What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-14 compared with 2024-05-14 · 67 added, 57 removed, 118 unchanged (51% of the section changed)

16 unchanged sentences

We are a clinical-stage biopharmaceutical company developing innovative cancer medicines based on cell cycle, transcriptional regulation, epigenetics and mitosis control biology.

We reported revenue of $29,000 for the three months ended March 31, 2024 and no revenues for the comparable quarter ended March 31, 2023.

We reported revenue of $4,000 and $33,000 for the three and six months ended June 30, 2024, respectively, and revenues of $373,000 and $373,000 for the comparable three and six months ended June 30, 2023, respectively.

We do not expect to report a significant amount of revenue for the foreseeable future.

Our primary focus has been on our transcriptional regulation program, which is evaluating fadraciclib, a CDK2/9 inhibitor, in solid tumors and hematological malignancies .

The epigenetic/anti-mitotic program is evaluating plogosertib, a PLK1 inhibitor, in advanced cancers.

The anti-mitotic program is evaluating plogosertib, a PLK1 inhibitor, in advanced cancers.

We currently retain all marketing rights worldwide to the compounds associated with our drug programs.

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NCT#04983810 )

In this ongoing study, a total of 47 patients have been dosed to date in the 065-101 study through eight dose levels, of which 33 are evaluable for efficacy.

Dose limiting toxicities of nausea and hyperglycemia were observed, which were controlled after dose interruption, with blood glucose levels returning to normal range.

Dose level 5 (100mg twice daily for 5 days per week, 4 out of 4 weeks) has been determined as the recommended Phase 2 dose.

To date, single agent activity, including complete response, partial response and stable disease, has been observed in certain patients with advanced endometrial, squamous non-small cell lung cancer and T-cell lymphoma.

Several pretreated patients who benefitted from fadraciclib monotherapy , were retrospectively found to harbor

CDKN2A/CDKN2B alterations, including loss of function or deep deletion.

These included patients with T-cell lymphoma and also gynecological, hepatobiliary, lung, pancreatic and testicular cancers .

We plan to enroll patients in the Phase 2 proof-of-concept stage beginning with the basket cohort which will enroll patients with mechanistically relevant biomarkers, including CDKN2A and/or CDKN2B mutation or deletion.

Additional cohorts will be enrolled as resources allow.

The proof-of-concept stage includes seven histologically defined cohorts thought to be sensitive to the drug’s mechanism:

breast, colorectal (including KRAS mutant), endometrial/uterine, hepatobiliary, ovarian cancers and lymphomas.

The basket cohort will enroll patients regardless of histology with biomarkers relevant to the drug’s mechanism, including CDKN2A/B, MCL1, MYC and/or cyclin E amplified.

In this ongoing study, a total of 47 heavily pretreated patients have been dosed in the Phase 1 part of the 065-101 study through eight dose levels.

Clinical, pharmacokinetic (PK) and pharmacodynamic (PD) data from the study were presented at a poster at the 2024 American Society of Clinical Oncology (ASCO) Annual Meeting.

Patients received a median of four prior lines of therapy.

Fadraciclib was generally well tolerated with good compliance between dose levels 1 and 5.

The most common treatment related adverse events reported were nausea (66.0%), vomiting (46.8%), diarrhea (31.9%) fatigue (25.5%), and hyperglycemia (21.3%).

A total of 25 drug-related

serious adverse events (SAE) were reported in 8 patients.

The most common SAEs reported were hyperglycemia (n=4), platelet count decrease (n=3), and accidental overdose (n=3).

There were no drug-related SAEs at dose level 5 (100 mg bid, 5 days a week, for 4/4 weeks) which was selected for the Phase 2 proof of concept part of the 065-101 study.

PKs were dose-proportional and exceeded the preclinical efficacy targets for both CDK2 and CDK9.

PDs evaluated in peripheral blood showed suppression of CDKN2A/B by four hours post treatment in most patients who received 100 mg bid or higher.

A total of 34 patients had measurable target lesions at baseline.

Two partial responses were reported in patients with T-cell lymphoma, one of whom had CDKN2A loss.

A squamous non-small cell lung (NSCLC) cancer patient with CDKN2A and CDKN2B loss achieved 22% reduction in tumor burden at 4 weeks per RECIST 1.1 criteria.

In addition, clinical benefit was reported in two patients with endometrial cancer and one each with ovarian and pancreatic cancers.

