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Item 2. Management’s Discussion and Analysis

2022-05-16 compared with 2021-11-09 · 272 added, 666 removed, 207 unchanged (82% of the section changed)

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that involve risks and uncertainties.

You should review the “Risk Factors” discussed in our Annual Report on Form 10-K for

the year ended December 31, 2020, in Exhibit 99.4 to our Current Report on Form 8-K, filed with the SEC on April 8, 2021 and elsewhere

in this Quarterly Report for a discussion of important factors that could cause actual results to differ materially from the results

described in or implied by the forward-looking statements contained in the following discussion and analysis.

are a clinical-stage biotechnology company seeking to extend the lives of cancer patients by pursing an integrated companion diagnostic

(CDx) and therapeutic (Rx) strategy that leverages our CELsignia CDx platform.

CELsignia is uniquely able to analyze live patient tumor

cells to identify new groups of cancer patients likely to benefit from targeted therapies.

This enables a CELsignia CDx to support advancement

of new indications for already approved targeted therapies.

Our therapeutic strategy aims to utilize CELsignia’s unique insights

into tumor cell biology to identify, in-license, and develop potential first-in-class or best-in-class targeted therapies that treat

the same cancer driver a CELsignia CDx can identify.

We believe this integrated CDx and Rx strategy will maximize the impact our CELsignia

platform has on the treatment landscape for cancer patients.

first drug candidate we are developing internally is gedatolisib, a potent, well-tolerated, small molecule dual inhibitor, administered

intravenously, that selectively targets all Class 1 isoforms of PI3K and mammalian target of rapamycin (mTOR).

In April 2021, we obtained

exclusive global development and commercialization rights to gedatolisib under a license agreement with Pfizer, Inc.

Our interest in

gedatolisib was prompted after we conducted a study of various PI3K targeted therapeutics while developing our CELsignia PI3K Activity

Our CELsignia platform allows us to obtain proprietary insights about the relative effectiveness of PI3K targeted therapies.

study found that gedatolisib inhibited higher levels of PI3K-involved signaling activity than the other PI3K targeted therapeutics we

evaluated and demonstrated superior drug synergy when combined with other targeted therapies.

Gedatolisib’s initial clinical development

program will focus on the treatment of patients with estrogen receptor positive (ER+), HER2-negative, advanced or metastatic breast cancer.

Additional clinical development programs are expected to focus on other tumor types that involve a hormonal signaling pathway, such as

endometrial, ovarian, or prostate cancer.

the development of a potential first-in-class targeted therapy for breast cancer, like gedatolisib, with our CELsignia platform is a

natural extension of our strategy to use our CELsignia CDx to enable new indications for other companies’ targeted therapies.

combining companion diagnostics designed to enable proprietary new drug indications with targeted therapies that treat signaling dysregulation

our CDx identifies, we believe we are uniquely positioned to improve the standard-of-care for many early and late-stage breast cancer

Our goal is to play a key role in the multiple treatment approaches required to treat breast cancer patients at various stages

of their disease.

With each program, we are:

the proprietary insights CELsignia provides into live patient tumor cell function

a CELsignia CDx to identify new patients likely to respond to the paired targeted therapy

a new targeted therapeutic option for breast cancer patients

the probability of getting regulatory approval to market the targeted therapy indication

(Rx) Product Development

(PF-05212384) is a potent, reversible dual inhibitor that selectively targets PI3K and mTOR.

Gedatolisib was originally developed by

Wyeth and clinical development was continued by Pfizer after it acquired Wyeth.

We exclusively licensed global rights to gedatolisib

from Pfizer in April 2021.

An on-going Phase 1b trial evaluating patients with ER+/HER2- metastatic breast cancer was initiated in 2016

and subsequently enrolled 138 patients.

Patient enrollment for the four expansion arms of the trial is complete.

Based on the favorable

preliminary results reported to date from the Phase 1b trial, we intend to initiate, subject to feedback from the FDA, a Phase 2/3 clinical

trial evaluating gedatolisib in combination with palbociclib and an endocrine therapy in patients with ER+/HER2- advanced or metastatic

breast cancer in the first half of 2022.

cancer is the most prevalent cancer in women, accounting for 30% of all female cancers and 13% of cancer-related deaths in the United

The National Cancer Institute estimated that approximately 270,000 new cases of breast cancer would be diagnosed in the United

States in 2019, and approximately 42,000 breast cancer patients would die of the disease.

Approximately 190,000, or 70%, of these new

cases are for ER+/HER2- breast cancer.

different breast cancer subtypes are currently identified using molecular tests that determine the level of ER and HER2 expression.

70% of breast cancers are ER+/HER2-, which is indicative of hormone dependency.

Despite progress in treatment strategies, metastatic

ER+/HER2- breast cancer (mBC) remains an incurable disease, with a median overall survival (OS) of three years and a five-year survival

different classes of targeted therapies are currently used to treat ER+/HER2- tumors:

endocrine-based therapies, CDK4/6 inhibitors,

PI3K inhibitors and mTOR inhibitors.

Each of the CDK4/6 inhibitors, PI3K inhibitors and mTOR inhibitors are generally used to respond

to the related mechanisms of resistance to endocrine therapy, namely, activation of the CDK4/6, PI3K and mTOR pathways.

These drugs generated

revenues of over $8 billion globally in 2020.

specifically relates to gedatolisib, activation of the PI3K/mTOR pathway has been implicated in a wide variety of human cancers, involving

either activating mutations, or other unknown drivers of pathway amplification.

These include cancers of the breast, prostate, endometrial,

colon, rectum, and lung, among others.

constitutes a lipid kinase family involved in the regulation of diverse cellular processes, including cell proliferation, survival, cytoskeletal

organization, and glucose transport.

Class I PI3Ks are of particular therapeutic interest.

They are heterodimers, comprising a catalytic

(p110α, p110β, p110δ, or p110γ) and a regulatory (p85α, p55α, p50α, p85β, p55γ, or

p101) subunit.

Oncogenic PI3K signaling is activated by cell-surface receptors such as receptor tyrosine kinases, G-protein-coupled receptors,

and also by well-known oncogenic proteins such as RAS.

associated with PI3K involve complex essential cell regulatory mechanisms including feedforward and feedback signaling loops.

Overactivation

of the pathway is frequently present in human malignancies and plays a key role in cancer progression.

Each of the four catalytic isoforms

of class I PI3K preferentially mediate signal transduction and tumor cell survival based on the type of malignancy and the genetic or

epigenetic alterations an individual patient harbors.

For example, studies have demonstrated the p110α catalytic isoform is necessary

for the growth of tumors driven by PIK3CA mutations and/or oncogenic RAS and receptor tyrosine kinases;

the p110β catalytic isoform

mediates tumorigenesis arising from the loss of the dephosphorylase activity of PTEN;

and the p110δ catalytic isoform is highly

expressed in leukocytes, making it a desirable target for inhibition in the treatment of hematologic malignancies.

Due to the multiple

subcellular locations, activities, and importance of the different PI3K complexes in regulating many types of cancer cell proliferation,

control of PI3K activity is an important target in cancer therapy.

is as a critical effector in cell-signaling pathways commonly dysregulated in human cancers.

The mTOR signaling pathway integrates both

intracellular and extracellular signals and serves as a central regulator of cell metabolism, growth, proliferation, and survival.

is a serine/threonine protein kinase, a downstream effector of PI3K, and regulated by hormones, growth factors, and nutrients, that is

contained in two functionally distinct protein assemblies:

mTOR complex 1 (mTORC1) and mTOR complex 2 (mTORC2).

mTORC1 belongs to a complex

network of regulatory feedback loops, and once certain levels of activation are reached, is normally responsible for limiting the proliferative

signals transmitted by upstream effectors such as PI3K/AKT activity.

Equally complex mTORC2 regulates AKT phosphorylation, GSK3β,

and control over glycolysis, and participates in organizing the cellular actin cytoskeleton.

In addition, mTORC1 activation leads to

the direct reduction of mTORC2 activity and mTOR can activate the functional domain of the ER, leading to ligand-independent hormone

receptor activation.

In cancer, dysfunctional signaling leads to various constitutive activities of mTOR complexes, making mTOR a good

therapeutic target.

as Resistance Mechanism to Endocrine and CDK4/6 Inhibitors

upregulation of the PI3K/AKT/mTOR pathway promotes hormone dependent and independent ER transcriptional activity, which contributes to

endocrine resistance, leading to tumor cell growth, survival, motility, and metabolism.

