Cellectar Biosciences, Inc. (CLRB) Q4 2014 Earnings Report, Transcript and Summary

Good day ladies and gentlemen and welcome to the Cellectar Biosciences' Fourth Quarter Earnings Conference Call. At this time all participants are in a listen-only mode. Later we’ll conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] And as a reminder, this conference call is being recorded. At this time, I would like to hand the conference over to Miss Kate McNeil, Vice President, Investor Relations. Ma’am, you may begin.

Thank you. Good afternoon and welcome to Cellectar Biosciences' full year 2014 conference call and webcast. We announced our full year financial results this afternoon just after the close of the U.S. financial markets and our press release can be found on our website at www.cellectar.com. Joining me from Cellectar is Dr. Simon Pedder, Chief Executive Officer; Dr. Jamey Weichert, Chief Scientific Officer, Chad Kolean, Chief Financial Officer; Dr. Kevin Kozak, Chief Medical Officer and Dr. Cameron Szakacs, Vice President of Clinical Development. Before I turn the call over to Dr. Pedder, let me note that some of the remarks you will hear today may contain forward-looking statements about the company’s performance. We may also make forward-looking statements during the Q&A session following our prepared remarks. These statements are neither promises nor guarantees and there are a number of risks and uncertainties that could cause actual results to differ materially from those set forth in these forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in these forward-looking statements is contained in our filings and periodic reports filed with the SEC, copies of which are available on our website or maybe requested directly from the company. Forward-looking statements are made as of today’s date and we do not undertake any obligation to update any forward-looking statements made during today’s call. With that said, I will now turn the call over to Dr. Pedder. Simon?

Thanks, Kate and thanks everyone for joining us this afternoon to review the financial and operational results of the past year. Following our prepared remarks we will take some time to answer any outstanding questions. This time last year we hosted our first quarterly conference call with investors and outlined for you our plans to implement changes intended to strengthen our business. These changes covered nearly every aspect of our business from significant corporate changes to a new focused clinical and regulatory strategy. Now, a year later we are beginning to really feel the impact of these initiatives and believe that if we execute our clinical programs as planned in the coming year, the data generated should provide a solid basis for future growth and improved shareholder value. Before we run through the specific achievements of the year, I will ask Chad to provide us with a brief review of the financial results reported for the year and provide an update on our financial guidance. Chad, why don’t you go ahead and get us started.

Thank you, Simon. As Kate indicated, we issued a press release this afternoon, highlighting our financial results for the year ended December 31, 2014. This announcement follows the more detailed financial reporting included in our 10-K that was filed this morning with the SEC and can be found on our website. For the year ended December 31, 2014 we reported a net loss attributable to common shareholders of $8.1 million or $1.77 per share. This compares to a net loss of $10.8 million or $3.86 per share reported the prior year. You may recall that as a result of the management board restructuring that was initiated in 2013; Cellectar recorded approximately $1.1 million in restructuring expense for fiscal year 2013. Those restructuring changes also had a minor impact on the year just ended resulting in an additional $2.2 million in restructuring expenses in 2014. Research and development expense for the year was approximately $6.0 million, a decrease from the approximately $6.9 million reported for the full year 2013. This decrease was primarily attributable to a reduction in salaries and stock-based compensation associated with the restructuring efforts I just mentioned. Similarly for the full year, general and administrative expense decreased from approximately $4.4 million in 2013 to approximately $3.7 million in 2014, primarily as a result of the decrease in stock-based compensation. To recap, we ended the year with $9.4 million in cash and cash equivalents, as opposed to $2.4 million at December 31, 2013. As you may know this improvement is a result of having completed an underwritten offering in August 2014 that resulted in gross proceeds of approximately 13.5 million. After deducting expenses related to the offering, net proceeds to the company were approximately $11.9 million. In addition to bringing in necessary capital, the offering also allowed us to eliminate $4.2 million of debt that was issued in February 2014. This was done by allowing those shareholders that had provided us with bridge funding to exchange their convertible debentures for shares and warrants on the same terms offered to buyers in the August run. With that I will turn the call back over to Simon.

