Celcuity Inc. Q2 FY2025 Earnings Call

Good afternoon, everyone, and welcome to the Celcuity Second Quarter 2025 Financial Results Webcast and Conference Call. I would now like to hand the conference over to Apoorva Chaloori with ICR Healthcare. Please proceed.

Thank you, operator, and good afternoon to everyone. Thank you for joining us to review Celcuity's Second Quarter 2025 Financial Results and Business Update. Earlier today, Celcuity, Inc. released financial results for the second quarter ended June 30, 2025. The press release can be found on the Investors section of Celcuity's 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. And with that, I would now like to turn the call over to Brian Sullivan, CEO of Celcuity. Please go ahead.

Thank you, Apoorva, and good afternoon, everyone. Thank you for joining our second quarter financial results conference call. The past few months have been eventful for Celcuity. We achieved several significant milestones, and we believe these milestones lay the foundation for us to potentially establish gedatolisib as a new standard of care therapy for patients with HR-positive, HER2-negative advanced breast cancer. The first and most importantly, of course, was the positive top line data we reported from the PIK3CA wild-type cohort of our Phase III VIKTORIA-1 clinical trial. In patients with HR-positive, HER2-negative, PIK3CA wild-type advanced breast cancer, gedatolisib plus fulvestrant and palbociclib or the gedatolisib triplet and gedatolisib plus fulvestrant or the gedatolisib doublet met the study's two primary endpoints by demonstrating statistically significant and clinically meaningful improvement in progression-free survival or PFS versus fulvestrant. The reported hazard ratios and improvements in median PFS are unprecedented in HR-positive, HER2-negative advanced breast cancer. We believe these data validate our hypothesis that the role of the PI3K, AKT, mTOR or PAM pathway as a cancer driver is not solely a function of the presence of a pathway mutation. The implications are profound for patients with HR-positive, HER2-negative advanced breast cancer as we seek to advance gedatolisib as a therapeutic option for patients with or without PIK3CA mutations in both the second-line and first-line settings. The second important milestone achieved was the dosing of the first patient in our Phase III VIKTORIA-2 clinical trial. This trial is evaluating gedatolisib in combination with a CDK4/6 inhibitor and fulvestrant as first-line treatment for patients with HR-positive, HER2-negative advanced breast cancer. The third milestone was the announcement of favorable preliminary top line results from two early-phase clinical trials. One evaluating gedatolisib and darolutamide in men with metastatic castration-resistant prostate cancer, and a second one that evaluated gedatolisib and trastuzumab biosimilar in patients with HER2-positive, PIK3CA-mutated metastatic breast cancer. The fourth milestone was the extension of our patent exclusivity for gedatolisib into 2042 with the issuance of a new dosing regimen patent for gedatolisib. And finally, we raised around $287 million through public offerings of convertible notes, common stock, and prefunded warrants, providing the funding that should allow us to aggressively prepare for and launch gedatolisib should we receive FDA approval next year. I'd like now to turn to the VIKTORIA-1 trial. Last month, we announced top line results from this trial. Median progression-free survival or PFS for the gedatolisib triplet was 9.3 months compared to only 2 months for fulvestrant, representing a 7.3 months incremental improvement in median PFS. The hazard ratio was 0.24, which translates to a 4.2x higher likelihood of survival without disease progression for the gedatolisib triplet than fulvestrant. With the gedatolisib doublet, median PFS was 7.4 months, again compared to only 2 months for fulvestrant, a 5.4-month incremental improvement in median PFS. The hazard ratio was 0.33, which translates to a 3x higher likelihood of survival without disease progression for the gedatolisib doublet than fulvestrant. Now these results established several new milestones in the history of drug development for this patient population. First, the hazard ratios reported for both the gedatolisib triplet and doublet were the most favorable ever reported by any Phase III trial, first line, second line, or third line in this population. Second, the incremental improvements in median PFS for the triplet and doublet, 7.3 and 5.4 months, respectively, were the highest ever reported by any Phase III trial for this patient population receiving at least their second line of therapy for advanced disease. Third, gedatolisib is the first PAM inhibitor to achieve positive Phase III data results in patients with PIK3CA wild-type tumors whose disease progressed on or after treatment with a CDK4/6 inhibitor. For comparison purposes, it's important to note that several Phase III studies in this patient population have reported data recently. In these studies, the incremental improvement in median PFS ranged from 1.7 to 3.9 months, and the hazard ratios ranged from 0.55 to 0.73. Both gedatolisib regimens exhibited a favorable safety profile, including lower rates of hypoglycemia and stomatitis, and the rate of discontinuation of all treatment due to a treatment-related adverse event was lower than reported in a Phase Ib study in this patient population. In light of the favorable safety profile, more favorable hazard ratios, and longer incremental PFS with the gedatolisib regimens than the other currently available or investigational agents, we believe both the gedatolisib triplet and doublet each have the potential to establish a new standard of care for these patients. We're on track to submit a new drug application to the FDA in the fourth quarter of 2025 for gedatolisib based on data from the PIK3CA wild-type cohort, and we're looking forward to presenting the full data set later this year at an upcoming medical conference. Additionally, we expect to release top line data for the VIKTORIA-1 PIK3CA mutation cohort by the end of 2025. Moving on, I want to share just a quick overview of the market landscape we see for gedatolisib and how we're gearing up for a potential launch should we receive FDA approval. We think the market looks very promising for gedatolisib. We estimate there are 34,000 patients moving to second-line treatment after progressing on a CDK4/6 inhibitor, and