What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-08-11 compared with 2023-05-15 · 161 added, 118 removed, 391 unchanged (42% of the section changed)

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financial statements and the related notes appearing under Item 1 of Part I of this Quarterly Report on Form 10-Q (this “Quarterly

Some of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, including

information with respect to our plans and strategy for our business and expected financial results, includes forward-looking statements

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, 2022, filed with the SEC on March 23, 2023 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.

This Quarterly Report, including the following discussion and analysis, contains forward-looking statements that involve

risks and uncertainties and speak only as of the date of this report.

Forward-looking information is included in our discussion of our

plans and strategy for our business and expected financial results.

You should review the “Risk Factors” discussed in our

Annual Report on Form 10-K for the year ended December 31, 2022, filed with the SEC on March 23, 2023, and the information contained

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 forward-looking statements.

is a clinical-stage biotechnology company focused on the development of targeted therapies for treatment of multiple solid tumor indications.

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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.

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 isoforms

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discontinued treatment.

of March 31, 2023, 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.

The remaining 363 patients received gedatolisib

in combination with other anti-cancer agents in five clinical trials.

Additional patients received gedatolisib in combination with other

anti-cancer agents in nine investigator sponsored clinical trials.

of June 30, 2023, 492 patients with solid tumors have received gedatolisib in eight clinical trials sponsored by Pfizer.

Of the 492 patients,

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

The remaining 363 patients received gedatolisib in combination

with other anti-cancer agents in five clinical trials.

Additional patients received gedatolisib in combination with other anti-cancer

agents in nine investigator sponsored clinical trials.

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

138 patients.

Seven patients from this study continue to receive study treatment, as of March 31, 2023, each of whom have received study

Seven patients from this study continue to receive study treatment, as of June 30, 2023, each of whom have received study

treatment for more than four years.

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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%.

As of the data cut-off date, December 12, 2022, for Expansion Arm

A, median progression free survival (mPFS) was 48.6 months.

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 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).

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

PIK3CA MT patients.

As of the data cut-off date, March 16, 2023, for treatment- naïve patients in Escalation Arm A and

Expansion Arm A (n=41), median progression free survival (mPFS) was 48.6 months, median duration of response (mDOR) was 46.9 months,

and ORR was 79%.

This data compares favorably to published data for current first-line standard-of-care treatments for patients with

HR+/HER2- advanced breast cancer.

In patients who received prior hormonal therapy

alone or in combination with a CDK4/6 inhibitor (Arms B, C, and D), ORR ranged from 36% 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

For all enrolled patients, a clinical benefit rate (CBR) of ≥79% was observed.

Median progression-free survival (PFS) was 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

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

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our April 2021 license agreement with Pfizer to research, develop, manufacture and commercialize gedatolisib, we paid a $5.0 million

upfront fee and granted to Pfizer $5.0 million shares of Company common stock, which fee and grant were effected and expensed to research & development in full for the quarter in which we signed the license agreement.

upfront fee and granted to Pfizer $5.0 million shares of Company common stock, which fee and grant were effected and expensed to research

& development in full for the quarter in which we signed the license agreement.

In addition, we are also required to make milestone

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of all regulatory or data exclusivity in such country for such product or (c) the date upon which the manufacture, use, sale, offer for

sale or importation of such product in such country would no longer infringe, but for the license granted in the license agreement, a

valid claim of a licensed patent right.

sale or importation of such product in such country would no longer infringe, but for the license granted in the license agreement, on

a valid claim of a licensed patent right.

Company has the right to terminate the license agreement for convenience upon 90 days’ prior written notice.

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in the event of specified insolvency events involving the other party.

May 2023, updated data from the Company’s Phase 1b study in treatment naïve patients with HR+, HER2- advanced breast

cancer was presented at the European Society for Medical Oncology (ESMO) Breast Cancer Annual Congress.

These patients, from

Expansion Arm A and Escalation Arm A of the clinical trial, were treated with gedatolisib in combination with palbociclib and

As of a database update on March 16, 2023, median progression free survival (mPFS) in treatment naïve patients in

Expansion Arm A was 48.6 months (n=30) and Escalation Arm A was 45.8 months (n=11).

When treatment naïve patients from both

Escalation Arm A and Expansion Arm A arms are combined (N=41), mPFS was 48.6 months and mDOR was 46.9 months.

These results compare

favorably to published data with other therapies in this setting.

April 2023, Celcuity presented a poster at the American Association for Cancer Research (AACR) Annual Meeting 2023 highlighting preclinical

data of gedatolisib’s superior anti-proliferative potency and efficacy in endometrial, ovarian and cervical cancer cell lines compared

to the other PI3K, AKT, and mTOR inhibitors evaluated regardless of PTEN, P13K or AKT mutational status.