Thanks Chad. While the restructuring efforts and the bulk of the expenses were incurred in late 2013 as Chad mentioned and the meaningful changes that we implemented really began to take shape early in 2014. Following the board and management changes implemented late in 2013, we continued to challenge ourselves to develop a cohesive development strategy that would maximize return, minimize risk and meaningfully advance a very promising portfolio of cancer targeting asset. We recognized immediately that a critical component of this effort would also involve some significant corporate changes. To that end, we began by changing the company name to Cellectar Biosciences to more accurately reflect the assets under development and the considerable research that had already been conducted. Under this new name we made it a strategic priority to increase the visibility of both the existing body of clinical findings and more importantly educate the community on the potential of this technology to radically change the way we diagnose entry cancer through the highly targeted delivery of both diagnostic and therapeutic agents. We prioritize several initiatives to achieve this goal. We created a new business development position and cast Patrick Genn, a long time member of the Cellectar team with leading our efforts to articulate the potential application of our technology and identify potential partners with whom collaborations and/or licensing deals maybe mutually beneficial. We also increased our investor relations efforts, seeking to increase our visibility among institutional investors, ensure clear understanding of our business amongst stakeholders and create an ongoing dialogue with investors. Kate McNeil has been working on this effort, introducing our story to a new audience and seeking opportunity to speak at more investor conferences and implementing practises like these quarterly conference calls. Notably we’ve had an impressed ended [ph] year in terms of pure review publications. As everyone can appreciate these publications were among the most effective ways to dramatically improve awareness of, and interest in our technology, product candidates and company sponsored clinical trials from potential clinical investigators, partners and EBIT investors. Our first publication of the year was without question the most impactful. Jamey and his colleagues provided a comprehensive review of the unique broad-spectre of cancer targeting characteristics of our PLE platform in the cover story of the June 11th edition of Science Translational Medicine, capturing over decades worth of work and highlighting in the flexibility of the platform to be paired with a broad range of pay loads to optimize delivery of both imaging and therapeutic agents directly to malignant tissue. Jamey’s Science and Translational Medicine manuscript was complemented by additional papers of leading [ph] publications like PLOS ONE and Neurosurgery and several conference presentations. Collectively detailing the results of clinical and preclinical research, highlighting the potential of our agents as imaging agents, diagnostic PET imaging agents, therapeutic agents and as marginal illuminated surgical aids. As a result of these efforts we now have more people engaged in our story, tracking our progress and looking for ways to become involved either by the way of partnership, shared ownership or clinical trial participation, all of them with a keen interest on our new clinical development strategy and anticipated data. In 2014 we focus our development strategy to leverage existing data to advance those assets with the most immediate potential application and rapid path towards commercialization. In addition, to clear unmet medical need and supporting clinical and pre clinical data, we prioritized programs targeting indications for which there were low barriers to entry due to lack of competitive – or ultimate treatments in which we felt there would be regulatory efficiencies to bring by product to market. Key to this was securing orphan designation from the FDA as we have now done for both our glioma and multiple myeloma programs. This designation was critical, both in respect to the seven years of marketing exclusivity provided to orphan products upon approval and the advantageous it provides in structuring smaller clinical trials requiring fewer patients to support a new drug application and allowing for ongoing dialogue with and assistance from the agency in designing clinical programs that adequately characterise the benefit in a limited patient population. In addition to securing these two orphan designations we also initiated a Phase II trial of our PET CT imaging agent I-124 in patients with glioblastoma, and received clearance from the FDA to initiate our Phase I/II study of our radio therapeutic I-131 in patients with relapsed or refractory multiple myeloma. As you will recall from our last call, we indicated the progress in our glioblastoma trial has been slower than originally anticipated, and we were seeking ways to improve on the execution of this trial, including several minor protocol amendments. As a result of these efforts we have seen an increase in the rate of site initiations and in our track to have eight sites operational by the end of this month. We expect to increase number of centers to accelerate enrolment, however, until we’ve had the time to recruit patients it is very difficult to predict with certainty when this trial should be complete, but we continue to expect that we should be able to report data by the end of this year and look forward to updating you during our next conference call as we begin to get a sense for the impact of additional centers. I would like to reiterate that the issues have been logistical in nature and do not reflect the enthusiasm or support our investigators continue to show for this technology. As I mentioned last year, we also secured orphan designation and received FDA allowance to begin a therapeutic trial of our radio pharmaceutical candidate I-131 in patients with relapsed or refractory multiple myeloma. This trial is designed to include three clinical sites, two of which the University of Wisconsin and Mayo Jacksonville have just opened for accrual and are actively screening potential patients. The open label trial will evaluate I-131 in approximately 20 patients with relapse or refractory multiple myeloma who have previously been treated with or intolerant of the existing therapy. The primary objective of this study is to determine the safety and tolerability of I-131 with and without concurrent weekly dexamethasone. In addition, we will also be seeking to identify the recommended dose for future trials and determine therapeutic activity of I-131 in this patient population as measured by overall response rate, time to progression, and duration of response. Patients will be divided into cohorts and will be receiving escalating dosages of I-131 combined with the set dose of dexamethasone. The first cohort of subjects will receive a single 12.5 mCi [ph] per meter squared dose of I-131. A minimum of three subjects will be enrolled at each dose, dose escalation and level expansion will be guided by the safety and evaluations will be performed after all subjects in the cohorts have been followed for 12 weeks following identification of the highest dose. Additional I-131 naïve patients will then be enrolled and treated with the highest dose of I-131 without concurrent oral dexamethasone. Based on the results from our Phase I trials we believe a 12.5 mCi per meter square dose is a meaningful starting dose of I-131 and should allow us to see evidence of clinical activity relatively early in the dose escalation process. Therefore expect to have meaningful data from this study before the end of the year. Finally, last year we wrapped up the remaining IND-enabling tox work for our tumor illuminating agent CLR 1502. Having recently filed our IND for this program, we are awaiting sound [ph] determination as to which center will serve as the lead in the agency to review, but anticipate that once the IND is cleared we should be able to get our plan proof of concept Phase I trial in patients undergoing lumpectomy started in the late third quarter at three sites, the University of Wisconsin, M D Anderson and the Medical College of Wisconsin. This will be a dose ranging multi site trial in approximately 20 patients undergoing lumpectomy in which we hope to estimate the safety, determine the imaging sensitive dose levels and characterise the sensitivity and [plus necessity] of CLR 1502 in identifying malignant tissue. Because of the small size of the study and the availability of patients for the indication the quality of the centers participating in this study we expect that once initiated the trial will move fairly quickly. As we look ahead to the coming year, it is clear the execution will be our critical objective. We have spent the last year identifying and establishing our co-development programs, obtained in the regulatory clearance to begin two of them and are on the cusp of moving our third into the clinic. To support these efforts, we further strengthened our management team in the fourth quarter, by appointing Dr. Cameron Szakacs as our Vice President of Clinical Development. In his newly created position, Cameron will play a role instrumental in guiding our clinical programs and we expect his drug development experience, deep scientific knowledge, regulatory experience and proven leadership capabilities will be of significant value as we advance these critical programs. With the addition of Cameron and Chad who joined us as our new CFO in May of last year and helped complete a critical financing and uplifting we have completed the management restructuring initiated in 2013. We now have a strong management team, a clear development strategy, a pipeline of promising oncological assets, the considerable efforts and achievements of the past year allow us to begin 2015 with a new NASDAQ listing data from three meaningful clinical programs on the horizon, a growing audience of supporters and we believe much to look forward to. As I said at the close of our first call last year, I believe the roadmap is clear, our team capable and committed to delivering results worthy of the promise of our technology. With all that said, Chad, Jamie, Kevin, Cam and I would like to open up the call for Q&A. Operator, do we have any questions at this time.