roughly 60% of them are PIK3CA wild type. That's a very large opportunity. There's also a significant need for more efficacious therapies than those currently available. Currently approved therapies only offer 2 to 4 months of median PFS. With gedatolisib's unique mechanism of action and corresponding clinical benefit, it's well positioned to address critical needs in the second-line space. This unmet need has been verified in our market research, which shows that oncologists are eager for options that are more effective and have a safety profile they can manage. As we've discussed on prior calls, efficacy and safety are the two primary criteria oncologists use to select therapies for their patients. This is also consistent with the criteria used by treatment guidelines, such as NCCN, to determine recommendation categories for drug treatments. Additionally, as an IV-administered therapy, we believe gedatolisib will be very well received in the community practice setting where over 80% of patients are treated. Gedatolisib will fall under the medical benefit category, which typically means a smoother reimbursement process compared to oral drugs that fall under the pharmacy benefit category. For oral drugs, payers tend to manage claims more heavily, resulting in a more cumbersome prescribing and reimbursement process for practices. Unlike oral drugs, IV-administered therapies also allow physicians to recover costs associated with the purchase and administration of therapy and to ensure better patient compliance with the treatment regimen. Finally, the breast cancer community is active, engaged, and well supported by advocacy groups, which will help create awareness for new treatments in general and, we think, specifically for gedatolisib. As a result, we believe Celcuity has the opportunity to build a strong presence among medical oncologists to address this large underserved patient population. Based on our projections, we believe the addressable market potential for a standard of care second-line therapy to treat this patient population is roughly $5 billion. I'd like now to turn to our Phase III VIKTORIA-2 trial. Last month, we announced that we dosed the first patient in VIKTORIA-2, which is evaluating gedatolisib plus a CDK4/6 inhibitor that the investigator may choose and fulvestrant as first-line treatment for patients who have endocrine therapy-resistant, HR-positive, HER2-negative advanced breast cancer. The standard of care first-line treatment for most endocrine therapy-resistant patients includes any one of three approved CDK4/6 inhibitors combined with fulvestrant. Results from a recent trial suggest the median progression-free survival period for patients receiving one of these three regimens is only about 7 to 8 months, highlighting the significant need for more efficacious frontline therapy for these patients. We believe the positive top line data from the PIK3CA wild-type cohort of our VIKTORIA-1 study augurs well for the gedatolisib triplet in this patient population. I'd like now to turn to our Phase Ib/II clinical trial that is evaluating gedatolisib in combination with darolutamide in men with metastatic castration-resistant prostate cancer. In late June, we announced encouraging Phase Ib preliminary efficacy and safety data from this study, which enrolled 38 prostate cancer patients who were randomly assigned to either receive 80 milligrams of darolutamide twice daily combined with either 120 milligrams of gedatolisib in arm 1 or 180 milligrams of gedatolisib in arm 2. Gedatolisib was administered once weekly for three weeks and then one week off in both arms. The preliminary analysis for the combined arms shows the 6-month radiographic PFS rate was 66%, which compares favorably to published data for androgen receptor inhibitors in this setting. Additionally, the data highlighted the favorable safety profile of this novel combination. There were no treatment-related discontinuations, and less than 3% of patients experienced grade 3 stomatitis. These data indicate that the optimal gedatolisib dose for this patient population may not yet have been reached. We believe it's important to explore additional dose options for gedatolisib. As such, we amended the clinical trial protocol to enable exploration of additional doses in the Phase Ib portion of this clinical trial to determine the recommended Phase II dose. In addition to announcing encouraging preliminary data from our prostate cancer trial, we also announced encouraging data from an investigator-sponsored Phase II clinical trial. In this trial, 44 patients with HER2-positive, PIK3CA-mutated breast cancer were treated with gedatolisib plus standard doses of trastuzumab biosimilar. No prophylaxis for stomatitis was administered. The median number of prior anti-HER2 therapies received by enrolled patients in the metastatic setting was four or more, with 86% of patients having received at least three prior anti-HER2 therapies. These patients were heavily pretreated. The overall response rate was 43%, and no patients discontinued gedatolisib due to a treatment-related adverse event. Achieving a 43% overall response rate in patients receiving a fourth or fifth line of anti-HER2 treatment for their disease is very encouraging and compares favorably to published data for other available therapies in this group of patients. It also suggests gedatolisib in combination with HER2-targeted therapy may be an effective and well-tolerated therapeutic option for patients with HER2-positive metastatic breast cancer. Now I'd like to turn to a few corporate updates. First, the U.S. Patent and Trademark Office issued Celcuity a new patent covering the clinical dosing regimen for gedatolisib in HR-positive, HER2-negative breast cancer patients. The patent extends gedatolisib's patent exclusivity in the U.S. into 2042. With this added patent exclusivity, we expect to have a long runway to optimize the development of gedatolisib. Lastly, we also completed concurrent offerings of convertible notes, common stock, and prefunded warrants with net proceeds of $286.5 million at the end of July and beginning of August. With our current resources and other financing arrangements, we believe we are well positioned to advance multiple blockbuster indications in breast and prostate cancer and to aggressively prepare for and launch gedatolisib commercially should we receive FDA approval. I'd like now to hand the call over to Vicky Hahne, our CFO, to review our finances.