The Phase 2, proof of concept part of the study is now enrolling patients with mechanistically relevant biomarkers, including CDKN2A and/or CDKN2B mutation or deletion or T-cell lymphoma.

Fadraciclib tablets can be given orally with repeat dosing which has led to transient suppression of anti-apoptosis proteins with generally good tolerability and no Grade 3 or higher hematological toxicity in the first cycle.

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NCT# 05358379 )

This ongoing open-label Phase 1/2 registration-directed study uses a streamlined design and initially seeks to determine the RP2D for single-agent oral plogosertib in a dose escalation stage.

This open-label Phase 1/2 registration-directed study uses a streamlined design and initially seeks to determine the RP2D for single-agent oral plogosertib in a dose escalation stage.

Once RP2D has been established, the study will enter into proof-of-concept, cohort stage, using a Simon 2-stage design.

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Going Concern

For the three months ended March 31, 2024, we used net cash of $0.6 million to fund our operating activities.

We have cash and cash equivalents of $2.8 million as of March 31, 2024, which together with the $8.0 million gross proceeds from equity financing received in May 2024 will allow it to meet our liquidity requirements into the fourth quarter of 2024.

For the six months ended June 30, 2024, we used net cash of $3.6 million to fund our operating activities.

We have cash and cash equivalents of $6.0 million as of June 30, 2024, which we believe will allow us to meet our liquidity requirements into the fourth quarter of 2024.

However, there remains substantial doubt about our ability to continue as a going concern.

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Liquidity and Capital Resources

The following is a summary of our key liquidity measures as of March 31, 2024 and 2023 (in $000s):

The following is a summary of our key liquidity measures as of June 30, 2024 and 2023 (in $000s):

Cash and cash equivalents

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We have incurred significant losses since our inception.

As of March 31, 2024, we had an accumulated deficit of $431.2 million.

Cash used in operating, investing and financing activities for the three months ended March 31, 2024 and 2023 is summarized as follows (in $000s):

Three Months Ended March 31,

As of June 30, 2024, we had an accumulated deficit of $434.5 million.

Cash from operating, investing and financing activities for the six months ended June 30, 2024 and 2023 is summarized as follows (in $000s):

Six Months Ended June 30,

Net cash used in operating activities

Net cash used in investing activities

Net cash provided by financing activities

Net cash provided by (used in) financing activities

Operating activities

Net cash used in operating activities decreased by $6.4 million, from $6.9 million for the three months ended March 31, 2023 to $0.5 million for the three months ended March 31, 2024.

The decrease in cash used by operating activities was primarily the result of a decrease in net loss of $2.9 million, brought about by a reduction in manufacturing and non-clinical activities, and a change in working capital of $3.5 million, due mainly to the receipt of research and development tax credits of $2.9 million during the three months ended March 31, 2024.

Net cash used in operating activities decreased by $4.6 million, from $8.2 million for the six months ended June 30, 2023 to $3.6 million for the six months ended June 30, 2024.

The decrease in cash used by operating activities was primarily the result of a decrease in net loss of $5.0 million, brought about by a reduction in clinical trial supply and non-clinical activities, offset by a change in working capital of $0.4 million.

Investing activities

Net cash used in investing activities remained relatively small for each of the three months ended March 31, 2024 and 2023 and consisted of IT-related capital expenditure in 2023.

Net cash used by investing activities remained inconsequential for each of the six months ended June 30, 2024 and 2023 and consisted of IT-related capital expenditure in 2023.

Financing activities

Net cash from financing activities remained relatively flat for each of the three months ended March 31, 2024 and 2023, consisting of the payment of the preferred stock dividend and costs associated with a securities purchase agreement in December 2023.

Net cash provided by financing activities was $6.3 million for the six months ended June 30, 2024 as a direct result of receiving approximately $6.3 million, net of expenses, from the issuance of common stock and warrants under a Securities Purchase Agreement with an institutional investor.

Net cash used in financing activities was $0.1 million for the six months ended June 30, 2023 as a result of dividend payments of approximately $0.1 million to the holders of our 6% Preferred Stock.

Funding Requirements and Going Concern

We do not currently have sufficient funds to complete development and commercialization of any of our drug candidates.

Current business and capital market risks could have a detrimental effect on the availability of sources of funding and our ability to access them in the future, which may delay or impede our progress of advancing our drugs currently in the clinical pipeline to approval by the Food and Drug Administration (“FDA”) or European Medicines Agency (“EMA”) for commercialization.

