Good morning, everyone, and thank you for joining us at Needham & Company's 24th annual Healthcare conference. This is the final day, and we almost made it the whole week without any technical difficulties, so I apologize for the delay. My name is Ethan Markowski. I'm a member of the Biotech Research Team here at Needham. It is my pleasure to have Brian Sullivan, Chairperson and CEO of Celcuity with me today. As a reminder, any viewers who are watching through our conference portal are able to submit questions via the Ask the Question feature below the video feed. Brian, I will run things a little quicker today, but before going deeper into the company, I do want to spend just a minute or two on the current market conditions.
There's been a lot of changes even within the past week, but can you start by addressing the potential impact of tariffs on Celcuity as things stand today, at least, as well as the recent leadership change at the FDA? I think the latter is probably more relevant given Celcuity's current stage of development, but I'm curious to hear your thoughts.
We do not expect the tariffs to impact us at all. As far as the FDA, again, we interact with the agency quite a bit just based on breakthrough status. We have the opportunity to conduct meetings on a fairly regular basis. To date, at least, we have not seen a disruption. We are not seeing any email bounce backs, so the people that we normally interact with are still there. I do not know how representative our situation is, but I can say nothing has changed so far. I obviously cannot project that going forward, but no cause for concern at this point.
Great. Great. With that out of the way, we can move more into Celcuity. For the sake of time, I think most people are familiar with the company in general, but maybe just if you could touch on a little bit about the yearly program, gedatolisib. There have been previous attempts to target PI3K. What makes your product unique in that sense?
Sure. One of the most important considerations to take into account when evaluating our drug, gedatolisib, is that it's addressing a pathway that's very different from most oncogenic pathways. That's because this pathway, which we refer to as the PAM pathway, PI3K, AKT/ mTOR, has multiple components or nodes that need to be targeted because they interact with each other. Essentially, inhibiting one of these nodes in the absence of the other can drive compensatory resistance, which essentially negatively impacts efficacy. When this pathway's role was first discovered, pretty much every major pharma developed a PAM PI3K mTOR inhibitor to address what was understood to be the biological imperative in addressing disease involving this pathway, which was comprehensively blockaded.
It was only because that was challenging to equal potently hit all these targets and doing so without inducing a lot of toxicity that you saw a migration towards what we refer to as single node inhibition, hitting PI3K alpha or mTORC1 or AKT. That was not necessarily the optimal approach to address efficacy. Gedatolisib essentially solves the riddle, or at least in our view, solves the riddle. We are able to, with very low nanomolar concentration, inhibit this pathway comprehensively.
To date, safety data we have generated suggests that the patients can tolerate the drug and stay on it. Discontinuation rate associated with our drug has been very low, less than 10%, 9% in breast cancer, and in our most recent study, 4% with our phase III dose. That suggests that we are able to get the benefit of comprehensive blockade without the drawbacks that I think other inhibitors of this pathway have encountered from a safety standpoint.
Great. I think that's a good overview of maybe some of the differentiating features. I do want to spend the majority of today's conversation on the upcoming pivotal readout. Before we do, can you maybe just take a minute to recap the phase I data you saw while also touching on there were some differences in activity between arms C& D of the study?
Sure. The study evaluated 138 patients in various arms that enrolled specific populations, treatment naive, prior CDK, or prior endocrine only, and different schedules. All patients received gedatolisib with palbociclib and either letrozole or fulvestrant, depending on their treatment status. Each of the arms met the ORR endpoint. In the treatment naive patients, frontline patients, the objective response rate was 79%, and the median PFS was over 48 months. It compares very favorably to what's been reported, let's say, with palbociclib letrozole, where 25 months median PFS was the outcome for those patients. In arm D of the study, which we think is the most relevant second line portion of that study because these patients were treated with our phase III dosing schedule, the objective response rate was 63%, and the median PFS was 12.9 months.