February 2023, the company presented data from preclinical studies evaluating gedatolisib and other PI3K, AKT, and mTOR inhibitors in

prostate cancer cell lines at the American Society of Clinical Oncology Genitourinary Cancers Symposium.

The presentation demonstrated

gedatolisib’s superior potency and efficacy across different prostate cancer cell lines relative to the other PI3K, AKT, and mTOR

inhibitors evaluated regardless of PTEN or PI3K mutational status.

May 2023, updated results from a Phase 1b trial evaluating gedatolisib, in combination with palbociclib and the aromatase inhibitor,

letrozole, were presented at the 2023 European Society for Medical Oncology (ESMO) Breast Cancer Annual Congress, with data updated

as of March 16, 2023.

For treatment-naïve patients from Escalation Arm A and Expansion Arm A (n=41), mPFS was 48.6 months, mDOR was

46.9 months, and the ORR was 79%.

This data compares favorably to published data for current first-line standard-of-care treatments

for patients with HR+/HER2- advanced breast cancer.

April 2023, Celcuity presented a poster at the American Association for Cancer Research (AACR) Annual Meeting demonstrating gedatolisib’s

superior therapeutic activity relative to the various PI3K, AKT, and mTOR inhibitors, regardless of the cell lines’ PTEN, PI3K,

or AKT mutational status in endometrial, ovarian and cervical cancer cell lines.

of COVID-19 on our Business

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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 March 31, 2023 and 2022, we reported a net loss of approximately $11.9 million and $7.9 million,

For the three months ended June 30, 2023 and 2022, we reported a net loss of approximately $14.6 million and $10.0 million,

respectively, and for the six months ended June 30, 2023 and 2022, we reported a net loss of approximately $26.5 million and $17.9 million,

respectively.

As of March 31, 2023, we had an accumulated deficit of approximately $108.2 million.

As of March 31, 2023, we had

As of June 30, 2023, we had an accumulated deficit of approximately $122.8 million.

As of June 30, 2023, we had

cash and cash equivalents and short-term investments of approximately $146.2 million.

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and Development

our inception, we have primarily focused on research and development of gedatolisib, a PI3K/mTOR targeted therapy and our CELsignia platform

and corresponding tests.

our inception, we have primarily focused on research and development of gedatolisib, a PI3K/mTOR targeted therapy, and our CELsignia

platform and corresponding tests.

Research and development expenses primarily include:

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and operation of our sales and distribution network and marketing related costs.

expense is primarily due to a Loan Agreement and finance lease obligations.

income consists of interest income earned on our cash, cash equivalents, and investment balances.

expense is primarily due to a Loan Agreement.

income consists of interest income earned on our cash equivalents and investment balances.

of Operations

of the Three Months Ended March 31, 2023 and 2022

of the Three Months Ended June 30, 2023 and 2022

Three Months Ended

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$ (4,627,161 )

of the Six Months Ended June 30, 2023 and 2022

Six Months Ended

Increase (Decrease)

Percent Change

Statements of Operations Data:

Operating expenses:

Research and development

General and administrative

Total operating expenses

Loss from operations

(27,603,022 )

(17,108,332 )

(10,494,690 )

Other income (expense)

Interest expense

Interest income

Other income (expense), net

Net loss before income taxes

(26,526,104 )

(17,894,973 )

Income tax benefits

$ (26,526,104 )

$ (17,894,973 )

$ (8,631,131 )

and Development

research and development expenses for the three months ended March 31, 2023 were approximately $11.3 million, representing an increase

research and development expenses for the three months ended June 30, 2023 were approximately $13.7 million, representing an increase

of approximately $5.4 million, or 64%, compared to the same period in 2022.

Of the $5.4 million increase in research and development

expense, $0.8 million was related to increased employee and consulting expenses, of which $0.2 million was in the form of non-cash stock-based

compensation.

The remaining $3.8 million increase of research and development costs is related to costs supporting activities for the

VIKTORIA-1 pivotal trial and other existing clinical trials.

expense, $0.5 million was related to increased employee and consulting expenses.

The remaining $4.9 million increase of research and

development costs is primarily related to costs supporting activities for the VIKTORIA-1 pivotal trial.

research and development expenses for the six months ended June 30, 2023 were approximately $25.0 million, representing an increase

of approximately $10.0 million, or 66%, compared to the same period in 2022.

Of the $10.0 million increase in research and

development expenses, $1.3 million was related to increased employee and consulting expenses.

