very high discontinuation rate in the pivotal study that led to approval, 26%. In the more recent BYLieve study, the discontinuation rate was around 18%. It has very high grade 3, grade 4 hypoglycemia, which – because it's an oral drug, means these patients can potentially become very ill without seeing their doctor for an extended period of time. And from a clinician standpoint, that is very challenging for them and frustrating for them. So we've heard from a number of physicians that said if we just matched, and that's not the objective, but just using it as a reference. The efficacy with the safety profile that our drug has that we would be substantially preferred over that drug just on safety alone. Igor, did I miss anything there?

No, that's a good summary. As it's well published on the discontinuation rate for patients who treated with alpelisib could be quite high in double digits. And it's not only includes hyperglycemia number of other toxicities that could lead to that and our preliminary data from Phase 1b study. And just a reminder, almost 500 patients and healthy volunteers have been treated with gedatolisib as a single agent or in combination with other therapies, safety profile has been established quite well. And based on feedback from experts and potential investigators, it compares – again on papers, of course, this will be first randomized study favorably to other PI3K/mTOR inhibitors.

All right. And maybe a last one, and I can understand that this might be a little hard to estimate. Considering the size of the study, have you guys thought of any COVID-proofing? I mean we've seen some pretty significant delays, especially in January. Thank you.

Right. Well, the patients that we'll be enrolling are ones that are currently receiving treatment and they've progressed. And so, the standard practice for these patients is that they will be put on to new therapies. And the feedback we received from investigators is that these types of trials are ones that haven't been as effective. I mean, obviously, it tends to be very situational, but we'll have a broad geographic dispersion of study sites. We won't be in Russia and the Ukraine. So we won't be impacted by what's going on there. But obviously, we can't predict the future, but if the current trend lines continue, having broad range of countries, a wide number of sites is really about the only steps you can take to mitigate any potential impact of reramping of COVID.

All right. I mean the thought came to me because it is an IV-administered drug and it should be administered in a hospital setting. All right. Thank you very much for taking our question and congratulations on…

You're welcome. Thank you.

…having everything setup.

Thanks.

[Operator Instructions] Our next question comes from the line of Alex Nowak with Craig-Hallum Capital. You may proceed with your question.

Great. Good afternoon everyone. Brian, it looks like you've had two interactions with the FDA regarding the pivotal trial design. So maybe you could just speak to some of the feedback that you received and ultimately how does the design of the pivotal study here change from what your initial conceptions were versus what we're seeing today?

Well, I think, just briefly, I mean, we had very constructive collaborative discussions. And the whole point of it was to get their input on the final study design. We're pleased with the outcome. I mean the really – the second study was really just to confirm what we talked about in the first. This is really our first interaction with the agency and we want us to be as cooperative and collaborative as possible. And so we kind of accomplished our goals and we're very, very happy with the outcome.

That's good. And is the plan to submit for – or I guess, could you submit to FDA for approval based on that first or the second interim analysis? Or I guess how long do you need to run the study, get the bag in information before you have the right data set there to submit just to clarify.

Sure. Igor, why don't you touch on that?

Since the study in both mutated population and wild-type group patients is driven by events, once number of events appropriate for analysis reached, we will initiate discussions with regulatory agencies. And based on this discussion filing could be based on the group of patients that has the results first.

Okay. Understood. And then just any update broadly regarding the FACT studies that are out there. Looks like the FACT 1 and 2 did get moved to the first half of 2023, just I'm sure those due to the Omicron variant, but just thoughts there and ultimately how that affects the time lines for FACT 3, 4 and 5.

Right. So Omicron really did throw around some things. I mean that was a surprise, I think, to everybody as we've talked about on our last call, we saw activity pick up again back in February, but we lost those three months and so had to push back when we expect to have data accordingly. The other studies got similarly affected and – because, again, these patients are coming in for a specific procedure or biopsy that tends to get a little bit more impacted than something that just required drug.

Got it. Understood. Make sense. I appreciate it. Congrats on finalizing the site design here.

Thank you.

Ladies and gentlemen, we have reached the end of today's question-and-answer session. I would like to turn this call back over to Mr. Brian Sullivan for closing remarks.

Well, thank you, everyone, for listening in and participating on this call. We'll be at the Canaccord and Needham conferences in April. We look forward to speaking hopefully with some of you then. If you have any additional questions, please feel free to contact us. Hope you have a good evening.