It has also been demonstrated in vivo that PI3K

and mTOR inhibition can restore sensitivity to endocrine therapy, providing a strong rationale for the combination of the two therapies.

addition, the PI3K/AKT/mTOR pathway, like other mitogenic pathways, can also promote the activities of cyclin D and CDK4/6 to drive proliferative

cell cycling.

Internal preclinical studies conducted by Pfizer provided evidence in cell-line xenograft models that the combination of

PI3K and CDK4/6 inhibitors may overcome both intrinsic and adaptive resistance to endocrine therapy, leading to tumor regressions.

an MCF7 xenograft model (ER+/HER2-/PIK3CA mutant) the combination of gedatolisib with palbociclib and fulvestrant led to durable tumor

Importantly, tumors regressed to minimal volumes within 20 days of triplet therapy, and continued to remain dormant, without

further therapy, for up to 90 days.

of Gedatolisib over other PI3K and mTOR inhibitors

important role the PI3K/AKT/mTOR pathway plays in cancer has led to significant investment in the development of many different PI3K

and mTOR inhibitors for solid tumors.

However, developing efficacious and well-tolerated therapies that target this pathway has been

This reflects the inherent adaptability and complexity of the PI3K pathway, where numerous feedforward and feedback loops,

crosstalk with other pathways, and compensatory pathways enable resistance to PI3K inhibition.

Another major hurdle for the development

of PI3K pathway inhibitors has been the inability to achieve optimal drug-target blockade in tumors while avoiding undue toxicities in

These challenges may explain why PI3K and mTOR inhibitors have not yielded the outstanding clinical activity many researchers

believe there is significant potential for gedatolisib to address previously treated breast cancer tumors and has the potential to be

used in other tumor types where the PI3K/AKT/mTOR pathway is either:

i) driving tumorigenesis directly;

ii) cooperating with other dysregulated

signaling pathways;

or iii) a mechanism of resistance to other drug therapies.

a result, we believe gedatolisib’s unique mechanism of action and intravenous formulation offer distinct advantages over currently

approved and investigational therapies that target PI3K or mTOR alone or together.

drug resistance that can occur with isoform-specific PI3K inhibitors.

You should review the “Risk Factors” discussed in Item 1A of Part II in this Quarterly

Report for a discussion of important factors that could cause actual results to differ materially from the results described in or implied

by the forward-looking statements contained in the following discussion and analysis.

is a clinical-stage biotechnology company seeking to extend the lives of cancer patients by pursuing an integrated therapeutic and companion

diagnostic strategy.

The company’s lead therapeutic candidate is gedatolisib, a pan-PI3K/mTOR inhibitor.

Its mechanism of action

and pharmacokinetic properties are highly differentiated from other currently approved and investigational therapies that target PI3K

or mTOR alone or together.

The company expects to initiate a Phase 3 study evaluating gedatolisib in patients with HR+/HER2- advanced

breast cancer in 2022.

Its CELsignia companion diagnostic platform is uniquely able to analyze live patient tumor cells to identify new

groups of cancer patients likely to benefit from already approved targeted therapies.

lead drug candidate, gedatolisib, is a potent, well-tolerated, small molecule dual inhibitor, administered intravenously, that selectively

targets all class I isoforms of PI3K and mammalian target of rapamycin (mTOR).

In April 2021, we obtained exclusive global development

and commercialization rights to gedatolisib under a license agreement with Pfizer, Inc.

We believe gedatolisib’s unique mechanism

of action, differentiated chemical structure, favorable pharmacokinetic properties, and intravenous formulation offer distinct advantages

over currently approved and investigational therapies that target PI3K or mTOR alone or together.

limitations of therapies that only inhibit a single class I PI3K isoform or only one mTOR kinase complex

is a pan-class I isoform PI3K inhibitor with low nanomolar potency for the p110α, p110β, p110γ, and p110δ

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upon the aberrations associated with the linked pathway.

A pan-PI3K inhibitor can thus treat tumors harboring abnormalities that

signal through different PI3K isoforms, which would potentially induce anti-tumor activity in a broader population of patients than

an isoform-specific PI3K inhibitor.

In addition, it has been reported that inhibition of one PI3K isoform may be offset by the increased

activity of the other isoforms through different adaptive mechanisms.

Inhibiting all four PI3K isoforms, as gedatolisib does, can

thus prevent the confounding effect of isoform interaction that may occur with isoform-specific PI3K inhibitors.

paradoxical activation of PI3K induced by mTOR inhibition.

a potent inhibitor of mTOR, in addition to PI3K, gedatolisib, inhibits the PI3K/AKT/mTOR pathway both upstream and downstream of

Furthermore, it has been demonstrated that the PI3K pathway is activated following selective mTOR inhibition by relief of normal

feedback regulatory mechanisms, thus providing a compelling rationale for simultaneous inhibition of PI3K and mTOR.

When a therapy only inhibits a single class I isoforms (e.g., alpelisib,

a PI3K-α inhibitor) or only one mTOR kinase complex (e.g., everolimus, an mTORC1 inhibitor), numerous feedforward and feedback

loops between the PI3K isoforms and mTOR cross-activates the uninhibited sub-units.

This, in turn, induces compensatory resistance

that reduces the efficacy of isoform specific PI3K or single mTOR kinase complex inhibitors.

Inhibiting all four PI3K isoforms and

both mTOR complexes, as gedatolisib does, thus prevents the confounding effect of isoform interaction that may occur with isoform-specific

PI3K inhibitors and the confounding interaction between PI3K isoforms and mTOR.

tolerated by patients than oral PI3K and mTOR drugs

is administered intravenously (IV) once weekly or on a four-week cycle of three weeks-on, one week-off, in contrast to the orally

administered pan-PI3K or dual PI3K/mTOR inhibitors that are no longer being clinically developed.

Oral pan-PI3K or PI3K/mTOR inhibitors

have repeatably been found to induce significant side effects that were not well tolerated by patients.

This typically leads to a

high proportion of patients requiring dose reductions or treatment discontinuation.

The challenging toxicity profile of these drug

candidates ultimately played a significant role in the decisions to halt their development, despite showing promising efficacy.

contrast, gedatolisib stabilizes at lower concentration levels in plasma compared to orally administered PI3K inhibitors, resulting

in less toxicity, while maintaining concentrations sufficient to inhibit PI3K/AKT/mTOR signaling.

is administered intravenously (IV) on a four-week cycle of three weeks-on, one week-off, in contrast to the orally administered pan-PI3K

or dual PI3K/mTOR inhibitors that are no longer being clinically developed.

Oral pan-PI3K or PI3K/mTOR inhibitors have repeatably

been found to induce significant side effects that were not well tolerated by patients.

This typically leads to a high proportion

of patients requiring dose reductions or treatment discontinuation.

The challenging toxicity profile of these drug candidates ultimately

played a significant role in the decisions to halt their development, despite showing promising efficacy.

By contrast, gedatolisib

stabilizes at lower concentration levels in plasma compared to orally administered PI3K inhibitors, resulting in less toxicity, while

maintaining concentrations sufficient to inhibit PI3K/mTOR signaling.

Isoform-specific

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in 39% of patients evaluated.

In addition, 26% of patients discontinued treatment.

By contrast, in the 103-patient dose expansion

portion of the Phase 1b clinical trial with gedatolisib, only 7% of patients experienced Grade 3 or 4 hyperglycemia and less than

10% discontinued treatment.

Experience with Gedatolisib

of September 30, 2021, 492 patients with solid tumors have received gedatolisib in eight clinical trials sponsored by Pfizer.

In addition, 26% of patients discontinued alpelisib due to treatment related adverse events.

in the 103-patient dose expansion portion of the Phase 1b clinical trial with gedatolisib, only 7% of patients experienced Grade

3 or 4 hyperglycemia and less than 10% discontinued treatment.

of March 31, 2022, 492 patients with solid tumors have received gedatolisib in eight clinical trials sponsored by Pfizer.

patients, 129 were treated with gedatolisib as a single agent in three clinical trials.

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anti-cancer agents in nine investigator sponsored clinical trials.

1 First-in-Human Study

conducted a Phase 1, open-label, dose-escalation first-in human study of single-agent gedatolisib in patients with advanced solid tumors.

The primary objective of Part 1 of the study was to determine the safety, tolerability, and maximum tolerated dose (MTD) of single-agent

gedatolisib administered once weekly as an intravenous (IV) infusion.

