Celcuity Inc. (CELC) Earnings Call Transcript & Summary

Thanks, everyone, for continuing to join us here at the Guggenheim Healthcare Conference. My name is Brad Canino. Very happy to be sharing the stage with Brian Sullivan, CEO of Celcuity. Brian, thank you so much for joining us.

Good to see you. Thank you.

Transformational last couple of quarters for Celcuity with positive Phase III data in breast cancer. You just announced that you had the NDA accepted with a PDUFA date. So I guess just overview for people in the audience and listening in the time lines for bringing GEDA to market in the PIK3CA wild-type population in breast cancer and then expanding its opportunities beyond that.

Sure. So with the PDUFA date set for July 17, later this year, we would expect to -- the decision is positive to launch the drug soon after that approval is received. And in the meantime, we expect to receive data for the mutant cohort of our VIKTORIA-1 study sometime either later this quarter or sometime in Q2. And so going into the launch, we'll have a full data set for all the patients, PIK3CA wild-type and PIK3CA mutant available to physicians as they evaluate GEDA for the first time.

Okay. What is your expectation for review time lines with the RTOR program and the potential for that to come in a bit earlier than the July date?

Sure. So we looked at all the RTOR approvals that have taken place over the past few years since this program was established. And we looked at those reviews that were very similar to ours, first-time drugs, an NDA, priority review and a full review approach. And of the drugs that fell into that category, which is our category, for the most part, I think everyone was approved pretty much at the same time as their PDUFA date. To the extent that RTOR does lead to an acceleration of an approval decision, it appears just based on our review of the data that it is isolated to those drugs that are filing a supplemental NDA. Essentially, they've already been reviewed by the agency, comfortable with the data, and it's a much more limited data set to review. And so our expectation is that the most likely timing for an approval decision would be the PDUFA date.

Okay. And then if you have to be ready to launch the drug in 5 months from now, what commercial infrastructure has already been built? And what do you still need to build up in the interim between then?

Sure. So we brought on our Chief Commercial Officer, Q1 '24 and began laying out the plans to essentially prepare for launch with a midyear '26 goal in mind or '26 time line in mind. And so in '24, we built out the initial senior leadership of the commercial organization. We also identified all the infrastructure and other effects that -- or other organizations within our company that would be affected. And then '25, we further fleshed out the commercial organization and largely completed hiring of the individuals who are in the marketing, customer commercial operations, market access area as well as medical affairs. The only group really left to hire are our field sales reps. We do have the sales management VP and their sales managers in place. At the same time, we've recognized and part of what happens when you transition from a preclinical to a commercial stage company or from a clinical to a commercial stage company is that it affects every department in your company. And so we've needed to install and implement systems and processes and add people. to the IT, safety, HR, other administrative functions to ensure that we can effectively operate as a commercial company.

Okay. Now you've been to in the last quarter, multiple medical meetings showing your data, meeting physicians there, key opinion leaders. How would you describe the way the GEDA data have evolved the understanding of the PAM pathway and the way to inhibit it that's different from the available options?

Well, I think we should go back to 20 years ago when the pathways role was first discovered as a cancer driver. And 20 years ago, this led almost every major pharmaceutical company to develop pan-PI3K/ mTOR inhibitors because the biological imperative required that. You have 4 PI3K isoforms, Class I isoforms, mTORC1 and 2. And they recognize that these components of this pathway serve as redundancy mechanism. So this pathway can continue to function and perform its metabolic role regulating glucose uptake even if one of these components is inhibited. Unfortunately, those drugs were too toxic. They never made it out of the clinic and the focus deviated or shifted towards developing drugs that only hit single components. Unfortunately, it doesn't address the activity of this pathway. And certainly, the results to date have shown that you will not get effect in patients who lack PIK3CA mutations. And so the -- I think surprise to docs, and it's not their fault, is that the history of development in this industry wasn't on their radar and the imperative of comprehensively inhibiting it wasn't viewed as relevant, i.e., C mutation hit mutation was an effect -- approach that had been considered to be the only practical one to pursue. And as we've now had an opportunity with our MSLs who we've deployed as well as some of the other work that we're doing to educate clinicians and physicians on the role this pathway plays as a key metabolic regulator. Just go back to the discoveries 100 years ago with tumor cells and as we started to understand kind of how unique they were relative to healthy cells, the Warburg effect, tumor cells consume 100x more glucose than normal cells. a sense that's their energy source. The PAM pathway regulates that energy source. So if you inhibit that, you're essentially blowing up a key power plant within the tumor cells. And so the mutation isn't necessarily the most relevant feature of the pathway. The pathway is what's relevant, but controlling it requires this broad inhibition. And so I think as we've explained that, it's been very, very illuminating. And I think people appreciate how important comprehensive inhibition of this pathway is.