Those compare to historical benchmarks for patients in this setting where, for instance, fulvestrant, which is a control in our phase III study, has reported in a number of studies in the population we are evaluating in our VIKTORIA-1 of around two- to three-month median PFS. We think we have shown, at least with our preliminary data, a good distance from what we think is likely to occur with our control therapy. As far as arm C and arm D, arm C and arm D both were evaluating patients with treatment with prior CDK. There are two primary factors that need to be taken into account to explain the differences in outcomes. Arm C had a 36% objective response rate, median PFS of five months, so not as favorable as arm D.
The difference in outcomes we think reflects first the fact that they enrolled different patient populations. Arm C enrolled more heavily pretreated patients. Two-thirds of the patients were third line or worse. 50% had prior chemo, whereas arm D had only 20% prior chemo, and two-thirds were second line patients. The other variable that's important to understand is that in arm C, patients were only on their prior therapy for about five months, whereas in arm D, they were on their prior therapy for about 13 months. That's typically a pretty good prognostic factor of what to expect outcomes to be in their subsequent treatment. Net net, the patients in arm C had less favorable prognostic factors. They're basically more heavily pretreated, so you wouldn't expect them to do as well. We think the other factor that's very important to consider is the different dosing schedule.
Arm C patients were treated on a weekly basis once a week, whereas patients in arm D were treated three weeks on, one week off. The rationale for that approach was that it synchronizes the dose schedule with the palbociclib dose schedule. Because in this disease, you have three pathways interact that essentially are driving the disease and interacting with each other, our hypothesis is that it's important to inhibit these pathways simultaneously, or if you're not inhibiting them, inhibiting them to do that simultaneously as well. We saw a wide difference when we kind of did some regression work, just a statistical analysis of other factors that could explain the big difference in objective response rates and PFS between the arms. What was clear from that analysis was that the dosing schedule was the most important factor. That is why we took that schedule forward into phase III.
I think that's a good opportunity to just remind everyone a little bit more about the study design of the ongoing phase III, as well as maybe how the eligibility criteria are different than the phase I. Maybe one additional question just because it's come up. When you're speaking about the study design, could you also mention how there's measures to essentially prevent outperformance of the fulvestrant arm? I know typically it's two to three months, but some recent studies like postMONARCH showed a little higher, but I think there's some caveats with that data.
Okay. As far as the design, we are evaluating all comers, and then we're assessing their PIK3CA status and assigning patients who lack a mutation to a wild-type cohort and those with a mutation to a mutated cohort. The statistical analysis plans for each of those cohorts are separate, and we're reporting out, we expect to report out the data for the wild-type cohort of patients this quarter. In that study, we have three arms, so we're evaluating the triplet of gedatolisib, palbociclib, fulvestrant, and then comparing as the primary analysis, primary endpoint, that to fulvestrant. We also have, and that's arm A versus arm C. In arm B, we have a doublet, gedatolisib, fulvestrant, and we're also comparing that to arm C, fulvestrant. That's a co-primary endpoint, and we're testing those endpoints hierarchically.
Essentially, we have to, it allows us to spare alpha in the analysis, so it makes it efficient. Test A versus C, the triplet versus fulvestrant first. If favorable, then test B versus C. A similar approach in the mutant cohorts where we're comparing the triplet, in this case, to a control of alpelisib fulvestrant. We have a separate arm that is more of an exploratory data with the doublet of gedatolisib, fulvestrant. As far as the differences in the population for the phase III versus the phase I, we think there are two key criteria that are different and actually kind of result in what we think would be considered a more favorable prognosis for the phase III population and the phase II, phase I B. In the phase III trial, we're not enrolling patients.