Seventy-seven patients with advanced solid tumors received doses

of gedatolisib and the MTD was determined to be 154 mg IV once weekly (n = 42).

Subsequent analysis determined that the recommended Phase

2 dose could be increased to 180 mg IV once weekly.

the MTD, the majority of patients enrolled in the MTD group experienced only grade 1 treatment-related adverse events (AEs).

treatment-related adverse events were noted in 23.8% of patients, and the most frequently reported included mucosal inflammation and

stomatitis (7.1%), increased alternative lengthening of telomeres (ALT) (7.1%), and increased aspartate aminotransferase (AST) (4.8%).

No treatment-related AEs of grade 4 or 5 severity were reported at any dose level.

1b ER+/HER2- mBC Clinical Trial Results (preliminary)

2016, Pfizer initiated a Phase 1b trial dose-finding trial with an expansion portion for safety and efficacy to evaluate gedatolisib

when added to either the standard doses of palbociclib plus letrozole or palbociclib plus fulvestrant in patients with ER+/HER2- metastatic

breast cancer.

PI3K mutation status was not used as an eligibility criterion.

Patient enrollment for the trial is complete.

illustration below depicts how the combination of gedatolisib, palbociclib, and fulvestrant is intended to simultaneously block interdependent

ER, PI3K, mTOR & CDK signaling pathways in ER+ breast cancer to address ER and CDKi resistance mechanisms.

total of 138 patients with ER+/HER2- metastatic breast cancer were dosed in the clinical trial.

patients were enrolled in two dose escalation arms to evaluate the safety and tolerability and determine the MTD of gedatolisib when

used in combination with the standard doses of palbociclib and endocrine therapies.

The MTD was determined to be 180 mg administered

intravenously once weekly.

patients were enrolled in one of four expansion arms (A, B, C, D) to determine if the triplet combination of gedatolisib plus palbociclib

and letrozole or gedatolisib plus palbociclib and fulvestrant produced a superior objective response (OR), compared to historical

control data of the doublet combination (palbociclib plus endocrine therapy).

All patients received gedatolisib in combination with

standard doses of palbociclib and endocrine therapy (either letrozole or fulvestrant).

In Arms A, B, and C, patients received an

intravenous dose of 180 mg of gedatolisib once weekly.

In Arm D, patients received an intravenous dose of 180 mg of gedatolisib on

a four-week cycle of three weeks-on, one week-off.

Objective response was determined using Response Evaluation Criteria in Solid

Tumors v1.0, or RECIST v1.0.

mBC with progression and no prior endocrine-based systemic therapy or a CDK4/6 inhibitor in the metastatic setting.

endocrine-based therapy for metastatic disease (CDK4/6 treatment naive).

mBC with progression during one or two prior endocrine-based systemic therapy in the metastatic setting, with no prior therapy

with any CDK inhibitor.

Second- or third-line endocrine-based therapy for metastatic disease.

mBC with progression during one or two prior endocrine-based systemic therapies in the metastatic setting and following prior

therapy with a CDK inhibitor.

Second- or third-line endocrine-based therapy for metastatic disease.

mBC having progressed on a CDK inhibitor in combination with endocrine therapy as the most recent regimen for metastatic disease.

Second- or third-line endocrine-based therapy for metastatic disease.

preliminary analysis for the 103 patients enrolled in the expansion portion of the Phase 1b clinical trial, as of the database cutoff

date of January 11, 2021, showed:

Efficacy analysis for all arms in aggregate:

60% objective response rate (ORR):

53 of the 88 evaluable patients

had either a confirmed or unconfirmed partial response, or PR (48 confirmed, 5 unconfirmed).

75% clinical benefit rate (CBR):

66 of the 88 evaluable patients

had either a confirmed PR or had stable disease for 24 weeks.

Best responses, as measured by RECIST v1.0, are shown in the

following chart.

The dotted line represents the cutoff for PR (defined as a 30% reduction from baseline).

Preliminary safety analysis:

For all arms in aggregate,

all patients experienced at least one Grade 1 or Grade 2 treatment-emergent adverse event.

The most commonly reported adverse events

regardless of grade and occurring in at least 30% of patients included stomatitis (81%), neutropenia (80%), nausea (75%), fatigue (68%),

dysgeusia (46%), vomiting (45%), anemia (40%), diarrhea (34%), decreased appetite (32%), leukopenia (32%).

For all arms in aggregate, the Grade 3 and 4 treatment-emergent

adverse events occurring in at least 20% of patients were neutropenia (67%), stomatitis (27%) and rash (20%).

Neutropenia is a known

class effect of CDK4/6 inhibitors.

Stomatitis was reversible in most patients with a steroidal mouth rinse.

All grades of treatment-related

adverse events related to hyperglycemia was reported in 22% of patients;

Grade 3 or 4 hyperglycemia was reported in 7% of patients.

was discontinued in 10% of patients.

For the patients in Arm D, who received the recommended phase

two dose, Grade 3 and 4 treatment-emergent adverse events occurring in at least 20% of patients were neutropenia (67%) stomatitis and

All grades of treatment-related adverse events related to hyperglycemia was reported in 22% of patients;

Grade 3 or 4 hyperglycemia

was reported in 7% of patients.

Gedatolisib was discontinued in 7% of patients.

As of the cutoff date, 22 patients were continuing to receive

gedatolisib in combination with the other study drugs, 17 of whom have been on study treatment for more than two years.

Preliminary best overall response data for each arm is presented

in the table below:

(evaluable patients)

CDKi-pretreated

Overall Response Rate

(evaluable patients)

Clinical Benefit Rate

(evaluable patients)

20 of the 24 evaluable patients had a confirmed PR.

9 of the 12 evaluable patients had either a confirmed PR or unconfirmed PR (7 confirmed PR, 2 unconfirmed PR).

9 of the 27 evaluable patients had either a confirmed PR or unconfirmed PR (7 confirmed PR, 2 unconfirmed PR).

15 of the 25 evaluable patients had either a confirmed PR or unconfirmed PR (14 confirmed PR, 1 unconfirmed PR).

Preliminary progression free survival (PFS) data for each arm

is presented in the table below:

(enrolled patients)

(months) (95% CI)

(Not Yet Reached)

light of the preliminary results reported to date from the Phase 1b trial, we intend to initiate, subject to feedback from the FDA, a

Phase 2/3 clinical trial evaluating gedatolisib in combination with palbociclib and an endocrine therapy in patients with ER+/HER2- advanced

or metastatic breast cancer in the first half of 2022.

expect to use the CELsignia PI3K Activity Test to help support development of gedatolisib for breast cancer indications.

studies demonstrate how measurement of PI3K-involved signaling may provide a sensitive and specific method of identifying patients most

likely to benefit from PI3K inhibitors.

We believe CELsignia tests uniquely enable us to pursue indications simultaneously for unselected

patient populations and CELsignia selected patient sub-groups.

This approach can greatly reduce the risk of pursing an indication for

a large, but unselected patient population, as we plan to do for the initial gedatolisib indication.

By combining the capabilities of

CELsignia PI3K Activity Test with a potent pan-PI3K/mTOR inhibitor like gedatolisib, we believe we are uniquely suited to maximize the

probability of obtaining regulatory approval to market gedatolisib.

2 Pilot Clinical Trial for HER2+/PIK3CA+ Patients

Korean Cancer Study Group sponsored a Phase 2 pilot clinical trial to evaluate gedatolisib combined with a trastuzumab biosimilar (Herzuma®),

in patients with HER2+/PIK3CA+ metastatic breast cancers whose disease had progressed after treatment with three or more prior HER2 targeted

therapy regimens.

The clinical trial commenced in December 2019 and interim efficacy data from the first 16 patients enrolled was presented

at the San Antonio Breast Cancer Symposium in December 2020.

Patients received a trastuzumab biosimilar (8 mg/kg IV for 1st cycle loading

dose, and then 6 mg/kg IV every 3 weeks) plus gedatolisib (180 mg, weekly IV).

The primary endpoint was objective response, a reduction

of at least 30% in tumor volume by RECIST v1.1.

of a data cutoff date of October 30, 2020, nine of 16 patients achieved a partial response, an ORR of 56%, and four patients had stable

Thirteen of 16 patients thus received either a partial response or stable disease, resulting in a clinical benefit rate of 81%.

Best responses are shown in the following chart.

The dotted lines represent the cutoff for progressive disease (>20% tumor growth)

and for partial response (>30% tumor regression).

Patient whose target lesion decreased by 63% but a new leptomeningeal seeding occurred.

duration of treatment for the 16 patients evaluated is shown in the chart below.

As of the October 30, 2020 data cutoff, 16 patients

(80%) remained on therapy.

Four patients discontinued treatment, one due to disease progression, one due to an adverse event of Grade

1 diarrhea, one participant decision, and one patient being unable to undergo the required MRI imaging due to a titanium rod implant

from non-treatment related worsening of scoliosis.

At the time of data cut-off, the median time on treatment for these 20 patients was

10.1 cycles (approximately 10 months) and all 10 patients who had achieved an objective response remained on therapy assessment.

time of the analysis, nine patients had a continuing response.

The dashed lines show the response at 3 months and 6 months.

Development and CDx Programs

Phase 1b trial (B2151009) evaluating patients with HR+/HER2- metastatic breast cancer was initiated in 2016 and subsequently enrolled

138 patients.

Ten patients from this study continue to receive study treatment, as of March 31, 2022, each of whom have received study

treatment for more than three years.

The B2151009 clinical trial was an open label, multiple arm Phase 1b study that evaluated

gedatolisib in combination with palbociclib (CDK4/6 inhibitor) and fulvestrant or letrozole in patients with HR+/HER2- advanced breast

Thirty-five patients were enrolled in two dose escalation arms to evaluate the safety and tolerability and to determine the maximum

tolerated dose (MTD) of gedatolisib when used in combination with the standard doses of palbociclib and endocrine therapy (letrozole

or fulvestrant).

The MTD was determined to be 180 mg administered intravenously once weekly.

A total of 103 patients were subsequently

enrolled in one of four expansion arms (A, B, C, D).

objective overall response rates (ORR) were observed in all four expansion arms and were comparable in each arm for PIK3CA WT and PIK3CA

In treatment-naïve patients (Arm A), ORR was 85%.

In patients who received prior hormonal therapy alone or in combination

with a CDK4/6 inhibitor (Arms B, C, and D), ORR ranged from 32% to 77%.

Each arm achieved its primary endpoint target, which was reporting

higher ORR in the study arm than ORR from either the PALOMA-2 (ORR=55%) study that evaluated palbociclib plus letrozole for Arm A or

the PALOMA-3 study (ORR=25%) that evaluated palbociclib plus fulvestrant for Arms B, C, and D.

For all enrolled patients, a clinical

benefit rate (CBR) of ≥79% was observed.

Median progression-free survival (PFS) was 31.1 months for patients receiving first-line

treatment (Arm A) and 12.9 months for patients who received a prior CDK4/6 inhibitor and were treated in the study with the Phase 3 dosing

schedule (Arm D).

combined with palbociclib and endocrine therapy demonstrated a favorable safety profile with manageable toxicity.

The majority of treatment

emergent adverse events were Grade 1 and 2.

The most frequently observed adverse events included stomatitis/mucosal inflammation, the

majority of which were Grade 1 and 2.

The most common Grade 4 AEs were neutropenia and neutrophil count decrease, which were assessed

as related to treatment with palbociclib.

No grade 5 events were reported in this study.

are preparing to initiate VIKTORIA-1, a Phase 3, open-label, randomized clinical trial to evaluate the efficacy and safety of two regimens

in adults with HR+/HER2- advanced breast cancer whose disease has progressed after prior CDK4/6 therapy in combination with an aromatase

1) gedatolisib in combination with palbociclib and fulvestrant;

and 2) gedatolisib in combination with fulvestrant.

to initiate the VIKTORIA-1 study in mid-2022.

clinical trial will enable separate evaluation of subjects according to their PIK3CA status.

Subjects who meet eligibility criteria and

are PIK3CA WT will be randomly assigned (1:1:1) to receive a regimen of either gedatolisib, palbociclib, and fulvestrant (Arm A), gedatolisib

and fulvestrant (Arm B), or fulvestrant (Arm C).

Subjects who meet eligibility criteria and are PIK3CA MT will be randomly assigned (1:1)

to receive a regimen of either gedatolisib, palbociclib, and fulvestrant (Arm D) or alpelisib and fulvestrant (Arm E).

proprietary CELsignia diagnostic platform is the only commercially ready technology we are aware of that uses a patient’s living

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with the pharmaceutical company seeking a new drug approval for the matching therapy.

CELsignia platform provides an important advantage over traditional molecular diagnostics.

Current molecular diagnostics analyze fragmented

cells to obtain a snapshot of the genetic mutations present in a patient’s tumor.

Using cell fragments prevents molecular diagnostics

from analyzing the dynamic cellular activities, known as cell signaling, that regulate cell proliferation or survival.

Cancer can develop

when critical cell signaling, regulating physiologic activity such as cell proliferation, becomes abnormal or dysregulated.

Since genetic

mutations are often only weakly correlated to the dysregulated cell signaling activity driving a patient’s cancer, a molecular

diagnostic is prone to providing an incomplete diagnosis.

CELsignia tests overcome this limitation by measuring dynamic cell signaling

activity in a cancer patient’s living tumor cells.

When a CELsignia test detects abnormal signaling activity, a more accurate diagnosis

of the patient’s cancer driver is obtained.

are supporting the advancement of new potential indications for seven different targeted therapies, controlled by other pharmaceutical

are supporting the advancement of new potential indications for four different targeted therapies, controlled by other pharmaceutical

companies, that would rely on a CELsignia CDx to select patients.

Six Phase 2 trials are underway to evaluate the efficacy and safety

Five Phase 2 trials are underway to evaluate the efficacy and safety

of these therapies in CELsignia selected patients.

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with a molecular test.

first analytically validated and commercially ready test using our CELsignia platform, the CELsignia HER2 Pathway Activity Test for breast

cancer, diagnoses two new sub-types of HER2-negative breast cancer that traditional molecular diagnostics cannot detect.

studies show that approximately 15-20% of HER2-negative breast cancer patients have abnormal HER2 signaling activity similar to levels

found in HER2-positive breast cancer cells.

As a result, these HER2-negative patients have undiagnosed HER2-driven breast cancer and

would be likely to respond to the same anti-HER2 targeted therapies only HER2-positive patients receive today.

We have three interventional

clinical trials underway to evaluate the efficacy of HER2 targeted therapies in breast cancer patients selected with our CELsignia HER2

Pathway Activity Test.

second CELsignia test for breast cancer evaluates independent c-Met signaling activity and its involvement with HER family signaling

in HER2-negative breast cancer tumor cells.

Our internal studies show that approximately 20%-25% of HER2-negative breast cancer patients

have abnormal c-Met signaling activity that is co-activated with abnormal HER family signaling.

These studies suggest that this sub-group

of HER2-negative breast cancer patients may best respond to treatment with a combination of HER family and c-Met inhibitors.

two interventional clinical trials underway to evaluate the efficacy of HER2 and c-Met targeted therapies, in previously treated metastatic

HER2-negative breast cancer patients selected with our CELsignia Multi-Pathway Activity Test, or CELsignia MP Test.

third CELsignia test for breast cancer evaluates PI3K signaling in HER2-negative breast cancer tumor cells.

Our internal studies demonstrate

how measurement of PI3K-involved signaling may provide a more sensitive and specific method of identifying patients most likely to benefit

from PI3K inhibitors than current genetic tests that measure PI3K mutations.

We intend to combine these three tests to expand the CELsignia

With this next generation CELsignia test, we plan to provide an analysis of EGFR/HER1, HER2, HER3, c-MET, and PI3K-node involved

signaling activity for each patient tumor specimen received.

completed development of our first CELsignia test for ovarian cancer in 2020.

This test identifies a new sub-group of ovarian cancer

patients with tumors that have abnormal c-Met and HER2 signaling activity.

These findings suggest that a significant sub-group of ovarian

cancer patients may respond to treatment with a combination of ErbB and c-Met inhibitors.

Nearly 14,000 women a year die from ovarian

cancer, a disease that has less than a 50% five-year survival rate and a limited range of targeted therapy options.

There is thus a significant

unmet need for additional therapeutic options for ovarian cancer patients.

As a companion diagnostic, our CELsignia test for ovarian

cancer will be intended to help pharmaceutical companies obtain new drug indications and expand treatment options for this challenging

We are currently in discussions with pharmaceutical companies about collaborating on future clinical trials.

addition to our CELsignia tests for HER2-negative breast cancer and ovarian cancer, we expect to develop CELsignia tests to diagnose

eight new potential cancer sub-types we have discovered in lung, ovarian, kidney, and bladder cancers.

