Welcome to Celcuity's Full Year 2022 financial results conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Robert Uhl, with ICR Westwicke. Thank you, Robert. You may begin.
Thank you, operator, and good afternoon to everyone on the call. Thank you for joining us to review Celcuity's fourth quarter and full year 2022 financial results and business update. Earlier today, Celcuity released financial results for the fourth quarter and full year ending December 31, 2022. The press release can be found on the investors section of the 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 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 press 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. With that, I would now like to turn the call over to Brian Sullivan, CEO of Celcuity. Please go ahead.
Thank you, Robert. Good afternoon, everyone. We had an eventful and productive 2022. Our primary goal for the year was to begin enrollment of our phase III VIKTORIA-1 clinical trial for our lead candidate, gedatolisib. This trial is enrolling patients with advanced HR-positive, HER2-negative breast cancer, whose disease progressed after treatment with a CDK4/6 inhibitor. We began 2022 working with the U.S. FDA and the European Medicines Agency to finalize feedback on our clinical trial protocol. Once we received this feedback, we finalized our protocol and then completed selection of over 200 clinical trial sites across five continents to participate in the study. These sites include some of the world's leading breast cancer institutions. After formally activating the study in the third quarter, we were very pleased to dose our first patient this past December.
The dosing of the first patient in the VIKTORIA-1 clinical trial triggered the closing of a $100 million private placement and drawdown of a $20 million term loan tranche in December. Proceeds from the private placement, combined with the debt facility and the company's current cash equivalents, and marketable securities, are expected to be sufficient to fund Celcuity's current operating plan through 2025. We are very encouraged by the activity at our VIKTORIA-1 trial sites. We remain on track with our prior guidance and continue to expect data for the PIK3CA non-mutated patient subgroup to be available in the second half of 2024 and data for the PIK3CA mutated patient subgroup to be available in the first half of 2025. The scientific rationale for launching the VIKTORIA-1 study was predicated on two key factors.
First, there's a significant unmet need for better second-line therapeutic options for HR-positive, HER2-negative breast cancer patients who received prior CDK4/6 inhibitors. Current therapeutic options offer only modest progression-free survival benefit. Second, we reported very promising results from our phase IB study that evaluated gedatolisib plus palbociclib combined with either letrozole or fulvestrant. For patients lacking PIK3CA mutations, published data for approved second-line therapies indicate they only offer median PFS of two to four months. For patients who have PIK3CA mutations, the published data for median PFS of approved therapies is approximately seven months. The clinical efficacy data we initially reported in 2021 from our phase IB study compares very favorably to these published results.
We've since updated our data to reflect 13 months of additional follow-up. We presented this data in a spotlight poster presentation at the 2022 San Antonio Breast Cancer Symposium in December. Updates included efficacy results broken out for patient subgroups according to PIK3CA mutation status in each of the four expansion arms. For the patients in arm D of the phase IB study, those who received the phase III dosing schedule of gedatolisib, the ORR, or objective response rate, was 60% in PIK3CA wild type patients. The percentage of patients who were progression free at 12 months was 49%. These results compare very favorably to published data for fulvestrant, the control drug for PIK3CA wild type patients in our VIKTORIA-1 study.
In a recent randomized study, fulvestrant reported an objective response rate of 6% and a 12-month PFS rate of 12% for fulvestrant. For the arm D patients who had PIK3CA mutations, the objective response rate was 73%. A 12-month PFS rate was 60%. Again, these results compare very favorably to published results for the alpelisib and fulvestrant regimen to control for PIK3CA mutated patients in the VIKTORIA-1 study. In two clinical trials, the objective response rate for alpelisib plus fulvestrant averaged 20% and the 12-month PFS rate averaged 25%. The comparable objective response rates and 12-month PFS rate in the PIK3CA wild-type and mutated patient subgroups is driven by, we believe, two key factors. First, the PI3K/mTOR pathway is a driver in HR-positive breast cancer, regardless of whether the patient's tumor has an activating PIK3CA mutation or not.