They're not eligible if they've received prior chemo in the advanced setting, whereas the early phase study did. That's relevant because patients who have received prior chemo in the advanced setting tend to receive less benefit from a targeted therapy. Again, probably to the good. The other difference is that the phase 1b study only enrolled patients who had visceral disease. 80% had liver or lung mets, which was a disproportionately high amount. None of the patients had bone-only mets. In the phase III study, we are allowing patients who have bone-only mets as long as they have a measurable soft tissue component, lytic or lytic blastic lesion. That's relevant because patients who have bone-only disease tend to respond more favorably, have a more durable progression-free survival period than patients who have visceral mets.
By including a portion of those patients, which we think is likely to be in the 15% range, again, it is a more favorable prognostic factor. The other way to look at it is that in arm D, the median duration of the patient's prior therapy was around 13 months. The typical treatment period for women who are receiving a CDK4/6 and endocrine therapy who are endocrine sensitive is about 20 months, plus or minus.
We would expect the patients who are enrolling in this study to have had a duration of treatment that is closer to that 20-month period than the 13-month period. We cannot project exactly what we think, but we think most of the patients that we enroll will primarily be second line. Patients who've had two endocrine therapies are eligible, but we think just because of the treatment paradigm, it's most likely that we will have a population that's primarily receiving their second line of therapy.
Right. There's a lot of attention. The wild-type readout or the wild-type portion of the study is expected to read out in the coming months. Can you just guide us on what you're looking for in terms of activity, particularly in terms of median PFS? I know you also have been talking about hazard ratio as well. What are your expectations going into it?
Sure. We expect to stay in this quarter. If you look at, I think there have been four randomized studies that have used fulvestrant as a control enrolling a population similar to ours. The key factors to take into account are, do they have measurable disease or not? Have they had prior CDK? Those are the two most important characteristics to consider when looking at that data. Those results, three of those studies reported two months median PFS for fulvestrant, 1.9, 1.9, 2.1. The other study about 2.8, 2.9. We think it's most likely, I mean, if we just use that data and say, develop a probability, we'd say it's most probable that it would be in that two and a half- to three-month range. As far as what we need to see, again, there's two components to that.
One is, what do you need to see to be clinically relevant? What is a clinically meaningful outcome? The input we've received from KOLs in this area, as well as regulators, is that you need to show an incremental benefit of roughly three months relative to control. We would certainly hope to be better than that. We're not indicating that's where we'd be 100% satisfied, but certainly that gets you in the game. There's a good example of a drug that was recently launched in breast cancer that had a benefit of about that much called capivasertib, which is only approved to treat patients with a PIK3CA mutation. Nonetheless, in that study area, fulvestrant was two months, and their median PFS was 5.5 months in patients who had prior CDK.
That drug in 12 months, their revenue run rate was $600 million, which tells me two things. One, there's a very, very strong interest in any drug for this patient population that can provide an incremental benefit. In the case of capivasertib, it didn't demonstrate superiority relative to what had been the standard of care for these patients, which is a drug called alpelisib, PI3K alpha inhibitor. Alpelisib reported about seven months in a separate study. It would suggest that Capi at best is maybe comparable efficacy, but has a much better safety profile. With only a better safety profile, dramatic shift away from alpelisib, dramatic increase in overall penetration of this drug for this population. It just, I think, provides some validation of the relevance of incremental three-month benefit being important.
The other characteristic that matters, and you alluded to this, is the hazard ratio. Because what's occurring now is that there are several studies that will be reporting or have reported recently that are enrolling a pretty heterogeneous population, which means they're enrolling first-line patients, second-line patients, patients who've had prior CDK or not. As a result, when you report that data, it's very hard to interpret. Certainly, if you're an oncologist, you need to know, well, how well can I expect this drug to work in a patient who's already had CDK4/6? The data that's been provided then, the absolute numbers are hard to just assign much weight to. The hazard ratio helps net that out.
It allows you to do a cross-draw comparison that factors out some of the differences in the control arm, for instance, because it allows you to, in effect, isolate the proportional effect on the drug. We think that will help give a tool to investigators. We have heard from them that improvement in the hazard ratio ultimately, when the data has different hard-to-interpret data sets, ultimately becomes what they have to rely on.