Approved or investigational drugs

are currently available to treat these new potential cancer sub-types.

We expect to launch these additional tests on a staggered basis

over the next few years while continuing our research to identify additional new cancer sub-types.

overall commercialization strategy is to develop diagnostics that expand the patient population eligible for targeted therapies.

In furtherance

of this strategy, we will seek collaborations with pharmaceutical companies to field clinical trials to advance the clinical development

of their targeted therapies with the eventual goal of obtaining FDA approval of a new drug indication.

Collaborations are expected to

involve initially Phase I or Phase II interventional clinical trials to evaluate the efficacy of our collaboration partners’ targeted

therapies on patients selected with one of our CELsignia tests.

These trials would not be intended to separately evaluate the CELsignia

tests, whether as standalone tests or companion diagnostics.

While FDA approval or clearance is not currently required for CELsignia

tests offered as a stand-alone laboratory developed test, if we are partnered with a drug company to launch a CELsignia test as a companion

diagnostic for a new drug indication, we would be required to obtain premarket approval, or PMA, in conjunction with the pharmaceutical

company seeking a new drug approval for the matching therapy.

are currently collaborating on six Phase II clinical trials to evaluate the efficacy of our collaboration partners’ targeted therapies

in patients selected with one of our CELsignia tests.

The goal of these trials is to support the development of six potential new drug

indications to treat patient groups found responsive by our CELsignia test to their approved targeted therapies.

These clinical trials

FACT-1 Clinical Trial to

Evaluate Efficacy of Genentech’s HER2 Targeted Therapies.

We are collaborating with NSABP Foundation, Inc.

and Genentech, Inc.

(“Genentech”) to evaluate the efficacy and safety of Genentech’s drugs, Herceptin (trastuzumab)

and Perjeta (pertuzumab), and chemotherapy in breast cancer patients selected with our CELsignia test.

Based on NSABP’s updated

estimates of patient enrollment rates to reflect the impact of COVID-19 and the impact in the third quarter of hospitalizations associated

with the SARS-CoV-2 Delta variant, interim results are expected to be available in the second half of 2022 and final results

approximately nine months later.

The goal is to demonstrate that patients who have an abnormal HER2 signaling pathway, as identified

by our CELsignia test, respond to treatment with a matching targeted therapy.

FACT-2 Clinical Trial to

Evaluate Efficacy of Puma’s HER2 Targeted Therapy.

We are collaborating with Puma Biotechnology, Inc.

West Cancer Center to conduct a Phase II single-arm interventional trial to evaluate the efficacy and safety of Puma’s drug,

Nerlynx (neratinib), and chemotherapy in breast cancer patients selected with our CELsignia test.

Based on West Cancer

Center’s updated estimates of patient enrollment rates to reflect the impact of COVID-19 and the impact in the third quarter

of hospitalizations associated with the SARS-CoV-2 Delta variant, interim results are expected to be available in the second half

of 2022 and final results approximately nine months later.

The goal of the trial is to demonstrate that triple-negative breast

cancer patients who have a hyperactive HER2 signaling tumor, as identified by the CELsignia test, respond to treatment with Nerlynx,

a matching HER2 therapy.

FACT-3 Clinical Trial to Evaluate Efficacy of Pfizer’s

pan-HER and c-Met Targeted Therapies.

In January 2021, we announced a clinical trial collaboration with Sarah Cannon Research Institute

and Pfizer to conduct a Phase II clinical trial.

This open-label Phase II trial will evaluate the efficacy and safety of two Pfizer targeted

therapies, Vizimpro (dacomitinib), a pan-HER inhibitor, and Xalkori (crizotinib), a c-Met inhibitor, in previously treated metastatic

HER2-negative breast cancer patients selected with our CELsignia MP Test.

Based on the Sarah Cannon Research Institute’s estimates

of patient enrollment rates, interim results are expected 12-15 months after the protocol is activated and final results 12-15 months

The goal of the trial is to demonstrate that previously treated HER2-negative metastatic breast cancer patients who have hyperactive

HER2 and c-Met signaling tumors, as identified by the CELsignia test, respond to treatment with Vizimpro in combination with Xalkori.

FACT-4 Clinical Trial to Evaluate Efficacy of Puma’s

HER2 Targeted Therapy.

In December 2020, we announced a clinical trial collaboration with Massachusetts General Hospital and Puma, a

biopharmaceutical company, to conduct a Phase II clinical trial.

This open-label Phase II trial will evaluate the efficacy and safety

of Puma’s drug, Nerlynx (neratinib), and Faslodex (fulvestrant), an AstraZeneca drug, in previously treated metastatic HR-positive

(HR+), HER2-negative breast cancer patients selected with our CELsignia HER2 Pathway Activity Test.

Based on Massachusetts General Hospital’s

estimates of patient enrollment rates, we expect to obtain interim results 12-15 months after the protocol is activated and final results

12 to 15 months later.

The goal of the trial is to demonstrate that previously treated HR+, HER2-negative metastatic breast cancer patients

who have hyperactive HER2 signaling tumors, as identified by the CELsignia test, respond to treatment with Nerlynx in combination with

Faslodex, a hormonal therapy that targets the estrogen receptor.

FACT-5 Clinical Trial to

Evaluate Efficacy of Puma’s pan-HER Inhibitor and chemotherapy.

In October 2021, we announced a clinical trial collaboration

with University of Rochester Wilmot Cancer Center and Puma, to conduct a Phase II clinical trial.

This open-label Phase II trial will

evaluate the efficacy and safety of Puma’s drug, Nerlynx (neratinib), and the chemotherapy capecitabine, in previously treated

metastatic HER2-negative breast cancer patients with brain metastases selected with our CELsignia HER2 Pathway Activity Test.

on University of Rochester Wilmot Cancer Center estimates of patient enrollment rates, we expect to obtain interim results 12-15 months

after the protocol is activated and the final results 12 to 15 months later.

We expect enrollment to begin by mid-2022.

goal of the trial is to demonstrate that previously treated HER2-negative metastatic breast cancer patients with brain metastases who

have hyperactive HER2 signaling tumors, as identified by the CELsignia test, respond to treatment with Nerlynx in combination with

capecitabine.

FACT-6 Clinical Trial to Evaluate Efficacy of Novartis’s

c-Met Inhibitor and Puma’s pan-HER Inhibitor.

In March 2021, we announced a clinical trial collaboration with MD Anderson, Novartis

AG, and Puma, to conduct a Phase I/II clinical trial.

This open-label Phase I/II trial will evaluate the efficacy and safety of Novartis’

c-Met inhibitor, Tabrecta (capmatinib), and Puma’s pan-HER inhibitor, Nerlynx (neratinib), in previously treated metastatic HER2-negative

breast cancer patients selected with our CELsignia MP Test.

Based on MD Anderson’s estimates of patient enrollment rates, we expect

to obtain interim results 12-15 months after the protocol is activated and final results 12-15 months later.

The goal of the trial is

to demonstrate that previously treated HER2-negative metastatic breast cancer patients who have hyperactive HER2 and c-Met signaling

tumors, as identified by the CELsignia test, respond to treatment with Tabrecta in combination with Nerlynx.

the development of a potential first-in-class targeted therapy for breast cancer, like gedatolisib, with our CELsignia platform is a

natural extension of our strategy to use our CELsignia CDx to enable new indications for other companies’ targeted therapies.

combining companion diagnostics designed to enable proprietary new drug indications with targeted therapies that treat signaling dysregulation

our CDx identifies, we believe we are uniquely positioned to improve the standard-of-care for many early and late-stage breast cancer

Our goal is to play a key role in the multiple treatment approaches required to treat breast cancer patients at various stages

of their disease.

With each program, we are:

the proprietary insights CELsignia provides into live patient tumor cell function

a CELsignia CDx to identify new patients likely to respond to the paired targeted therapy

a new targeted therapeutic option for breast cancer patients

the probability of getting regulatory approval to market the targeted therapy indication

May 15, 2022, the Company entered into a securities purchase agreement with certain institutional and other accredited investors for

the sale of Company common stock, preferred stock that may be convertible into common stock and warrants initially exercisable for preferred

stock for $100 million in the aggregate, before deducting placement agent fees and other offering expenses.