Second, inhibiting the four class one PIK3CA mutations or isoforms and the two mTOR complexes is required to most efficaciously address PI3K/mTOR pathway activity. This is the optimal approach biologically because it avoids the cross-activation of uninhibited subunits and resulting drug resistance that can occur with PI3K isoform-specific or mTOR-specific inhibitors. Completely blockading the pathway also enhances the potential to induce synergistic inhibition with other targeted therapies such as CDK4/6 inhibitors. Gedatolisib's differentiated mechanism of action as an equipotent pan-PI3K/mTOR inhibitor thus uniquely suits, we believe, to address the need for more effective second-line breast cancer therapies. We believe this data and the unmet need we are seeking to address played a key role in the FDA's decision to grant Breakthrough Therapy designation in July last year to gedatolisib in combination with palbociclib and fulvestrant for the treatment of HR-positive, HER2-negative advanced breast cancer.
We were also very encouraged by the updated efficacy results for the 41 patients in our phase Ib study who had not received prior treatment for advanced disease. These patients received gedatolisib combined with palbociclib and letrozole as first-line treatment. In the combined group of treatment-naive patients from escalation arm A and expansion arm A, median PFS was 42.3 months, and the objective response rate was 79%. These results compare very favorably to the median PFS of 24.5 months and 55% objective response rate reported in the PALOMA-3 study for palbociclib plus letrozole. Of note is that the median PFS in expansion arm A patients alone was not reached as of the June 22 data cutoff.
We will present updated efficacy data for expansion arm A as well as for the combined data for the two arms with treatment-naive patients at the ESMO Breast Cancer Congress in May. These results provide another demonstration of the intrinsic role the PI3K/mTOR pathway plays as a disease driver in advanced HR-positive, HER2-negative breast cancer. The data also highlight the potential opportunity to develop gedatolisib as a first-line treatment option. While a randomized first line study evaluating gedatolisib combined with palbociclib plus letrozole is not practical for us to pursue at this time, this promising data certainly warrants evaluation in the future. Another important goal for us in 2022 was to begin evaluating and prioritizing new potential indications for gedatolisib.
This evaluation includes assessment of previous trials for other PI3K and mTOR inhibitors, review of other pathways linked to the PI3K/mTOR pathway, and conduct of non-clinical studies to characterize the activity of gedatolisib and other PI3K/AKT/mTOR inhibitors in different tumor types. A significant body of literature has characterized the crosstalk and reciprocal feedback loops between hormonal pathway signaling and the PI3K/AKT/mTOR signaling cascade in multiple tumor types. This interaction plays an essential role in disease recurrence and progression in prostate and gynecological cancers, in addition to breast cancer. As has been demonstrated in breast cancer, co-targeting the hormonal and PI3K/AKT/mTOR pathways is a promising treatment strategy, but the approach is confounded by the feedback and feed forward loops between PI3K isoforms, AKT and mTOR that cross-activate uninhibited subunits.
This literature review, as well as considerations of the unmet needs in various tumor types, led us to focus our initial non-clinical research studies on prostate and gynecological cancers. We presented the first results from our studies, which focused on prostate cancer in February 2023 at the ASCO Genitourinary Cancers Symposium. We've previously discussed how most PI3K/mTOR inhibitors selectively spare or weakly inhibit one or more key PI3K/mTOR pathway components and how this can enable drug resistance depending on the mutation status of a patient's tumor. In prostate cancer, the PTEN gene is linked to PI3K, and it is frequently mutated. Inhibitors that only target a single PI3K/mTOR component or AKT have demonstrated limited clinical efficacy in PTEN-deficient prostate cancer and no efficacy in PTEN wild-type tumors.