The remaining $8.7 million increase of

research and development expenses is primarily related to costs supporting activities for the VIKTORIA-1 pivotal trial.

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

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We also expect to incur increased expenses to support companion

diagnostic business development activities with pharmaceutical companies as we develop additional CELsignia tests and initiate a clinical

diagnostic business development activities with pharmaceutical companies as we develop additional CELsignia tests and manage the clinical

trial for gedatolisib.

and Administrative

general and administrative expenses for the three months ended March 31, 2023 were approximately $1.3 million, representing an increase

general and administrative expenses for the three months ended June 30, 2023 were approximately $1.3 million, representing an increase

of approximately $0.1 million, or 6%, compared to the same period in 2022.

Non-cash stock-based compensation accounted for $0.3 million

of the $0.5 million increase.

The remaining $0.2 million of the $0.5 million increase resulted from professional fees and other expenses

associated with being a public company.

The $0.1 million increase resulted from professional fees

and other expenses associated with being a public company.

general and administrative expenses for the six months ended June 30, 2023 were approximately $2.6 million, representing an increase

of approximately $0.5 million, or 26%, compared to the same period in 2022.

Employee related expenses accounted for $0.3 million of the

$0.5 million increase, including approximately $0.2 million in non-cash stock-based compensation.

The remaining $0.2 million of the increase

resulted from professional fees and other expenses 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 gedatolisib and CELsignia tests, an expanding infrastructure, and increased professional

fees associated with being a public company.

expense for the three months ended March 31, 2023 was $1.2 million and represents an increase of $0.8 million compared to the same period

fees associated with public company regulatory developments and other compliance matters.

expense for the three months ended June 30, 2023 was $1.3 million and represents an increase of $0.9 million, or 189%, compared to the

same period in 2022.

Interest expense is primarily the result of a Loan Agreement that was executed in April 2021 and amended in August

increase is due to rising interest rates and the incremental $20 million funding of Term Loan B in December 2022.

The $1.2 million of

interest expense includes $0.5 million of non-cash interest expense.

income for the three months ended March 31, 2023 increased $1.8 million compared to the same period in 2022.

The increase was primarily

the result of higher market interest rates and the closing of additional financing activities, leading to higher cash, cash equivalents

The increase is due to rising interest rates and the incremental $20 million funding of Term Loan B in December 2022.

million of interest expense includes $0.5 million of non-cash interest expense.

expense for the six months ended June 30, 2023 was $2.6 million and represents an increase of $1.7 million, or 187%, compared to the

same period in 2022.

The increase is due to rising interest rates and the incremental $20 million funding of Term Loan B in December

The $2.6 million of interest expense includes $1.0 million of non-cash interest expense.

income for the three months ended June 30, 2023 was $1.8 million and represents an increase of $1.7 million compared to the same period

The increase was primarily the result of higher market interest rates and the closing of financing activities, leading to higher

cash, cash equivalents and short-term investment balances.

income for the six months ended June 30, 2023 was $3.6 million and represents an increase of $3.5 million compared to the same period

The increase was due to higher market interest rates and the closing of financing activities, leading to higher cash, cash equivalents

and short-term investment balances.

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

Through March 31, 2023, we have funded our

Through June 30, 2023, we have funded our

operations primarily through private placements and registered offerings of our equity securities and unsecured convertible notes, and

borrowings under loan agreements.

From inception through March 31, 2023, we raised an aggregate of approximately $223.7 million of net

proceeds through sales of our securities, and as of March 31, 2023 had $35.0 million of borrowings under loan agreements.

31, 2023, our cash and cash equivalents and short-term investments were approximately $33.6 million and $123.8.0 million, respectively,

and we had an accumulated deficit of approximately $108.2 million.

From inception through June 30, 2023, we raised an aggregate of approximately $223.7 million of net

proceeds through sales of our securities, and as of June 30, 2023 had $35.0 million of borrowings under loan agreements.

As of June 30,

2023, our cash and cash equivalents and short-term investments were approximately $32.2 million and $114.0 million, respectively, and

we had an accumulated deficit of approximately $122.8 million.

On December 9, 2022, we issued 6,182,574 shares of common stock, 1,120,873 shares of Series A Preferred Stock and warrants

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offering expenses).

At March 31, 2023, $44.8 million of common stock remains available for sale under the Jefferies agreement.

At June 30, 2023, $44.8 million of common stock remains available for sale under the Jefferies agreement.

Loan Agreement.

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the Company amended the Loan Agreement with Innovatus to provide for up to $75 million in term loans.

As of March 31, 2023, term loans

As of June 30, 2023, term loans

totaling $35 million are outstanding under the Loan Agreement, including the initial Term A loan of $15 million which was funded on April

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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 expenses.