Pursuant to the securities

purchase agreement, investors will purchase shares of common stock and preferred stock at a price per share of $5.75 (on an as converted

to common stock basis).

For each share of common stock and each 1/10 of a share of preferred stock purchased, investors will receive

a warrant initially exercisable for preferred stock equivalent to 0.40 shares of common stock on an as converted basis.

price of the warrants will be at a 40% premium to the price paid by investors for the initial shares of common stock purchased in the

private placement.

The preferred stock will be convertible into common stock at the holder’s election, subject to certain limitations

such as beneficial ownership and the approval by the Company’s stockholders to increase the number of authorized shares of common

stock sufficient to cover the shares of common stock issuable upon conversion of (i) the preferred stock purchased in the private placement

and (ii) the shares of preferred stock that may be issued upon exercise of warrants purchased in the private placement.

are initially exercisable for preferred stock and will convert into warrants to purchase common stock if the proposed increase in the

Company’s authorized common stock is approved by stockholders.

The closing of the private placement is conditioned on, among other

customary items, the first patient enrolled in the Company’s forthcoming Phase 3 clinical study (VIKTORIA-1) having received their

first dose of treatment at a clinical site located in the United States, provided that such date must occur on or before December 31,

The Company also entered into a customary registration rights agreement with the investors pursuant to which it agreed to file

a registration statement with the SEC registering the resale of (i) the shares of common stock to be issued and sold in the private placement,

(ii) the shares of common stock issuable upon conversion of the preferred stock purchased in the private placement and (iii) the shares

of common stock issuable upon conversion of the shares of preferred stock that may be issued upon exercise of warrants purchased in the

private placement.

March 2022, the company announced the design for its pivotal Phase 3 trial for gedatolisib, an investigational pan-PI3K/mTOR

The pivotal Phase 3 clinical trial, which is named VIKTORIA-1, will be an open-label, randomized study to evaluate the

safety and efficacy of gedatolisib in combination with fulvestrant with or without palbociclib in adults with HR+/HER2- advanced

breast cancer whose disease progressed while receiving prior CDK4/6 therapy.

February 4, 2022, the Company entered into an Open Market Sale Agreement SM with Jefferies LLC, as agent (“Jefferies”),

pursuant to which we may offer and sell, from time to time, through Jefferies, shares of our common stock having an aggregate offering

price of up to $50,000,000.

We will pay Jefferies a commission equal to 3.0% of the aggregate gross proceeds from each sale of such shares.

To date, we have not yet made any sales under this arrangement.

January 13, 2022, gedatolisib was granted Fast Track designation for the treatment of patients with ER+/HER2- metastatic breast cancer

after progression on CDK4/6 therapy.

Fast Track designation is granted by the FDA for products that are intended for the treatment of

serious or life-threatening disease or conditions and which demonstrate the potential to address an unmet medical need.

The designation

offers the opportunity for frequent interactions with the FDA to discuss the drug’s development plan and to ensure collection of

appropriate data needed to support drug approval, as well as eligibility for rolling submission of a New Drug Application.

of COVID-19 on our Business

help protect the health and safety of our employees, suppliers and collaborators, we took proactive, aggressive action from the earliest

signs of the outbreak.

We enacted rigorous safety measures in our laboratory and administrative offices, including implementing social

distancing protocols, allowing working from home for those employees that do not need to be physically present in a lab to perform their

work, suspending travel, implementing temperature checks at the entrances to our facilities, extensively and frequently disinfecting

our workspaces and providing masks to those employees who must be physically present.

We expect to continue with these measures until

the COVID-19 pandemic is better contained and we may take further actions as government authorities require or recommend or as we determine

to be in the best interests of our employees, suppliers, and collaborators.

Trials and Collaborations

a result of the COVID-19 pandemic, governmental authorities implemented numerous and constantly evolving measures to try to contain the

virus, such as travel bans and restrictions, limits on gatherings, quarantines, shelter-in-place orders, and business shutdowns.

many of these measures have been relaxed in recent months, new variants of the coronavirus, such as the delta variant, appear likely

to cause new or former protective measures to be reconsidered.

As we continue to advance our clinical trial collaborations, we are in

close contact with our current clinical sponsors, and principal investigators, as well as prospective pharmaceutical company and clinical

collaborators, to assess the impact of COVID-19 on our trial enrollment timelines and collaboration discussions.

Based on delays in the

enrollment of patients in our ongoing clinical trials due to the increased hospitalizations associated with the SARS-CoV-2 Delta variant,

we now expect interim results from the FACT-1 and FACT-2 trials to be delayed until the second half of 2022 and final results

approximately nine months later.

As the impact of COVID-19 on our industry becomes clearer, we may need to reassess the timing of our

anticipated clinical milestones.

Prospective clinical trial collaborations with pharmaceutical companies and sponsors may also be delayed

but the impact on the timing of finalizing agreements is not yet known.

and Development

our facility currently remains operational, the evolving measures to try to contain the virus have impacted and may further impact our

workforce and operations, as well as those of our vendors and suppliers.

Our laboratory remains operational as of this date, but, in

response to the COVID-19 pandemic, we have implemented protective policies that reduce the number of research and development staff operating

in our laboratory at any one time.

However, in light of the focus of healthcare providers and hospitals on fighting the virus, several

of the clinical sites that provide us tumor tissue for research have halted this service, reducing the number of new tumor tissue specimens

we would typically expect to receive.

These various constraints may slow or diminish our research and development activities, particularly

if the pandemic continues to experience rising infections from the delta variant of the coronavirus or otherwise.

In addition, cancer

research-related industry meetings, such as the American Association for Cancer Research (AACR), were previously delayed for several

months and could be again in the future as a result of the virus.

So far, our submissions to present research results at these meetings

have been accepted, but the release of the results have been postponed in conjunction with the delayed meeting schedules.

certain as to whether these types of delays will continue and what the impact will be on our ability to present research results in the

we have largely returned to normal operations in our facility, the COVID-19 pandemic continues and its effect on our operations and financial

condition will depend in large part on future developments which cannot be reasonably estimated at this time.

Future developments include

the duration, scope and severity of the pandemic, the emergence of new virus variants that are more contagious or harmful than prior

variants, actions taken by governmental authorities, suppliers, clinical trial sites, and other business partners to contain or mitigate

the pandemic’s impact, and the potential adverse effects on the suppliers, labor market and general economic activity.

we continue to advance our clinical trial collaborations, we remain in close contact with our current clinical sponsors, and principal

investigators, as well as prospective pharmaceutical company and clinical collaborators, to monitor the impact of COVID-19 on our trial

enrollment timelines and collaboration discussions.

We experienced delays in the enrollment of patients in our ongoing clinical trials

and now expect interim results from the FACT-1 and FACT-2 trials to be delayed until the first half of 2023 and final results approximately

nine months later.

We could experience further delays in clinical trials and collaborations with pharmaceutical companies and sponsors

if new variants emerge or if the spread of COVID-19 once again accelerates.

Due to the inherent uncertainty associated with the COVID-19

pandemic, we are unable to predict the impact the pandemic may have on our clinical trial work and overall financial condition.

of Operations

2 unchanged sentences

As a result, we are not and have never been profitable and have incurred losses in each period since our inception

For the three months ended September 30, 2021 and 2020, we reported a net loss of approximately $6.0 million and $2.5 million,

respectively, and for the nine months ended September 30, 2021 and 2020, we reported a net loss of approximately $22.9 million and $6.9

million, respectively.

As of September 30, 2021, we had an accumulated deficit of approximately $49.2 million.

As of September

30, 2021, we had cash and cash equivalents of approximately $90.4 million.

For the three months ended March 31, 2022 and 2021, we reported a net loss of approximately $7.9 million and $2.8 million, respectively.

As of March 31, 2022, we had an accumulated deficit of approximately $63.9 million.

As of March 31, 2022, we had cash and cash

equivalents of approximately $78.3 million.

of Operating Results

date, we have not generated any revenue.

Initially, our ability to generate revenue will depend primarily upon our ability to obtain

partnership agreements with pharmaceutical companies to provide companion diagnostics for such pharmaceutical partners’ existing

or investigational targeted therapies.

We expect these partnerships to generate significant revenue from the sale of tests to identify

patients eligible for clinical trials, from milestone payments, and, potentially, from royalties on the incremental drug revenues our

tests enable.

Once a new drug indication is received that requires use of our companion diagnostic to identify eligible patients, we

expect to generate revenues from sales of tests to treating physicians.