And as you've had those conversations and more broadly with just physicians that you've gone out and started to talk about it, how do the clinicians frame back to you how they see the GEDA efficacy and safety profile comparing to their available options in second line?

Sure. Well, I think the data was -- as we viewed it, is similar to how they viewed it. It's unprecedented. We reported a hazard ratio of 0.24, which translates to a 76% reduction of risk of progression or death. And that level of benefit had never been seen before compared to endocrine therapy. The incremental improvement in PFS or multiple relative to endocrine therapy of nearly fivefold was unprecedented as well. And so I think if you stack up other therapeutic options to those results, it's hard not to view GEDA as potentially the best alternative for their patients. And so the reaction that we've received to date from most doctors has been very, very favorable. I think some doctors will want to try it themselves. It's expected. But the doctors who have worked with the drug, investigators, are unbelievably optimistic about the role this drug can play. And I think a lot of perspectives that people have who haven't used the drug, they're always formed by their prior experience with other drugs. That's just reality. And so that's why you have a sales force. That's why you have MSLs, you educate folks and get them to understand better not only the efficacy profile, but also the tolerability profile, which we think is a huge feature and a unique characteristic of the drug.

And what do these clinicians tell you about their ability to uptake a triplet regimen, which does include 3 visits a month for a week for an IV and then uptake it at a high volume in their practice?

Well, it's interesting that this question comes up because if you really dig into the oncology space, you'd find that the largest drugs are all infused drugs, whether it's pembrolizumab, the poster child of cancer drugs. And then if you look at breast cancer, in particular, you'd see that Herceptin, Perjeta, Trodelvy and HER2 are all multibillion-dollar drugs. And so they've essentially built their practices around treating patients who have -- or treating patients with drugs that are infused. And these drugs create a favorable economic outcome for their practices. So they've appropriately built out their capabilities and infrastructure and are certainly not averse to having more patients come to the clinic. One of the other benefits that accrues to patients who are on infused drugs is that the doctors know and the patients are getting the therapy. One of the big challenges in treating patients, particularly in later line settings is that you may not have the compliance that you'd like or certainly that the patients should have with taking their medicines. So the doctors know their patients are receiving the therapy, and that's obviously critically important to getting treatment benefit.

Okay. And at San Antonio, you presented a really thorough characterization of the stomatitis side effect. Can you talk about the patient experience on the drug and how patients are able to stay on the drug long term even with that side effect?

Sure. So a couple of things about stomatitis. I mean it certainly manifests a high proportion of patients. But a couple of interesting observations. First, if patients get stomatitis with our drug, it occurs in the first couple of weeks of treatment, first 2, in effect, infusions. The incidence after that is almost nominal. And secondly, it tends to resolve within 2 weeks to a lower grade. And so that by the time end of the second cycle, very few patients will have Grade 3 stomatitis. The other aspect of stomatitis translates back to the general sense of well-being that we found patients experienced and reported themselves when they were on gedatolisib. We had an extensive quality of life endpoints to evaluate patients' view of the drug and their experience on it. And I think one of the most important outputs of those or rather the most important endpoint was one that measured the sense of well-being. Essentially, there's a 5 score questionnaire, very specific that asks patients to assess how they're feeling relative to where -- today and you compare it against how they felt before they were taken into the study. And we found no degradation of" "their sense of well-being" from the baseline uptake versus the eighth cycle. And so then the question is, well, why is it that patients are tolerating this drug so well even if they do have stomatitis. And I think this gets back to the PK profile of GEDA. GEDA is unbelievably potent, 12 nanomolar, a fraction, 300-fold less drug can inhibit and block this pathway. And what that means is that you can only dose it 3 times a month, and you can be at an IC80 level concentration of drug throughout that dosing window, but below the IC50 level, it would affect healthy cells. So essentially, we're able to have the drug concentration for 25 days out of 28 in this window. And as most of you know, if you're taking a daily cancer drug, you're hit every day with a Cmax concentration of the drug. That Cmax concentration is what tends to essentially cause or induce adverse events and also create a sense of treatment burden. And anecdotally, we heard from a number of physicians who commented on the fact that patients didn't feel like they were on a cancer drug. And so we think as physicians use the drug and they start to see how well their patients tolerate it, that will become an incredibly important component of the value that physicians will see in the drug.