We think that will be very relevant. We will make sure we help put that type of data in the proper context, because that is really what we are talking about. It is how to assess data properly. Nine months, if your control was five months, is different than nine months if your control was two months. The absolute number is the most relevant. It's the comparative result to your control and the proportion of benefit that provides.
Right. Right. Maybe just on the topic, like you said, it is coming up very soon. In terms of what we can expect from a disclosure perspective for the top-line results, do you think it's mostly going to be focused around median PFS, hazard ratio, and then saving some of the other analyses for a medical meeting per se?
Yes. No, that's exactly what we expect to do.
Okay. I do want to spend some time just because they've garnered a lot of attention recently on next-gen SERDs and CDK inhibitors in development. What are your thoughts on the potential impact of these agents on the space?
I think the data has been pretty clear. I mean, I think there have been four or five now that have reported data. Several have not shown any activity in either ESR1 mutant or wild type. The ones that have shown activity have only shown activity in patients that have an ESR1 mutation. The first one that was approved, elacestrant, reported an incremental benefit relative to fulvestrant in ESR1 mutant patients of around 1.9 months. Hazard ratio was 0.55. Imlunestrant, for instance, in that same population only reported a hazard ratio of 0.72. VERITAC did not provide specific guidance, so I cannot speculate there. They enrolled kind of a similar population. They excluded patients who were endocrine resistant. You will need to focus on the hazard ratio there. I think bottom line is those drugs most likely will primarily become what is used in the third line.
If our data is the way we hope it is, we would expect to establish, hopefully, a benchmark for second-line patients. These SERDs for patients who have an ESR1 mutation would likely be used there. They're getting combined with other drugs. Some of the data that's been presented today is hard to interpret, so it's unclear yet exactly what would get approved with those drugs. I do not want to speculate on that. I think, again, our underlying hypothesis in this setting is that the standard of care regimen will be the regimen that addresses the underlying biological drivers of the disease most effectively. In HR-positive breast cancer, we have three cooperative pathways: the estrogen receptor pathway, CDK4/6, cyclin D1, and the PAM pathway.
We think ultimately the regimen that will establish standard of care will be the one that can effectively inhibit all three of those pathways. I think that suggests that a doublet or a monotherapy will have a difficult time offering comparable efficacy because there will be an untreated disease mechanism, the PAM pathway, that will potentially limit its efficacy. As a result, those doublets or those monotherapies would most likely then be used as a subsequent line of therapy, third line. We'll see. I mean, obviously, it all hinges on our data. That's our hypothesis and kind of how we see things shaking out if our hypothesis is proven correct.
Sure. Sure. You did mention that with SERDs, there's been mainly activity restricted to ESR1 mutations. I know it's different mechanisms of action, but is there any plans or is there a sub-analysis for ESR1 status in the VIKTORIA-1 study? Have you had any data from the phase one to suggest whether there's different activity levels?
Right. We had some limited data in the early phase. It was small sample size. We haven't reported it, but I can say there was nothing about it that suggested any differences in that. For instance, if you look at fulvestrant, just one data point, no difference in outcomes in patients who have or don't have ESR1 mutations. I think it's unlikely we would expect to see different results.
Most importantly, because to the extent that you maybe are not inhibiting the estrogen receptor pathway effectively if patients have an ESR1 mutation, most likely what's happening is these tumor cells are becoming more reliant on these other pathways, CDK4/6 or PAM. If you're essentially shutting off those escape routes, you may limit the negative effect that a sub-optimized inhibition would create because you're essentially maybe addressing the resistance mechanism that, let's say, fulvestrant doesn't address as effectively as an oral SERD. That's a TBD.