Agency (“EMA”) for commercialization.

Additionally, we plan to continue to evaluate in-licensing and acquisition opportunities to gain access to new drugs or drug targets that would fit with our strategy.

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Results of Operations

Three Months Ended March 31, 2024 and 2023

The Company recognized $29,000 of revenue for the three months ended March 31, 2024, relating to recovery of clinical manufacturing costs associated with an investigator sponsored.

There were no revenues recognized for the comparative period in 2023.

We expect to completely fulfill our obligations under this agreement by the second quarter of 2024 and further recognize a small amount of revenues at that time.

The associated clinical manufacturing costs are presented as a component of research & development.

Three and Six Months Ended June 30, 2024 and 2023

We recognized $4,000 and $33,000 of revenue for the three and six months ended June 30, 2024, respectively.

This revenue related to recovery of clinical manufacturing costs associated with an investigator sponsored study managed by Cedar-Sinai Medical Center.

Revenues recognized for both the three and six months ended June 30, 2023 were approximately $373,000.

We expect to completely fulfill our obligations under this agreement by the third quarter of 2024.

The associated clinical manufacturing costs are presented as a component of research and development expenses.

Research and Development Expenses

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● Rent and facility expenses for our offices.

The following table provides information with respect to our research and development expenditures for the three months ended March 31, 2024 and 2023 (in $000s except percentages):

The following table provides information with respect to our research and development expenditures for the three and six months ended June 30, 2024 and 2023 (in $000s except percentages):

Three Months Ended

Six Months Ended

Transcriptional Regulation (fadraciclib)

Epigenetic/anti-mitotic (plogosertib)

Anti-mitotic (plogosertib)

Other research and development expenses

Total research and development expenses

Total research and development expenses represented 64% and 78% of our operating expenses for the three months ended March 31, 2024 and 2023, respectively.

Research and development expenses decreased by $2.9 million from $5.7 million for the three months ended March 31, 2023 to $2.8 million for the three months ended March 31, 2024.

Total research and development expenses represented 60% and 76% of our operating expenses for the six months ended June 30, 2024 and 2023 respectively.

Research and development expenses decreased by $5.6 million from $10.4 million for the six months ended June 30, 2023 to $4.8 million for the six months ended June 30, 2024.

Expenditure for the transcriptional regulation program decreased by $3.9 million relative to the respective comparative period, primarily due to decreases in manufacturing and non-clinical expenditure.

Research and development expenses relating to plogosertib decreased by $1.2 million relative to the respective comparative period due to decreases in manufacturing and non-clinical expenditure.

We anticipate that overall research and development expenses for the year ended December 31, 2024 will decrease compared to the year ended December 31, 2023 as we focus on our Phase 1/2 programs in advanced solid tumors and lymphomas.

We anticipate that overall research and development expenses for the year ended December 31, 2024 will decrease compared to the year ended December 31, 2023 as we do not expect to incur further manufacturing or preclinical costs and expenditure will be primarily clinical trial costs related to our fadraciclib Phase 1/2 065-101 study in advanced solid tumors and lymphomas.

General and Administrative Expenses

General and administrative expenses include costs for administrative personnel, legal and other professional expenses and general corporate expenses.

The following table summarizes the general and administrative expenses for the three months ended March 31, 2024 and 2023 (in $000s except percentages):

The following table summarizes the general and administrative expenses for the three and six months ended June 30, 2024 and 2023 (in $000s except percentages):

Three Months Ended

Six Months Ended

Total general and administrative expenses

Total general and administrative expenses represented 36% and 22% of our operating expenses for the three months ended March 31, 2024 and 2023, respectively.

General and administrative expenses decreased by $0.1 million relative to the respective comparative period due mainly to reduction in stock compensation costs.

We expect general and administrative expenditures for the year ended December 31, 2024 to remain relatively flat compared to the year ended December 31, 2023.

Other income (expense), net

The following table summarizes other income for the three months ended March 31, 2024 and 2023 (in $000 except percentages):

Total general and administrative expenses represented 40% and 24% of our operating expenses for the six months ended June 30, 2024 and 2023 respectively.

General and administrative expenses remained relatively consistent at $3.2 million for each of the six months ended June 30, 2024 and 2023.