As has been found with breast cancer, this suggests that more comprehensive inhibition of the PI3K/mTOR pathway may be required. We thus posited gedatolisib as a pan-PI3K/mTOR inhibitor would be effective in both PTEN wild-type and PTEN-deficient prostate cancer models. To assess this hypothesis, we evaluated a panel of prostate cancer cell lines with different PTEN status for their sensitivity to gedatolisib and six other inhibitors that target at least one component of the PI3K/AKT/mTOR pathway. The results from these studies were very encouraging and supportive of our hypothesis. Our assessments confirmed that gedatolisib was the only inhibitor that was as potent and efficacious in PTEN wild-type as PTEN-mutated prostate cancer cells. In addition, in every assessment, which included cytotoxicity, potency, cell death, DNA replication, and signaling, gedatolisib exhibited superior activity relative to all of the other PI3K, AKT or mTOR inhibitors evaluated.
Of particular note was the contrast between gedatolisib and the AKT inhibitor capivasertib. Capivasertib has been evaluated in prostate cancer clinical trials, but it has only reported modest efficacy to date in PTEN-mutated tumors and no efficacy in PTEN wild-type tumors. The results from our non-clinical studies with capivasertib are consistent with these clinical results. We found that capivasertib was tenfold less potent in PTEN wild type than PTEN-mutated cancer cells and generally inferior to the pan PI3K drugs and much less active than gedatolisib. We believe these results and the contrast with gedatolisib provide further demonstration of the importance of comprehensively rather than selectively blockading the PI3K/mTOR pathway. To assess gedatolisib in vivo activity in prostate cancer, we evaluated gedatolisib in three different prostate cancer mouse xenograft models.
We first evaluated gedatolisib as a single agent in PTEN wild-type and PTEN-loss xenograft models that were insensitive to the androgen receptor inhibitor enzalutamide. In both models, gedatolisib induced more than 80% tumor growth inhibition, whereas enzalutamide had no activity. We also evaluated a prostate cancer xenograft model that was sensitive to enzalutamide. In this model, gedatolisib induced 80% tumor growth inhibition as a single agent and 116% inhibition when it was combined with enzalutamide. We will present results for our next set of clinical studies at the American Association for Cancer Research annual meeting, which is being held in Orlando, Florida from April 14th through the 19th. These studies evaluated a panel of gynecological cell line models with gedatolisib and several other PI3K/AKT/mTOR inhibitors. An abstract summarizing this data was published last week.
Consistent with our findings in prostate cancer, gedatolisib exhibited superior activity relative to all of the other PI3K, AKT, mTOR inhibitors evaluated. Based on the results from these internal non-clinical studies and on gedatolisib's highly differentiated mechanism of action and PK/PD profile, we think there is a significant opportunity for us to develop gedatolisib in these tumor types. We will provide an update on our clinical development priorities later this year. I would like to shift our discussion to the diagnostic side of our business that centers on CELsignia, Celcuity's third-generation diagnostics platform. As you may recall, the enrollment in the FACT-1 and FACT-2 trials that are evaluating early-stage breast cancer patients selected using our CELsignia HER2 signaling diagnostic were impacted by COVID-19 related delays up through early 2022.
These trials are now enrolling patients with early stage breast cancer whose HER2 pathway is hyperactive as detected with our CELsignia test. Our goal is to provide our CELsignia test as a companion diagnostic so that pharmaceutical companies can expand the number of patients eligible to receive their targeted therapy. We expect to announce interim results from these studies in the second half of 2023. With that, I'll now turn our call over to Vicky Hahne, our CFO, to review our financial results.
Thank you, Brian. Good afternoon, everyone. I'll provide a brief overview of our financial results for the fourth quarter and full year 2022. I invite you to review our 10-K, which will be filed later today for a more detailed discussion. Our fourth quarter net loss was $11.6 million or $0.69 per share, compared to $6.8 million net loss or $0.45 per share for the fourth quarter of 2021. Net loss for the full year 2022 was $40.4 million or $2.64 per share, compared to $29.6 million net loss or $2.21 per share for the same period in 2021.