Okay. Yeah. I think that makes sense. One, I guess, unique feature of gedatolisib is an IV formulation versus a lot of the other PI3K inhibitors are oral. Based on your market research so far, do you think physicians will have a preference of IV versus oral? What does your data suggest so far?
Sure. I think, again, it's always important to put the route of administration in its proper context. Oncologists who are selecting therapies for their patients are focused on three criteria, and one of which is by far the most important, which is efficacy. They're treating patients who have fatal illness. They're trying to prolong their lives and delay the progression of their disease as long as possible. Guidelines, as well as just treatment paradigms, are really focused around giving patients the most efficacious therapy that they can tolerate. That's the second criteria. How well can these patients tolerate a drug? All things being equal, if you've got two drugs with similar efficacy, the one that's more tolerable will win. That's what we're seeing in the mutant space with capivasertib versus alpelisib.
If you go further down that list, if you've got two drugs, comparable efficacy, comparable tolerability, route of administration, which one's more convenient, can become the tiebreaker. Absent that, we just don't think the route of administration is going to be a big factor for most patients or physicians because of what I just said, unless the patient has some logistical challenges in being able to come to the office. We think that'll be, A, addressable with different techniques for getting drug to patients, but B, for the most part, these patients are close enough to a facility to get administered. There are some other factors that are relevant as well. For instance, the largest drugs, the most important drugs in breast cancer are all infused drugs, Herceptin, Perjeta, new drug that's been launched recently, Enhertu , as well as Pembro. Secondly, there's an infrastructure.
These doctors are used to prescribing these, and obviously, chemo is used in later-line settings that's IV administered. IV therapies are a medical benefit. The reimbursement process for them is much more streamlined. Oral therapies fall into the pharmacy benefit and can have a lot of pre-approvals that just make access to the drug more difficult and more problematic. Secondly, again, oncologists can recover costs treating patients with infused therapies that they can't recover with oral therapies. Treating them, infusing is an expense they can recover. General care management process is easier. Another factor that doctors are very sensitive to is exposing their patients to significant out-of-pocket costs. Most patients, they're average Americans. They can't afford big out-of-pocket. Medical benefit really has much, much more limited out-of-pocket exposure than pharmacy benefits.
We actually think it'll be an advantage for us net-net because of the factors I just mentioned. Ultimately, what's going to really make the difference or really drive the decision will be efficacy. We hope we have a significant advantage there.
Right. I do want to make sure we spend a few minutes on the PIK3CA mutant population because there is a readout expected second half of this year. What do you think a win looks like in that population?
Again, similar to the wild type, if we can show an incremental benefit relative to our control of three months or more, that'll be a big win. Again, capivasertib showed a three-month benefit relative to fulvestrant, but really, that wasn't the standard of care in that setting. It was alpelisib. And they didn't demonstrate, I mean, it was just untested, but you can compare the trials and say, well, clearly, it doesn't seem like it was any better, but again, had a better safety profile.
In our case, we think showing an incremental benefit is not unreasonable for us to expect. Also, our data suggests we will be well tolerated. The general level of discontinuation rate that we've reported so far is less than has been reported for a drug like capivasertib or certainly alpelisib. We think we have a couple of potential levers that'll be in our favor. Baseline three months will get us over the hump. And then we have the benefit as well of a favorable safety profile. It'll be even better.
Yeah. Yeah. Speaking of the safety profile, I know Getta's rates of hyperglycemia and discontinuation are favorable. There was some stomatitis, I believe, seen in the phase I study. You mentioned how you are mitigating that.
Correct. Two things. In the phase 1b , what was, I guess, we thought reassuring was that when patients were treated for stomatitis with a dexamethasone mouth rinse, for most patients, stomatitis reversed, which is why we were able to have such good, we interpreted as very good, low discontinuation rates. That is one factor that even with the rates of stomatitis we had in phase one B, it did not impact the patient's ability to stay on the treatment. Nonetheless, a study had found with everolimus, which induces stomatitis, but a more severe stomatitis that is not as responsive to post-manifestation treatment. They did a study, though, because it was impacting their ability to get used, where they provided dexamethasone as a prophylaxis. Patients would use it prior to using the drug and use it for the first two months of treatment.