We expect general and administrative expenditures for the year ended December 31, 2024 to be lower than our expenditures for the year ended December 31, 2023, due to management efforts to lower costs across all departments.

Other (expense) income, net

The following table summarizes other (expense) income, net for the three and six months ended June 30, 2024 and 2023 (in $000 except percentages):

Three Months Ended

Six Months Ended

Foreign exchange gains (losses)

Interest income

Interest (expense) income

Other income (expense), net

Total other income (expense), net

Total other income decreased by $0.1 million from $0.2 million for the three months ended March 31, 2023 to $0.1 million for the three months ended March 31, 2024.

Other income relates to royalties receivable under a December 2005 Asset Purchase Agreement, or APA, whereby Xcyte Therapies, Inc., or Xcyte (a business acquired by us in March 2006) sold certain assets and intellectual property to ThermoFisher Scientific Company, or TSC (formerly Invitrogen Corporation) through the APA and other related agreements.

The assets and technology were not part of our product development plan following the transaction between Xcyte and Cyclacel in March 2006.

Accordingly, we

presented $52,000 and $0 as other income arising from royalties from the APA during the three months ended March 31, 2024 and 2023 respectively.

Total other (expense) income, net

Total other income decreased by $60,000 from $90,000 for the six months ended June 30, 2023 to $30,000 for the six months ended June 30, 2024.

Other income for the six months ended June 30, 2024 relates to royalties receivable under a December 2005 Asset Purchase Agreement, or APA, whereby Xcyte Therapies, Inc., or Xcyte (a business acquired by us in March 2006) sold certain assets and intellectual property to ThermoFisher Scientific Company, or TSC (formerly Invitrogen Corporation) through the APA and other related agreements.

The assets and technology were not

part of our product development plan following the transaction between Xcyte and Cyclacel in March 2006.

Accordingly, we presented $52,000 as other income arising from royalties from the APA during each of the six months ended June 30, 2024 and 2023 respectively.

Foreign exchange gains (losses)

Foreign exchange gains increased by $88,000, from a loss of $87,000 for the three months ended March 31, 2023, to a gain of $1,000 for the three months ended March 31, 2024.

Foreign exchange gains increased by $165,000, from a loss of $161,000 for the six months ended June 30, 2023, to a gain of $4,000 for the six months ended June 30, 2024.

Other income (expense), net for the year ended December 31, 2024, will continue to be impacted by changes in foreign exchange rates and the receipt of income under the APA.

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Credit is taken for research and development tax credits, which are claimed from the United Kingdom’s revenue and customs authority, or HMRC, in respect of qualifying research and development costs incurred.

The following table summarizes total income tax benefit for the three months ended March 31, 2024 and 2023 (in $000s except percentages):

The following table summarizes total income tax benefit for the three and six months ended June 30, 2024 and 2023 (in $000s except percentages):

Three Months Ended

Six Months Ended

Total income tax benefit

The total income tax benefit, which comprised of research and development tax credits recoverable, remained flat at approximately $1.3 million for each of the three months ended March 31, 2024 and 2023.

The total income tax benefit, which comprised of research and development tax credits recoverable, decreased by approximately $0.1 million, from $1.9 million for the six months ended June 30, 2023 to $1.8 million for the six months ended June 30, 2024.

The level of tax credits recoverable is linked directly to qualifying research and development expenditure incurred in any one year and the availability of trading losses.

1 unchanged sentence

The amount of tax credits we will receive is entirely dependent on the amount of eligible expenses we incur and could be restricted by any future cap introduced by HMRC.

Beyond 2024, we cannot be certain of our eligibility to receive this tax credit or if eligible, the amount that may be received, due to proposed changes by HMRC to the eligibility criteria.

Beyond 2024, we cannot be certain of our eligibility to receive this tax credit or if eligible, the amount that may be received, as a result of any future changes by HMRC to the eligibility criteria.

Critical Accounting Policies and Estimates

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Actual results may differ from these estimates under different assumptions or conditions.

A summary of our critical accounting policies is presented in Part II, Item 7, of our Annual Report on Form 10-K for the year ended December 31, 2023 and Note 2 to our unaudited consolidated financial statements included elsewhere in this Quarterly

Report on Form 10-Q.

There have been no material changes to our critical accounting policies during the three months ended March 31, 2024.

There have been no material changes to our critical accounting policies during the six months ended June 30, 2024.

Quantitative and Qualitative Disclosures about Market Risk

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis