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Item 7. Management’s Discussion and Analysis

2024-03-27 compared with 2023-03-23 · 245 added, 246 removed, 248 unchanged (66% of the section changed)

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Factors” discussed in Item 1A of Part I of this Annual Report.

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

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 initiated VIKTORIA-1, a Phase 3 study evaluating gedatolisib in patients with HR+/HER2- advanced breast cancer in 2022 and

is a clinical-stage biotechnology company focused on the development of targeted therapies for oncology.

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.

Company initiated VIKTORIA-1, a Phase 3 study evaluating gedatolisib in patients with HR+/HER2- advanced breast cancer in 2022 and

is currently enrolling patients.

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.

is a potent, well-tolerated, small molecule reversible 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

In addition to the Phase 3 study, the Company recently announced that it received U.S.

Drug Administration ( “ FDA ” )

clearance for its Investigational New Drug (IND) submission for the clinical development of gedatolisib in combination with

Nubeqa® (darolutamide), for the treatment of patients with metastatic castration resistant prostate cancer (mCRPC).

initiated a Phase 1b/2 study, CELC-G-201, in the first quarter of 2024 and is currently enrolling patients.

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.

is a potent, well-tolerated, small molecule reversible 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 isoforms

and mTORC1 and mTORC2 complexes.

Each PI3K isoform and mTOR complex is known to preferentially affect different signal transduction events

that involve tumor cell survival, depending upon the aberrations associated with the linked pathway.

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 complexes cross-activates the uninhibited sub-units.

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.

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

isoforms and mTORC1 and mTORC2 complexes.

Each PI3K isoform and mTOR complex is known to preferentially affect different signal transduction

events that involve tumor cell survival, depending upon the aberrations associated with the linked pathway.

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 complexes cross-activates the uninhibited

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

tolerated by patients than oral PI3K and mTOR drugs.

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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.

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

PI3K inhibitors administered orally were developed to reduce toxicities in patients.

While the range of toxicities associated with isoform-specific

inhibitors is narrower than oral pan-PI3K or PI3K/mTOR inhibitors, administering them orally on a continuous basis still leads to challenging

The experience with an FDA approved oral p110-α specific inhibitor, Piqray, illustrates the challenge.

3 pivotal trial Piqray was found to induce a Grade 3 or 4 adverse event (AE) related to hyperglycemia in 39% of patients evaluated.

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

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.

While the range of toxicities associated with

isoform-specific inhibitors is narrower than oral pan-PI3K or PI3K/mTOR inhibitors, administering them orally on a continuous basis

still leads to challenging toxicities.

The experience with an FDA approved oral p110-α specific inhibitor, Piqray, illustrates

the challenge.

In its Phase 3 pivotal trial Piqray was found to induce a Grade 3 or 4 adverse event (AE) related to hyperglycemia

in 39% of patients evaluated.

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 December 31, 2023, 492 patients with solid tumors have received gedatolisib in eight clinical trials sponsored by Pfizer.

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138 patients.

Seven patients from this study continue to receive study treatment, as of December 31, 2022, each of which have received

study treatment for more than four 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).

Five patients from this study continue to receive study treatment, as of December 31, 2023, each of which have received

study treatment for more than five 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 cancer.

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 were observed in all four expansion arms and were comparable in each arm for PIK3CA WT and PIK3CA MT

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 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 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 with the Phase 3 dosing

schedule (Arm D).

For the Arm A patients that were treatment naive in the advanced setting, median PFS had not yet been reached.

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 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%.respectively.

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 (including unconfirmed partial responses) 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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No grade 5 events were reported in this study.

activated 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 inhibitor:

1) gedatolisib in combination with palbociclib and fulvestrant:

We are currently enrolling patients in a Phase 3, open-label, randomized

clinical trial (VIKTORIA-1) 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 inhibitor:

1) gedatolisib in combination with palbociclib

and fulvestrant;

and 2) gedatolisib in combination with fulvestrant.

Two hundred clinical

sites in North America, Europe, South America, Asia, and Australia have been selected to participate in the study.

The first clinical

site was activated in the third quarter.

The first dosage of a patient in the trial occurred in December 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 (3:3:1)

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

fulvestrant (Arm F).

Approximately two hundred clinical sites in North America, Europe,

South America, Asia, and Australia have been selected to participate in the study.

The first clinical site was activated in the third

quarter of 2022, and the first patient was dosed in December 2022.

VIKTORIA-1 Phase 3 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 (3:3:1) to receive a regimen of either gedatolisib, palbociclib, and fulvestrant (Arm D), or

alpelisib and fulvestrant (Arm E), or gedatolisib and fulvestrant (Arm F).

received approval from the US FDA in mid-2023 to proceed with the clinical development of gedatolisib in combination with

Nubeqa® (darolutamide), an approved androgen receptor inhibitor, for the treatment of patients with mCRPC.

We have since

initiated a Phase 1b/2 study (CELC-G-201) that will enroll up to 54 participants with mCRPC who progressed after treatment with an

androgen receptor inhibitor.