For purposes of calculating net loss per share, the reported net loss of $2.64 per share included an additional $0.02 loss per share related to approximately 0.3 million deemed dividend resulting from a warrant modification. Because these quarterly and full year 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 31st, 2022. Our non-GAAP adjusted net loss was $10.2 million or $0.60 per share for the fourth quarter of 2022, compared to non-GAAP adjusted net loss of $5.6 million or $0.37 per share for the fourth quarter of 2021.
Non-GAAP adjusted net loss for the full year 2022 was $34.9 million or $2.26 per share, compared to non-GAAP adjusted net loss of $21.4 million or $1.60 per share for the full year 2021. Research and development expenses were $10.6 million for the fourth quarter of 2022, compared to $5.5 million for the fourth quarter of 2021. The increase was primarily the result of activities supporting the initiation of the VIKTORIA-1 pivotal trial. R&D expenses for the full year 2022 were $35.3 million compared to $25.8 million for the prior year. The increase in R&D expenses included a $10 million reduction in gedatolisib licensing related expenses.
This reduction was offset by increases in other R&D expenses, which included employee and consulting expenses, as well as increased expenses for existing clinical trials and for activities supporting the initiation of the VIKTORIA-1 pivotal trial. General and administrative expenses were $1 million for the fourth quarter of 2022, compared to $0.8 million for the same period in 2021. G&A expenses for the full year of 2022 were $4.1 million, compared to $2.6 million for the prior year. The increases for the fourth quarter and full year 2022 over the same period in 2021 were driven primarily by non-cash stock-based compensation. Net cash used in operating activities for the fourth quarter of 2022 was $9.5 million, compared to $6.1 million for the fourth quarter of 2021.
This was a result of non-GAAP adjusted net loss of $10.2 million, offset by working capital changes of approximately $0.7 million. Net cash. Excuse me. Net cash used in operating activities for the full year 2022 was $36 million compared to $20.3 million for the full year 2021. This was a result of non-GAAP adjusted net loss of $34.9 million and working capital changes of approximately $1.3 million, offset by $0.2 million of depreciation expenses. We ended the year with approximately $168.6 million of cash equivalents and short-term investments, compared to cash and cash equivalents of $84.3 million on December 31st, 2021.
The $168.6 million does include the net proceeds of $115.2 million from the funding of the PIPE and the drawdown of the debt facility. I will now hand the call back to Brian.
Thank you, Vicky. Operator, could you please open the call for questions?
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we pull for questions. Thank you. Our first question is from Maury Raycroft with Jefferies. Please proceed with your question.
That's on the progress and thanks for taking my questions. For phase III status, I know it's still early days, but wondering if you could talk more about number of sites activated and in what countries. Are there any comments on site activation or enrollment trends that you can share at this point?
Sure. We have a plan, you know, basically at site level, for each site in each country. We're on track to activating our sites on the schedule that will allow us to, you know, essentially be able to report our primary analysis in second half of 2022 or 2024. So far, really nothing to report other than we're on plan.
Got it. Okay. Wondering too, if you can remind me what the data safety monitoring review plan looks like for the phase III and, will you provide general updates after DSMB reviews?
Generally, no, that is not public information. Igor, maybe you could shed some light on the IDMC we have and their role and the function.
Yeah. Thank you, Brian. As Brian mentioned, a regular update on independent data monitoring committee review is not a standard practice. However, this study includes all of the appropriate steps to monitor data, including independent data monitoring committee that includes experts in oncology and statistics. According to the charter, data will be reviewed starting with the initial patients enrolled in the study on an ongoing basis. The system has been set in place and IDMC work will proceed as per charter.
Got it.
That IDMC operates independently of the company.