Okay. And now in the PIK3CA wild-type patients, do you think you will be reserved for patients with an ESR1 wild-type status? Or could GEDA be used over oral SERD mono or combos in the ESR1 mutant patient populations as well?

Well, I think our data compares favorably to those regimens. And I think if you're making decisions on the basis of the data and outcomes, then you'll select GEDA. And additionally, if you're looking at tolerability, for instance, the regimen that's, I think, under review by the FDA, an oral SERD with everolimus, I think you'd also select GEDA independent of this ESR1 status. Obviously, the more people in the market, you're going to have just a more crowded space. But we think over time, as we do our job educating physicians and then using this drug and seeing how their patients respond to it, we think that it will sort out to the case where GEDA is viewed as the second-line alternative that can be used independent of ESR1 or PIK3CA status or independent of HbAC1 levels for their patients. And that's going to be very attractive, particularly in the community setting, where the complexity that can occur when you essentially are trying to manage this 4-box equation of ESR1 mutant versus and PIK3CA mutant, yada yada, makes it very hard for them to manage their practice. And we think we'll allow them to hit the simple button and give their patients, more importantly, the best option irrespective of those other factors.

Okay. And how do you weigh a full go-it-alone strategy with potential strategic options to commercialize GEDA?

Sure. Well, 2 things. It's -- we're very confident about our ability to execute the commercial launch of this drug. And we've essentially 100% on our marks for accomplishing the infrastructure build organizational build to do that. At the same time, you're building a business, starting a business as I've done a couple of times, the only thing you can really control is what you can control. And so what we can control is launching this drug and doing it very effectively. What we can't control are potential external events or external factors. And so if you take care of what you can control, other things can happen. But if you are waiting for external events to occur, I think you can run into trouble. And we think we will provide the appropriate focus and effort that will play big dividends in being able to maximize the penetration of this drug.

Okay. Now let's flip to the mutant Phase III readout that we have coming up imminently late 1Q, 2Q. What got you to that time point of the catalyst reading out then in terms of enrollment and how events have come in versus expectations?

Well, there are always kind of 2 factors that were -- many factors, but maybe 2 or 3 factors that can really drive a delay in being able to report data. One is enrollment. If the enrollment took longer, obviously, it takes longer for the events to accrue. That wasn't the case with the mutant population. We pretty much hit to the week our enrollment target. So the enrollment was very consistent and wasn't a variable. The other factor is obviously how long patients are on either the control or the study drug. And so we monitor pretty much on a quarterly snapshot basis using the calendar quarter, the event rates and then use that and project forward to what we project to be the -- or what's required to be the event threshold -- target threshold. And that slowed down in Q3, just is what it is, and you then roll that forward and that pops out a date when you think the event threshold will be met and then correspondingly, the database locked and top line results available. Then the question is, is it due to the control of the study arm. We are blinded. We don't know. But there have been some recent results out for the control that we're using. We're using alpelisib/fulvestrant as a control in the study. A Phase III study was reported out at San Antonio just in December called EPIK-5, reported, I think, 7.4 months, 7.3 months median PFS for alpelpsib and fulvestrant, which is consistent with the assumptions we used going into the study because of the BYLieve study had reported almost exactly the same results. So there seems to be a fairly consistent result for alpelisib when treated in a population similar to ours. And that suggests to us that we're unlikely to see us get surprised on that end. But again, until we report the data, we don't know.

Okay. And then you have Phase I data that suggests 14 and change median PFS up to 19 and change. As you think about this Phase III, though, what is the PFS bar for success at a median? And maybe you can delineate that between statistical significance and commercial relevance.

Well, there's always what we'd like to have and what we need to have, right? So certainly, we'd love to recapitulate those numbers from the Phase Ib. But what we need to have, and really you alluded to this is beat 2 benchmarks. One is the statistical benchmark, right? We have to beat alpelisib. And based on the math, essentially a 3-month delta relative to alpelisib roughly 10 months or so for median PFS with our study arm would be statistically significant. And so first things first, you want to have a positive study. Now as it turns out, a positive study would also be clinically meaningful because even though alpelisibs are controlled, they're no longer relevant clinically. They've been superseded as the go-to standard of care by an AKT inhibitor called capivasertib, TruCap. And that drug reported about 5.5 months median PFS in the same population we're treating, patients who had prior CDK. And so even with a 10-month median PFS, we'd be essentially offering almost a double relative to what is currently available for these patients. Now certainly, more is better. We're not trying to suggest that's what we'd like. But it does say, given the results we had in our early phase studies, we've got a pretty good margin for error, which in turn, we think corresponds to a high probability of success.