Thank you, sir.[Operator Instructions]

Simon, while we are waiting to see if there are any questions online we did receive a question from an investor via email part at the start of the call, so I’m going to go ahead and read that to you to address. Would you please estimate the date for I-131-CLR1404 data, I didn’t see an estimated date in today’s 10-K and the last presentations that you expected in 2015 for the clinical trials.gov record has December 2016 as the estimated study completion date. Thank you.

Thanks Kate. Well as I mentioned in our prepared remarks we expect to see data relatively early in that study since we think we are starting out with a significant dose as seen in our Phase IA and IB that was done in solid tumors. To the point that we think we’ll have some very interesting data by the end of 2015. The actual date that’s put into clinical trials.gov is often the estimation of the entire completion of the study which most often means a complete study report finalized and sent off to the agency. We certainly would not move that late, we think that early data will be indicative of whether or not to move the program forward and that’s why we think we’ll have meaningful data before the end of 2015.

Thank you, Simon. Operator, do we have any other questions on the line at this time?

I’m showing no one in queue at this time.

All right in that case, I’d like to thank everybody again for joining us for today’s call and hope you will continue to follow our progress. We look forward to speaking with you again all very well soon and have a great evening everyone. Thank you.

Ladies and gentlemen, thank you for participating in today’s conference. This concludes our program. You may all disconnect and have a wonderful day.