Okay. Okay, and one other, specific question I wanted to ask. Just, I see in the phase III as one of the secondary endpoints, you're assessing PFS and OS based on HER2-low status. Just wondering if you can remind me if you looked at HER2-low status in the phase IB, and did that have any impact in the phase IB efficacy results? For the IHC 0 versus 1 and 2, were there any trends observed based on those patients?
We didn't see any differentiation in results based on HER2 status. All the patients were HER2-negative, but, you know, whether it was 0, 1+ or 2+.
Got it. Okay. Thanks for taking my questions.
You're welcome.
Thank you. Our next question is from Alex Nowak with Craig-Hallum. Please proceed with your question.
Okay, great. Good afternoon, everyone. I was hoping the first one just on the staffing up for the clinical trial. Where are you at? Do you think you're at a healthy balance right now? How to think about OpEx spend throughout this year? Does it kinda sit around that $11 million per quarter level, or do we go up a little bit from here?
There's really two components to the expenses. The primary expense for the clinical study is run through our CRO and associated vendors. Those aren't internal individuals. We have an organization, you know, clinical operations organization, regulatory that is essentially overseeing and managing that process. That staff has largely been hired and in place. The CRO expenses are a function of site activation and enrollment, and you will see as enrollment and number of patients, aggregate number of patients who are receiving treatment, will increase over, you know, the next few quarters. Vicky, I don't know if I don't think we've provided...
I think the guidance that you have or what you've indicated in your numbers or what has been reported in other forecasts is consistent with our internal numbers.
Yeah. I would concur with that. Some of the street estimates of analysts who follow us very closely are very reasonable for 2023 as they step up through the quarters.
Okay. All right. That, that makes sense. You know, maybe a bit more on the delay with FACT- 1 and FACT-2. It looks like that they get pushed, I think it was middle of 2023 that pushed the second half. Just what you're seeing there at the clinical trial sites, and then just an update on FACT- 3, FACT-4 and FACT-5 timelines.
Sure. I guess to get a patient enrolled in FACT- 1 and FACT-2 requires a fair amount of screening. You know, 20% of patients who are 20% of HER2-negative patients are eligible for our study, you know, based on the test results, you know, the patients that are hyperactive HER2 signaling. You know, it's somewhat difficult to predict on a month-to-month basis the proportion of patients that qualify for the study as well as just, you know, the screening activity. You know, we had a forecast, and it was a little optimistic relative to what we're seeing currently.
Does that apply to the FACT- 3, FACT-4 and FACT-5 then as well?
Yes. The issues... Not issues, but the challenges in getting patients enrolled in those studies is that we require a research biopsy. You know, unlike, you know, VIKTORIA-1 study, where essentially we're enrolling all comers, you know, there's no requirement for anything other than normal standard of care assessments. In the case of the FACT studies, we require a research biopsy, which may not be standard of care, typically isn't, in order to assess their tumor and determine whether their HER2 pathway status is hyperactive or not. With COVID, that became very, very difficult because patients, you know, essentially were not coming in for non-essential or non-standard of care procedures.
Really, you know, we've been working with our sites is to get them back into that essentially pre-screening mode and scheduling these research biopsies for this patient group.
Okay. All right. Makes sense. Then, you know, you have cash through the readout of VIKTORIA-1, but you also got data which, you know, looks like from the, at least from the preclinical standpoint, that it has applicability into non-breast cancer or prostate cancer and so on. Just how are you level setting or, you know, trying to manage these two? How do you know, on one hand, put your head down, focus on VIKTORIA-1 enrollment with the cash on hand versus maybe spending a little bit more that puts VIKTORIA-1 enrollment readout with the cash on hand at risk, you can go after these other cancers. How are you thinking about that?
Sure. No, that's a great question. When we raised the money last year, we took into account or assumed that we would do a single early phase, you know, phase I to II study in another tumor type. We factored that into our cash projections, so our estimate of cash availability through 2025, it reflects the assumption that we do feel an early phase study in another tumor type. Relative with respect to, you know, obviously keeping our heads down, our goal, we hope to report favorable data in the second half of 2024.