We expect to use cash on hand, which includes funds 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 expenses.

on our current business plan, we believe that our current cash, cash equivalents and short-term investments together with available borrowings

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available on reasonable terms, or not at all.

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

following table sets forth the primary sources and uses of cash for the six months ended June 30:

Net cash provided by (used in):

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$ (17,375,557 )

cash used in operating activities was approximately $12.9 million for the three months ended March 31, 2023 and consisted primarily of

a net loss of approximately $11.9 million and working capital changes of $1.0 million, offset by non-cash expense items of approximately

cash used in operating activities was approximately $22.5 million for the six months ended June 30, 2023 and consisted primarily of a

net loss of approximately $26.5 million offset by non-cash expense items of approximately $3.7 million and working capital changes

of $0.3 million.

Non-cash expense items of approximately $3.7 million primarily consisted of $2.6 million of stock-based compensation

expense, non-cash interest expense of $1.0 million, and depreciation expense of $0.1 million.

The approximately $0.3 million of working

capital changes was primarily due to approximately $0.2 million net increase in accounts payable and accrued expenses and approximately

$0.1 million decrease in other assets.

cash used in operating activities was approximately $17.2 million for the six months ended June 30, 2022 and consisted primarily of a

net loss of approximately $17.9 million and working capital changes of approximately $2.1 million, offset by non-cash expense

items of approximately $2.8 million.

The approximately $2.1 million of working capital changes was primarily due to an increase of approximately

$3.9 million in prepaid assets, partially offset by increases in accounts payable and accrued expenses of approximately $0.7 million

and $0.9 million, respectively.

Non-cash expense items of approximately $2.8 million primarily consisted of approximately $2.3 million

of stock-based compensation expense, non-cash interest expense of approximately $0.4 million and depreciation expense of approximately

$0.1 million.

Non-cash expense items of approximately $0.1 million primarily consisted of $1.3 million of stock-based compensation expense

and non-cash interest expense of $0.5 million, offset by $1.7 million of non-cash interest income.

The approximately $1.0 million of

working capital changes was primarily due to a decrease in accrued expenses.

The net 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 $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.

cash provided by investing activities for the three months ended March 31, 2023 was approximately $21.9 million and consisted primarily

cash provided by investing activities for the six months ended June 30, 2023 was approximately $30.0 million and consisted primarily

of net proceeds from maturities of short-term investments in government securities (U.S.

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government securities)

and minimal purchases of property and equipment.

Net cash used in investing for the three months ended March 31, 2022 were minimal and

consisted of purchases of property and equipment.

cash provided by financing activities for the three months ended March 31, 2023 was minimal and primarily consisted of proceeds from

the exercise of employee stock options, slightly offset by payments for secondary registration and debt issuance costs.

provided by financing activities for the three months ended March 31, 2022 was minimal and primarily consisted of payments for secondary

registration costs.

and minimal purchase of property and equipment.

Net cash used in investing for the six months ended June 30, 2022 were minimal and consisted

of purchases of property and equipment.

cash provided by financing activities for the six months ended June 30, 2023 was approximately $0.2 million and primarily consisted of

proceeds from the exercise of employee stock options and proceeds from employee stock purchases, slightly offset by payments for secondary

registration and debt issuance costs.

Net cash used in financing activities was $0.1 million for the six months ended June 30, 2022 and

consisted of payments for secondary registration costs, offset partially by proceeds from the exercise of employee stock options and

proceeds from employee stock purchases.

Accounting Pronouncements

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“anticipate,” “believe,” “continue,”

“could,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,”

“potential,” “predict,” “project,” “should,” “will,” “would,”

or the negative of these terms or other comparable terminology, although not all forward-looking statements contain these words.

Forward-looking

statements are only predictions and are not guarantees of performance.

These statements are based on our management’s beliefs and

assumptions, which in turn are based on their interpretation of currently available information.

“could,” “estimate,” “expect,” “intend,” “seek,” “may,” “ongoing,”

“plan,” “goal,” “potential,” “predict,” “project,” “should,”

“will,” “would,” or the negative of these terms or other comparable terminology, although not all forward-looking

statements contain these words.

Forward-looking statements are only predictions and are not guarantees of performance.

These statements

are based on our management’s beliefs and assumptions, which in turn are based on their interpretation of currently available information.

statements involve known and unknown risks, uncertainties and other factors that may cause our results or our industry’s actual

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tightening credit markets and limitations on access to capital;

and obtaining and maintaining intellectual

property protection for our technology and time and expense associated with defending third-party claims of intellectual property infringement,

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.

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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