Thank you, Brian, and good afternoon, everyone. I'll provide a brief overview of our financial results for the second quarter of 2025. Our second quarter net loss was $45.3 million or $1.04 per share compared to a $23.7 million net loss or $0.62 per share for the second quarter of 2024. Our non-GAAP adjusted net loss was $40.5 million or $0.93 per share for the second quarter of 2025 compared to a non-GAAP adjusted net loss of $22.2 million or $0.58 per share for the second quarter of 2024. Research and development expenses were $40.2 million for the second quarter of 2025 compared to $22.5 million for the second quarter of 2024. Of the approximately $17.7 million increase in R&D expenses, $6.6 million was related to increased employee and consulting expenses, $6.1 million was related to increased research and development costs primarily attributable to activities supporting our ongoing clinical trials, and $5 million is related to an anticipated development milestone payment under the license agreement with Pfizer. General and administrative expenses were $3.8 million for the second quarter of 2025 compared to $1.8 million for the second quarter of 2024. Of the $2 million increase in general and administrative expenses, $1.6 million was related to increased employee and consulting expenses. The remaining $0.4 million of the $2 million increase resulted from professional fees, expanding infrastructure, and other administrative expenses. Net cash used in operating activities for the second quarter of 2025 was $36.2 million compared to $18.1 million for the second quarter of 2024. We ended the quarter with approximately $168.4 million of cash, cash equivalents, and short-term investments. However, on a pro forma basis, taking into account the net proceeds of our financing activities in Q3, cash, cash equivalents, and short-term investments as of the end of Q2 2025 was approximately $455 million. Additionally, existing financing arrangements are expected to give us access to an incremental $160 million of cash over the next few quarters, $80 million from our current term loan agreement and $36 million from the exercise of soon-to-expire in-the-money warrants. As a result, we believe we have the resources and financing in place to fund our operations through 2027. I will now hand the call back to Brian.

Thank you, Vicky. Operator, could you please open the call for questions?

Your first question comes from the line of Maury Raycroft from Jefferies.

This is Amin on for Maury. Congrats on all the progress. A couple of questions from us. First, regarding the upcoming full data presentation later this year for the PIK3CA wild-type portion of the Phase III study, can you elaborate on what we should expect to see? Specifically, will you be sharing subgroup analysis, such as PFS analysis for ESR1 wild type and mutant cohorts there? And then I have a follow-up.