We think if in a similar timeframe, I'm not projecting a timeline, but I'm just simply saying, if we could report, in that ZIP code of time, results in another tumor type, we think that would be very accretive to the value of the business because it would demonstrate if the results were successful, favorable, it would demonstrate that gedatolisib has the potential not only to be, we think, a potentially standard of care second line drug, data suggests we could move upline, or certainly the potential for that in breast cancer as well as in other tumor types. You know, we think that would just highlight the significant value that this drug provides to cancer patients and the resulting value to shareholders.
You know, we think, you know, there's a fairly long lead time to get that type of data going, and we think it's to everybody's advantage if we can, you know, in effect, plant the flag in another tumor type and get a perspective on gedatolisib's activity, which we think if favorable, would be very, very valuable to everybody.
Absolutely. Makes total sense. Thanks for the update.
You're welcome.
Thank you. Our next question is from Boris Peaker with TD Cowen. Please proceed with your question.
Great, thanks. This is Nick on for Boris. Just one for me. What data should we be looking for from the FACT- 1 and FACT- 2 trials that are gonna report in the second half that it has a positive effect? Like what specific endpoints should we be focused on?
The endpoint in those two trials is a pathological complete response rate, which is a measure of whether the tumor has been eliminated in the patient. There's a specific assessment to determine that. We have a statistical plan that defines a benchmark that we need to beat in order to determine that, you know, we have a, you know, potentially significant result that would warrant, you know, continuing the study, but also continuing, you know, towards additional evaluations.
Great. Thank you. That's it for me.
Thank you.
Thank you. Our next question is from Gil Blum with Needham & Company. Please proceed with your question.
Hi, this is Rohit on for Gil. Thanks for taking our questions. Can you just talk about any preliminary discussions you might have had with payers and if you've received any feedback on possible pricing dynamics? Thanks.
We have had discussions with payer consultants to get some perspective on the landscape. You know, we have in our plan to initiate those kind of conversations as we get closer to the end of the year. There are fairly well-established benchmarks for prices that have been established with novel targeted therapies. You know, the CDK4/6 therapies have been on the market and have an established price that's been supported over time. You know, there's novel SERD that was just approved. PI3K drug, alpelisib or Piqray, has been approved and established price points. Our internal assumptions assume...
...or rather internal assumptions, when we derive a peak revenue estimate, assume that our pricing will be at least comparable to, let's say, what, Piqray, is obtaining in the marketplace. You know, we frankly think if our data is favorable, that we will generate a greater clinical benefit for those patients and would certainly warrant, at least an equivalent price.
Thank you.
Thank you. Our next question is from Sway ampakula Ramakanth. Sorry. Please proceed with your question.
Thank you. This is RK from H.C. Wainwright. Good afternoon, Brian.
Hello.
Just a quick question. This is, just trying to think beyond VIKTORIA-1 at this point. Certainly this is a study, you know, where you're combining with the CDK4/6 inhibitor. Are there any thoughts, in terms of combination with other immune checkpoint inhibitors because that's also being floated, as a way to go, in breast cancer?
Immune checkpoint inhibitors to date have been approved in TNBC, you know, triple negative breast cancer. There haven't been successful results in HR-positive hormonally driven breast cancer, as is the case in prostate cancer. It appears, or at least the data to date, suggests that hormonally driven cancers are not responsive to the checkpoint inhibitors. That certainly is a factor that we take into account as we're considering our development plan.
Thank you. Thanks for taking my question.
You're welcome.
There are no further questions at this time. I would like to turn the floor back over to Chief Executive Officer Brian Sullivan for closing comments.
Well, thank you again for participating in our call today and for your ongoing support. We'll be participating in the Needham Healthcare Conference in mid-April. Look forward to meeting with many of you there. Hope you have a great evening.
This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.