That significantly reduced the incidence of stomatitis and severity of cases that were reported. We are mandating that patients for the first two months of treatment, first two cycles, use a dexamethasone mouth rinse. As a result, based on at least the data that was reported for everolimus in their study, called the SWISH study, we would expect to see lower rates, potentially substantially lower rates of stomatitis than were reported in the phase 1b study. Regardless, we think because of how well patients respond to dexamethasone even after it has manifested, we think it is one of those adverse reactions that is very well managed and has ultimately minimal impact on patients' ability to stay on the drug.
You're also evaluating gedatolisib in frontline setting breast cancer. Can you just talk about where that study is currently?
Sure. We have selected our sites. We have begun activating those, and we expect to enroll the first patient this quarter, second quarter. This is a study that is focused on patients who are considered to be endocrine therapy resistant, and they have much worse prognosis. These are patients who had early breast cancer, and while they were on their adjuvant endocrine therapy, typically letrozole or tamoxifen, the disease progressed either while they are on that therapy or shortly thereafter within 12 months. It is not a good prognosis for those patients. They do not respond that well to the current standard of care, about seven months based on some data that was reported recently. We think big unmet need. There is evidence because the drug, an alpha inhibitor, was approved to treat this patient population. We view that as kind of very, very validating to our hypothesis.
We think we'll have a number of advantages relative to that drug. Nonetheless, we think we have the opportunity to solve a big unmet need. We've got roughly 200 sites identified, selected. That'll be global, similar to VIKTORIA-1. All of the VIKTORIA-1 sites that we wanted to participate in VIKTORIA-2 are participating. That's gratifying to us that these sites worked with gedatolisib, and based on that experience, wanted to continue to help us develop it. We are doing a safety plan. I guess we're running out of time. Just one other fact. In that study, we're allowing investigator choice of CDK. We'll actually be allowing investigators to use either ribociclib or palbociclib, which we think has been viewed favorably by investigators.
Great. Like you mentioned, we are getting close to time. Hopefully, you could just run a couple of minutes over since we had a late start. You do also have a prostate cancer study ongoing with data coming soon. What are you hoping to see from this initial readout?
The primary endpoint, we're testing gedatolisib combined with darolutamide, which is an AR inhibitor. A single-arm study was testing two doses. We're at the dose finding stage in this program. We have two doses, 120 milligram and 180 milligram dosed three weeks on, one week off. Our primary endpoint is landmark PFS at six months. We're comparing that to historical control, where in this setting, patients who are getting a switch of androgen receptor therapy from what they received in the frontline setting, they get roughly five, five and a half months. We'll be comparing six-month rates for that patient population, for those studies to what we see and do a statistical analysis to see whether we see a meaningful difference. That would be the data that we'd like to report top line sometime towards the end of this quarter.
Okay. Maybe one final one for me, just especially important in the current market conditions. Can you remind everyone, companies' financial position, runway, and then anything that was not covered in this conversation? I think we got that.
Sure. We had $235 million at the end of Q4, and we expect that to allow us to fund our development programs through 2026. If our data is positive, we would gain access to an incremental $30 million from our debt facility. We have some warrants that'll expire after our data comes out, they're cash warrants that we would expect to be exercised. That would bring in, if they're exercised, an incremental $40 million. Very soon after we have data, we would expect to have access to an incremental $70 million, which is good. In this capital environment, we're mindful of valuation, and we want to be capital efficient in how we raise subsequent capital. If data is favorable, it's not unusual for companies to raise money in conjunction with that data. We certainly will be considering that as well.
Great. Thank you for the time, Brian. It is going to be an exciting next few months for Celcuity.
Yes. Great. Thank you for having me.