Sure. So we'll be focused on our initial data presentation on the primary analyses, the primary endpoints. We would expect to present data at subsequent meetings, additional subgroup analyses.

Okay. Sounds good. And for the PIK3CA mutant population, how are you thinking about the benchmarks for success here? Is there a specific hazard ratio or PFS delta that you are considering a meaningful threshold there that could be considered clinically meaningful?

So I think there are two thresholds to consider when we're reviewing the data in that cohort. The first is the comparison to the control, which in this case is alpelisib/fulvestrant. As it turns out, given what we think is the likely outcome based on historical data for alpelisib in this population of between, let's say, 7 to 8 months, a statistically significant result would also be a clinically meaningful result of a little less than 3 months. We think if we have a positive study, we'll also be reporting clinically meaningful results. Additionally, because alpelisib is probably no longer the primary option that physicians are relying on, we think from a practical standpoint, the benchmark data that physicians will consider will be the data for capivasertib, an AKT inhibitor. And the capivasertib data reported in the post-CDK population is about a 5.5 months median PFS. So if we're able to report positive results relative to alpelisib, those will be especially positive relative to our capivasertib.

Your next question is from the line of Tara Bancroft from TD Cowen.

This is Frances on for Tara Bancroft. So just one question on our end. Since the full safety data isn't broken out in the top line, is there any more detail you can offer ahead of it? If there are better rates observed, was that overall rates or just grade 3 stomatitis?

Sure. We'll be providing that data at the upcoming conference. We were really only at this stage able to provide a general summary of what we saw, but the additional detail will be forthcoming.

Your next question is from the line of Andrew Berens from Leerink Partners.

This is Eason on for Andy. Congrats on all the progress. Just a two-parter if I can. We've noticed across various pivotal trials in the HR-positive, HER2-negative breast cancer space, it has been mixed whether the PFS primary endpoint was based on BICR, as is the case in VIKTORIA-1, or based on investigator assessment. First question is, can we expect the PFS analysis based on investigator assessment to be presented at an upcoming meeting later this year? And then second, what is the company's understanding of the concordance between BICR versus investigator assessment based on what we've seen in prior HR-positive, HER2-negative trials as well as how is this aspect evaluated by the FDA and other regulatory agencies?

Sure. No, thanks. The selection of BICR for our study as the assessment method was a function of our study being an open-label study, and that just reflects that gedatolisib is an IV-administered drug and you can't really have a plausible placebo. We use blinded assessment of the scans to eliminate potential investigator bias. That's why you see that the trials for the recent oral SERDs, the EMERALD trial and the VERITAC-2 trial were also BICR studies because, again, it's not plausible to create a placebo for fulvestrant. BICR is the method that the FDA encourages or recommends when you do have an open-label study for that purpose. In this case, the investigator data is really simply collected as part of ongoing assessment. It's more for exploratory sensitivity analysis and not a fundamental analysis. We'll be reporting data, as I indicated, in the sequence as we move from one conference to another. Regarding concordance, I think I saw one study that showed the concordance between the hazard ratios of BICR PFS and the investigator-assessed PFS were correlated well over 90%. We've conducted sensitivity analyses, many of which were prescribed by the FDA, and all the sensitivity analyses are indicating that our data is very robust, and we're very comfortable and confident about the package that we expect to submit to the FDA.

Your next question is from the line of Stephen Willey from Stifel.

I was just wondering how you're now thinking about launch-readiness. You're going to be filing an NDA here in the fourth quarter. You've got breakthrough. Presumably, there's an RTOR pathway you can leverage. What are some of the comps you look to in terms of the requisite amount of infrastructure build that you need? How do you think about scaling that infrastructure over the near term and as we get into '26?

That's a great question. A couple of points to highlight. First, we began building our team last year. We hired our Chief Commercial Officer, Eldon Mayer, in the first quarter of 2024. He has since brought on board a head of marketing, head of market access, and head of commercial operations. They focused on projects that have a long lead time, which can take up to 18 months to complete. Essentially, we've been working back from a launch date, assuming an earlier launch date to avoid being caught off guard. As we have gotten closer to launch these past few months, we've begun hiring the individuals who report to the heads of these various departments to take on more projects. Now that we have our data and a clear path to an approval decision, we will take the next step to establish additional infrastructure in the commercial operations area to support the sales force and MSL force. There are activities in market access area engaging with payers and strategic accounts. You start building out the sales force management structure, first with the head of sales and regional management, defining sales territories and geographic alignment. All those projects are on track. Regarding benchmarks, we have been deliberate about hiring individuals in these key positions who have been involved in the first launch of a company's first drug. There’s a lot of infrastructure, operational support activities necessary for effective commercial success. We believe we have hired a great team, incredibly experienced, and very focused. I think we're absolutely on track to having what we believe will be an effective launch to communicate the benefits of gedatolisib to medical oncologists.