Yes. We just saw TruCap is now $600 million annualized in the U.S. So maybe let's talk a little bit about the commercial opportunity for GEDA because that's just in the mutant population for them. As you think about how you size the opportunity with the profile of GEDA, what do you think that is in just the U.S. alone? And how do you think about what a reasonable penetration is that GEDA could achieve into that?

So TruCap just provides somewhat of a benchmark. It's got some limitations as a drug because of its tolerability profile and also relatively short duration of treatment. But if you normalize that for the whole population, so 40% of PIK3CA mutations, it translates to roughly $1.7 billion. It's actually roughly $700 million now run rate based on the last quarter. So roughly $1.7 billion in the market as a whole. We think this overall market has a potential of over $6 billion. This is a second-line wild-type mutation. And that represents -- or let's assume roughly 37,000 women are eligible to receive treatment. Duration of treatment is, call it, 10 months just on average, just to have a number that our pricing is comparable to what's currently being achieved with, like, say, a drug like TruCap. And so even -- I think the way to think about that is not so much focus on what we'd like, what our goal is, which is high, is to say, well, what's the value of this drug if we're even just at 30% penetration, which is -- would translate to roughly more than a couple of billion dollars in just a second-line indication, not taking into account what we think is equal opportunities or larger opportunities in the first-line setting. And so we think it's highly probable, I mean, based on the math I just shared that we can build a multibillion-dollar drug in this setting, second-line setting. And that if we have success in rolling out and achieving positive results in the 2 first-line populations, endocrine-sensitive patients, endocrine-resistant patients, we could build a drug, $5 billion to $10 billion drug in just breast cancer.

Okay. So let's talk about that a little bit, how you're bringing GEDA it to the front line. Maybe explain the key features and status of the first initial frontline trial you've got ongoing.

So we're initially focused on the treatment-naive population, women who are considered to be endocrine resistant. These are women who are on their adjuvant hormonal therapy for early breast cancer and progressed or they progress within 12 months after finishing up that course. So they have a rough prognosis. With standard of care drugs, let's say, CDK4/6 plus fulvestrant, they're only getting about 7 months median PFS. And so we're enrolling in that population now. We're doing a safety run-in. The study is designed to give physicians the option of ribociclib and palbo as their CDK combination partner for both the study and control arms. And to -- essentially before we could initiate Phase III, we needed to do a safety assessment with ribo. That will be wrapping up soon. And then once that's done, we would expect to begin enrolling in the Phase III portion of the study soon after that.

And how would you describe the probability of success for the ongoing endocrine-resistant frontline trial and why investors should credit it today?

Sure. Well, I think the results that we reported in VIKTORIA-1 are -- really were outstanding. You saw the data even in patients who had prior CDK reported very, very significant incremental benefit with just the doublet, fulvestrant and GEDA. And then we were able to resensitize these patients to CDK4/6 treatment. I mean it was interesting that the patients in the wild type who had palbo -- prior palbo had 16 months median PFS with retreatment with palbo and GEDA and fulvestrant. So we think that suggests that the combination of these 3 inhibitors essentially are addressing the important -- the disease drivers of women with this type of cancer. And that if you do that with a drug that comprehensively inhibits this PAM pathway, then you can have a significant outcome irregardless of your stage of treatment. And in effect, the harder hurdle to overcome is demonstrating clinical benefit in patients who've already received 2 components of the triplet, the hormonal therapy and prior CDK. So we're optimistic. And also, I just should point out that we did have data in treatment-naive patients who are endocrine sensitive. And these are patients who have a much better prognosis. They will get 25 months median PFS with a CDK4/6 and letrozole, which is an AI inhibitor. In our study, which is a single-arm study, but 41 patients were enrolled. We reported 48 months median PFS, which is obviously a very, very promising result. And so what we think that demonstrated is that irregardless of whether you've had prior treatment with hormonal therapy, this pathway plays a role and is important and really one of the 3 components -- 3 pathways driving the disease.

Okay. Maybe we'll just close it out because still running a lot of clinical trials, building out commercial, what is the cash runway and access to capital as you see it because you do have some debt facilities as well.

Sure. So we had $450 million of cash at the end of Q3. We also expanded our term loan facility last year so that we now have access to up to $500 million of cash off that term loan. We've only pulled down $125 million so far. We're not going to lever ourselves up ridiculously, but it does give us flexibility. And certainly, with this market cap and hopefully, positive data coming up, we think we'd have some options to augment our balance sheet further.

Okay. Great. Well, Brian, thank you so much for joining us. Thanks, everyone, for listening in. Exciting year ahead.

Thank you.