With the execution of the Pfizer license agreement in April 2021,

whereby we acquired exclusive world-wide licensing rights to develop and commercialize gedatolisib, we expect to conduct clinical trials

to support potential regulatory approval to market gedatolisib.

If we obtain regulatory approvals to market gedatolisib, we expect to

generate revenue from sales of the drug for the treatment of breast cancer patients.

With the execution of the Pfizer license agreement in April 2021, whereby we acquired exclusive

world-wide licensing rights to develop and commercialize gedatolisib, we expect to conduct clinical trials to support potential regulatory

approval to market gedatolisib.

If we obtain regulatory approvals to market gedatolisib, we expect to generate revenue from sales of

the drug for the treatment of breast cancer patients.

Additionally, we will seek to generate revenue from partnership agreements with

pharmaceutical companies to provide companion diagnostics for such pharmaceutical partners’ existing or investigational targeted

If a new drug indication is received that requires use of our companion diagnostic to identify eligible patients, we expect

to generate revenues from sales of tests to treating physicians.

and Development

4 unchanged sentences

Research and development expenses primarily include:

employee-related expenses related to our research and development activities, including salaries, benefits, recruiting, travel and stock-based compensation expenses;

laboratory supplies;

consulting fees paid to third parties;

clinical trial costs;

facilities expenses;

legal costs associated with patent applications.

employee-related

expenses related to our research and development activities, including salaries, benefits, recruiting, travel and stock-based compensation

fees paid to third parties;

validation costs for gedatolisib

costs associated with patent applications.

and external research and development costs are expensed as they are incurred.

19 unchanged sentences

of Operations

Three Months Ended

September 30,

Increase (Decrease)

Statements of Operations Data:

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

Other income (expense)

Interest expense

Interest income

Loss on sale of fixed assets

Other income (expense), net

Net loss before income taxes

Income tax benefits

$ (6,027,246 )

$ (2,474,298 )

$ (3,552,948 )

Nine Months Ended

September 30,

Increase (Decrease)

Percent Change

Statements of Operations Data:

of the Three Months Ended March 31, 2022 and 2021

of Operations Data:

and development

and administrative

operating expenses

Research and development

General and administrative

Total operating expenses

Loss from operations

(22,035,023 )

(15,030,195 )

Other income (expense)

Interest expense

Interest income

Gain on sale of fixed assets

Other income (expense), net

Net loss before income taxes

(22,851,766 )

(15,928,484 )

Income tax benefits

from operations

income (expense)

on sale of fixed assets

income (expense), net

loss before income taxes

$ (7,934,447 )

2 unchanged sentences

and Development

research and development expenses for the three months ended September 30, 2021 were approximately $5.0 million, representing an increase

of approximately $3.0 million, or 153%, compared to the same period in 2020.

The increase of $3.0 million primarily resulted from expenses

related to the development of gedatolisib.

Employee related expenses, including consulting fees, accounted for $1.1 million of

the increase.

The increase of $1.1 million also included an increase of $0.2 million in non-cash stock-based compensation.

remaining increase of $1.9 million is related to clinical trials, patent legal fees and costs associated with the transfer

of the gedatolisib-related activities from Pfizer to Celcuity.

research and development expenses for the nine months ended September 30, 2021 were approximately $20.3 million, representing an increase

of approximately $14.7 million, or 263%, compared to the same period in 2020.

The increase primarily resulted from a $10.0 million upfront

license fee related to the execution of the Pfizer license agreement, which included $5.0 million of non-cash expense for the issuance

of common stock.

The remaining $4.7 million increase primarily resulted from expenses related to the development of gedatolisib.

Employee related expenses, including consulting fees, accounted for a $1.8 million increase.

The increase of $1.8 million also included

an increase of $0.2 million in non-cash stock-based compensation.

The remaining increase of $2.9 million is related to clinical trials,

patent legal fees and costs associated with the transfer of the gedatolisib-related activities from Pfizer to Celcuity.

research and development expenses for the three months ended March 31, 2022 were approximately $6.7 million, representing an

increase of approximately $4.5 million, or 199%, compared to the same period in 2021.

The increase of $4.5 million primarily

resulted from expenses related to the development of gedatolisib.

Employee related expenses, including consulting fees, accounted

for $1.6 million of the $4.5 million increase.

The increase of $1.6 million also included an increase of $0.2 million in non-cash

stock-based compensation.

The remaining increase of $2.9 million of the $4.5 million is related to costs for existing clinical

trials and for activies supporting the initiation of the VIKTORIA-1 pivotal trial.

a significant amount of research and development is central to our business model.

5 unchanged sentences

and Administrative

general and administrative expenses for the three months ended September 30, 2021 were approximately $0.6 million, representing an increase

of approximately $0.1 million, or 24%, compared to the same period in 2020.

The increase primarily resulted from a $0.1 million increase

in non-cash stock-based compensation.

general and administrative expenses for the nine months ended September 30, 2021 were approximately $1.8 million, representing an increase

general and administrative expenses for the three months ended March 31, 2022 were approximately $0.8 million, representing an increase

of approximately $0.3 million, or 46%, compared to the same period in 2021.

The increase primarily resulted from a $0.1 million increase

in non-cash stock-based compensation.

In addition, other general and administrative expenses increased $0.2 million due to professional

fees associated with being a public company and director and officer insurance.

Employee related expenses accounted for $0.2 million of the

$0.3 million increase, including approximately $0.1 million in non-cash stock-based compensation.

The remaining $0.1 million of the $0.3

million increase resulted from director and officer insurance and other professional fees associated with being a public company.

anticipate that our general and administrative expenses will increase in future periods, reflecting both increased costs in connection

with the potential future commercialization of CELsignia tests and gedatolisib, an expanding infrastructure, and increased professional

with the potential future commercialization of gedatolisib and CELsignia tests, an expanding infrastructure, and increased professional

fees associated with being a public company.

expense for the three months ended September 30, 2021 was $0.4 million and represents an increase of $0.4 million compared to the same

periods in 2020.

For the nine months ended September 30, 2021, interest expense was $0.8 million and represents an increase of $0.8 million

compared to the same period in 2020.

The increase is due to the loan agreement that was executed in April 2021 and includes $0.2 million

and $0.4 million of non-cash interest expense for the three- and nine-month periods ended September 30, 2021, respectively.

income for the three months ended September 30, 2021 was flat compared to the same period in 2020.

Interest income for the nine months

ended September 30, 2021 represents a decrease of approximately $0.1 million compared to the same period in 2020.

This decrease was primarily

the result of lower market interest rates.

expense for the three months ended March 31, 2022 was $0.4 million and represents an increase of $0.4 million compared to the same period

The increase is due to the loan agreement that was executed in April 2021 and includes $0.2 million of non-cash interest expense.

income for the three months ended March 31, 2022 was slightly higher compared to the same period in 2021.

The increase was primarily

due to marginally higher market interest rates.

and Capital Resources

our inception, we have incurred losses and cumulative negative cash flows from operations.

Through September 30, 2021, we have raised

capital of approximately $13.7 million and $7.5 million through private placements of common equity and unsecured convertible notes,

respectively.

Through March 31, 2022, we have raised capital

of approximately $13.7 million and $7.5 million through private placements of common equity and unsecured convertible notes, respectively.

On September 22, 2017, we closed on the initial public offering of our common stock, which generated approximately $ 23.3

million of additional cash after taking into account underwriting discounts and commissions and offering expenses.

On June 5, 2020, we

entered into an At Market Issuance Sales Agreement with B.

2020, we entered into an At Market Issuance Sales Agreement with B.

Riley, FBR, Inc (the “ATM Agreement”).

The ATM Agreement allowed

us to sell shares of common stock up to an aggregate offering price of $10.0 million.

Through September 30, 2021, we generated approximately

The ATM Agreement

allowed us to sell shares of common stock up to an aggregate offering price of $10.0 million.

Through March 31, 2022, we generated approximately

$0.1 million of additional cash through sales pursuant to the ATM Agreement, after taking into account commissions and offering expenses.

9 unchanged sentences

to achieve certain milestones.

On July 1, 2021, we completed a follow-on offering of our common stock, which generated approximately

$52.8 million of additional cash after taking into account underwriting discounts of approximately $3.4 million and offering expenses

of approximately $0.1 million.

from these capital raising activities has been our primary source of funds for our operations since inception.

As of September 30, 2021,

The Company is no longer eligible to draw on the term B loan.