Your next question is from the line of Gil Blum from Needham & Company.

This is Gil Blum on for Gil. Just a couple from us. Can you put into context the practical ramifications for physicians now that they may have optionality with both a doublet and triplet? I have a follow-on.

The primary goal of all these physicians is to optimize and delay as long as possible the progression of a patient's disease, and the triplet offers that to these doctors. However, given that the triplet includes palbociclib, which induces some myelosuppression, for elderly patients or those with a compromised immune system, that option may not always be appropriate. They can still achieve a very beneficial outcome with a gedatolisib doublet. Having both regimens available allows us to have access to a broad range of patients, which is always advantageous. As we describe results for different subgroups, that will help guide physicians' decision-making for whether they might prefer the doublet versus the triplet.

Very helpful. As a follow-on to Steve's question, is there any consideration on a commercial partnering strategy for a launch? It appears this may require a substantial investment, given the size of the market.

No, we're planning to launch ourselves. We understand what's required. We have a very detailed operating plan and budget, clearly defining headcount needs and timelines for onboarding. While the investment is not insignificant, it is manageable relative to the opportunity size. We've financed ourselves in a way that allows us to invest aggressively in this launch and believe that from a financial perspective, launching ourselves offers the best returns. We will not be partnering with another company.

Your last question comes from the line of Chase Knickerbocker from Craig-Hallum.

Maybe, Brian, to start, can you give us your general thoughts on the competitive landscape in the mutant population? There are obviously other actionable mutations in there with ESR, et cetera. Can you give us your general thoughts on the competitive environment and how you see gedatolisib fitting in?

For patients with PIK3CA mutations, we will be reporting data later this year. If our data is positive and shows benefits relative to alpelisib, we believe it will position gedatolisib as a new potential standard of care. As for ESR1 mutations, we don't think they will be as relevant given the drug combination we have. In the absence of inhibition of CDK4/6 or the PAM pathway in ESR1 mutant patients, data suggests that you can get some benefit if you use an oral SERD to address that pathway. We believe that if we are successfully addressing both the PAM pathway and CDK4/6, the outcome differences between ESR1 mutant and wild-type patients are unlikely to be meaningful.

Mainly, on the mutant side, to dig in a little deeper, with the most recent approval for Inavolisib, can you give us thoughts on how the market has changed in the last 10 to 12 months and any relative comparisons there?

Inavolisib, an alpha PI3K inhibitor, is approved for treating patients with PIK3CA mutations in the first-line setting for women with endocrine-resistant, advanced disease. This patient population does not overlap with the one we'll be addressing with our VIKTORIA-1 study results. The data supports that treatment-naive patients in the frontline setting will benefit from PAM pathway involvement. This drug has only shown favorable activity in patients with PIK3CA mutations, and it induces hypoglycemia that can limit its use for metabolically healthy patients. We hope that our trial shows gedatolisib is effective in treating patients independent of their PIK3CA status or metabolic status. If our data from the wild type aligns with results from VIKTORIA-2, we expect to establish gedatolisib as the potential new standard of care.

On the CMC portion of your filing, when you submit it in Q4, can you remind us of your manufacturer, and any specifics you're willing to share regarding your confidence in your CMC package?

We're very confident about the CMC package. All the data is complete, and our modules are finalized. There is an expected set of studies and analyses to demonstrate process consistency, and that's all been done. We are confident that our robust package satisfies the FDA's requirements. We've engaged directly with the FDA to validate there are no open questions based on the outline of the data we expect to provide. Overall, we believe we should be in good shape on that front.

There are no further questions at this time. I'd like to turn the call back to Mr. Brian Sullivan for closing comments. Sir, please go ahead.

Thank you for participating in our call today, and thank you for your ongoing support. I look forward to catching up with you at various conferences along the way. Take care.

Ladies and gentlemen, this concludes today's conference call. Thank you very much for your participation. You may now disconnect.