On July 1, 2021, we completed a follow-on

offering of our common stock, which generated approximately $52.8 million of additional cash after taking into account underwriting discounts

of approximately $3.4 million and offering expenses of approximately $0.1 million.

February 4, 2022, we entered into an Open Market Sale AgreementSM with Jefferies LLC, as agent, pursuant to which we may offer and sell,

from time to time, through Jefferies, shares of our common stock having an aggregate offering price of up to $50,000,000.

have not yet made any sales under this arrangement.

May 15, 2022, we entered into a securities purchase agreement with certain institutional and other accredited investors

for the sale of Company common stock, preferred stock that may be convertible into common stock and warrants initially exercisable

for preferred stock for $100 million in the aggregate, before deducting placement agent fees and other offering expenses.

to the securities purchase agreement, investors will purchase shares of common stock and preferred stock at a price per share of

$5.75 (on an as converted to common stock basis), with the closing (funding) of such purchase to occur following the achievement of a milestone

in our forthcoming Phase 3 study (VIKTORIA-1).

The sale of shares of common stock includes forty percent (40%) warrant coverage

and customary resale registration rights.

Please see “Management’s Discussion and Analysis of Financial Condition and Results

of Operations—Recent Developments” above for additional details.

from our historical capital raising activities has been our primary source of funds for our operations since inception.

As of March 31,

2022, our cash and cash equivalents were approximately $78.3 million, and we had an accumulated deficit of approximately $63.9 million.

expect that our research and development and general and administrative expenses will increase as we continue to develop gedatolisib,

our CELsignia platform and additional CELsignia tests, conduct research related to the discovery of new cancer sub-types, conduct clinical

trials, and pursue other business development activities.

We would also expect to incur sales and marketing expenses as we commercialize

our CELsignia tests and gedatolisib.

We expect to use cash on hand to fund our research and development expenses, capital expenditures,

working capital, sales and marketing expenses, and general corporate expenses, as well as for the increased costs associated with being

a public company.

conduct research related to the discovery of new cancer sub-types, conduct clinical trials, and pursue other business development activities.

We would also expect to incur sales and marketing expenses as we commercialize gedatolisib and our CELsignia tests.

We expect to use

cash on hand, together with the funds to be received under the Securities Purchase Agreement described above, to fund our research and

development expenses, clinical trial costs, capital expenditures, working capital, sales and marketing expenses, and general corporate

on our current business plan, we believe that our current cash on hand will provide sufficient cash to finance operations and pay obligations

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Additional capital may not be available on reasonable terms,

Nine Months Ended

September 30,

Net cash provided by (used in):

Operating activities

following table sets forth the primary sources and uses of cash for the three months ended March 31:

cash provided by (used in):

$ (5,933,032 )

$ (2,521,505 )

Investing activities

Financing activities

Net increase (decrease) in cash and cash equivalents

increase (decrease) in cash and cash equivalents

$ (5,990,955 )

cash used in operating activities was approximately $14.2 million for the nine months ended September 30, 2021 and consisted primarily

of a net loss of approximately $22.9 million, offset by non-cash expense items of approximately $7.3 million and working capital

changes of $1.4 million.

Non-cash expense items of approximately $7.3 million primarily consisted of $5.0 million for issuance of common

stock related to a license agreement, $1.7 million of stock-based compensation expense, non-cash interest expense of $0.4 million and

depreciation expense of $0.2 million.

The approximately $1.4 million of working capital changes was primarily due to an increase in accounts

The net cash used in operating activities was approximately $5.0 million for the nine months ended September 30, 2020 and consisted

primarily of a net loss of approximately $6.9 million, adjusted for working capital changes of approximately $0.3 million and

non-cash expense items of approximately $1.6 million.

Non-cash expense items of approximately $1.6 million primarily consisted of $1.3

million of stock-based compensation expense and depreciation expense of $0.3 million.

cash used in investing activities for the nine months ended September 30, 2021 and 2020 were flat at approximately $0.1 million consisting

of purchases of property and equipment.

cash provided by financing activities for the nine months ended September 30, 2021 was approximately $93.0 million.

The $93.0 million

primarily consisted of net proceeds from the sale of shares of our common stock through two follow-on offerings totaling $78.5 million

and $14.4 million from net proceeds related to the closing of a loan agreement.

The remaining $0.1 million was the result of proceeds

from the exercise of common stock warrants and employee stock options and proceeds from employee stock purchases.

The net cash provided

by financing activities for the nine months ended September 30, 2020 was approximately $0.1 million and primarily reflects net proceeds

from the sale of shares of our common stock through the ATM Agreement and employee stock purchases.

cash used in operating activities was approximately $5.9 million for the three months ended March 31, 2022 and consisted primarily of

a net loss of approximately $7.9 million, offset by non-cash expense items of approximately $1.0 million and working capital changes

of $1.0 million.

Non-cash expense items of approximately $1.0 million primarily consisted of $0.7 million of stock-based compensation

expense, non-cash interest expense of $0.2 million and depreciation expense of $0.1 million.

The approximately $1.0 million of working

capital changes was primarily due to an increase in accounts payable and accrued expenses.

The net cash used in operating activities

was approximately $2.5 million for the three months ended March 31, 2021 and consisted primarily of a net loss of approximately

$2.8 million and working capital changes of approximately $0.3 million, adjusted for non-cash expense items of approximately $0.6 million.

Non-cash expense items of approximately $0.6 million primarily consisted of $0.5 million of stock-based compensation expense and depreciation

expense of $0.1 million.

The approximately $0.3 million of working capital changes was primarily due to an increase in prepaid assets

and a decrease in accrued expenses.

cash used in investing activities for the three months ended March 31, 2022 and 2021 were minimal and consisted of purchases of property

and equipment.

cash used in financing activities for the three months ended March 31, 2022 was minimal and primarily consisted of payments for secondary

registration statement costs.

The net cash provided by financing activities for the three months ended March 31, 2021 was approximately

$25.9 million and primarily reflects net proceeds from the sale of shares of our common stock through a follow-on offering.

Accounting Pronouncements

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(vi) the future payments that may

be owned to Pfizer under the license agreement;

(vii) our expectations regarding partnering with pharmaceutical companies and other third

be owed to Pfizer under the license agreement;

(vii) our expectations regarding partnering with pharmaceutical companies and other

third parties;

(viii) our expectations regarding revenue from sales of CELsignia tests and revenue from milestone or other payment sources;

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as well as the increased costs associated with being a public company;

and (xiii) our expectations regarding the impact that the COVID-19

pandemic and related economic effects will have on our business and results of operations.

(xiii) our plans with respect to potentially raising capital;

and (xiv) our expectations regarding the impact that the COVID-19 pandemic and related economic effects will have on our business

and results of operations.

some cases, you can identify forward-looking statements by the following words:

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Certain risks, uncertainties and other factors include, but are not limited to, our limited operating history;

the unknown impact of the COVID-19 pandemic on our business;

the potential impact of the COVID-19 pandemic on our business;

our initial success being heavily dependent on the success of our CELsignia

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uncertainty with insurance coverage and reimbursement for our CELsignia tests;

difficulties we may face in managing growth,

such as hiring and retaining a qualified sales force and attracting and retaining key personnel;

changes in government regulations;

obtaining and maintaining intellectual property protection for our technology and time and expense associated with defending third-party

claims of intellectual property infringement, investigations or litigation threatened or initiated against us.

These and additional risks,

uncertainties and other factors are described more fully in our Annual Report on Form 10-K for the year ended December 31, 2020 and in

Exhibit 99.4 to our Current Report on Form 8-K, filed with the SEC on April 8, 2021 and elsewhere in this Quarterly Report.

filings made with the SEC are available through the SEC’s electronic data gathering analysis and retrieval system (EDGAR) at www.sec.gov.

we may face in managing growth, such as hiring and retaining a qualified sales force and attracting and retaining key personnel;

in government regulations;

and obtaining and maintaining intellectual property protection for our technology and time and expense associated

with defending third-party claims of intellectual property infringement, investigations or litigation threatened or initiated against

These and additional risks, uncertainties and other factors are described more fully in our Annual Report on Form 10-K for

the year ended December 31, 2021 and elsewhere in this Quarterly Report.

Copies of filings made with the SEC are available through the

SEC’s electronic data gathering analysis and retrieval system (EDGAR) at www.sec.gov.

should read the cautionary statements made in this Quarterly Report as being applicable to all related forward-looking statements wherever

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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