We dosed our first patient in this trial in February 2024.

In the Phase 1b portion of the study, Celcuity expects that 36 participants

will be randomly assigned to receive 600 mg darolutamide combined with either 120 mg gedatolisib in Arm 1 or 180 mg gedatolisib in Arm

An additional 12 participants will then be enrolled in the Phase 2 portion of the study at the recommended phase 2 dose (RP2D) level

to enable evaluation of 30 participants treated with the RP2D of gedatolisib.

The primary objectives of the Phase 1b portion of the trial include

assessment of the safety and tolerability of gedatolisib in combination with darolutamide and determination of the recommended Phase 2

dose of gedatolisib.

The primary objective of the Phase 2 portion of the trial is to assess the radiographic progression-free survival

(rPFS) at six months of patients who received the RP2D.

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.

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

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

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

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

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

of these therapies in CELsignia selected patients.

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

December 22, 2022, Celcuity closed on a $20.0 million term loan (the “Term B Loan”) with an affiliate of Innovatus Capital

Partners, LLC (“Innovatus”), pursuant to a Loan and Security Agreement, dated April 8, 2021 (the “Loan Agreement”),

as amended by that First Amendment to Loan and Security Agreement, dated August 9, 2022 (the “Amendment and collectively with the

Loan Agreement, the “Amended Loan Agreement”).

The Company became eligible to draw down the Term B Loan upon the closing

of the Company’s previously disclosed $100 million private placement on December 9, 2022.

As previously disclosed, the Amended

Loan Agreement may provide the Company with up to $75.0 million through funding of up to five term loans.

Funding of the first $15.0

million term loan occurred on April 8, 2021 in connection with entering into the original Loan Agreement.

As of December 31, 2022, term

loans totaling $35 million are outstanding under the Amended Loan Agreement.

Celcuity will be able to draw on two additional tranches

of $10 million each and one additional tranche of $20 million upon achievement of certain clinical trial milestones and satisfaction

of certain financial covenants determined on a pro forma as-funded basis.

Funding of these additional tranches is also subject to other

customary conditions and limits on when the Company can request funding for such tranches.

Celcuity is entitled to make interest only

payments for the 48-month period from the original agreement date or for the 60-month period from the original agreement date if certain

conditions are met.

The loans will mature on April 8, 2027, the sixth anniversary of the initial funding date.

Innovatus has the right

to convert outstanding principal into shares of Celcuity common stock until the third anniversary of the loan amendment date, with such

amount limited to an aggregate of up to $6.6 million assuming all tranches are funded.

The loan is secured by all of Celcuity’s

December 9, 2022, Celcuity closed on a private placement of common stock and preferred stock, resulting in gross proceeds of approximately

$100 million, before deducting placement agent fees and other expenses.

Celcuity issued 6,182,574 shares of common stock, 1,120,873 shares

of Series A Preferred Stock and warrants exercisable for 6,956,450 shares of common stock to certain institutional and other accredited

investors pursuant to a securities purchase agreement entered into on May 15, 2022.

Pursuant to the securities purchase agreement, the

closing (funding) of the private placement followed dosage of the first patient in Celcuity’s Phase 3 clinical trial, VIKTORIA-1,

evaluating gedatolisib, Celcuity’s lead therapeutic candidate.

Investors purchased shares of common stock and Series A Preferred

Stock at a price of $5.75 per share (on an as converted to common stock basis), with forty percent (40%) warrant coverage (on an as converted

to common stock basis) and customary resale registration rights.

The warrants have an exercise price of $8.05 per share.

December 7, 2022, Celcuity announced that the first patient was dosed in it Phase 3 VIKTORIA-1 clinical trial.

Operational activities

continue to focus on facilitating activation of sites and enrolling patients.

The clinical trial protocol was updated to include an additional

study arm (Arm F) to evaluate gedatolisib plus fulvestrant in 50 patients who have PIK3CA mutations.

This update was made in response

to a recommendation from the European Medicines Agency (EMA) that the study arms for PIK3CA mutated patients mirror the same study arms

for PIK3CA non-mutated patients.

No changes were made to the primary endpoints.

VIKTORIA-1 will 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.

Further details about the study are available at ClinicalTrials.gov .

February 22, 2024, the Company announced that the first patient has been dosed in its Phase 1b/2 study (CELC-G-201) evaluating gedatolisib

in combination with Nubeqa® (darolutamide), an approved androgen receptor inhibitor, for the treatment of patients with mCRPC.

In December 2023, Celcuity presented data from nonclinical studies

evaluating gedatolisib and other PI3K/AKT/mTOR (PAM) inhibitors in breast cancer cell lines during a poster session at the 2023 San Antonio

Breast Cancer Symposium (SABCS).

In a panel of breast cancer cell lines, gedatolisib was found to be more cytotoxic and at least 300-fold

more potent, on average, compared to the single node PAM inhibitors.

December 1, 2023, pursuant to an Open Market Sale Agreement SM with Jefferies LLC, as agent, the Company sold 1,034,500 shares

of common stock in a single transaction at a price of $14.50 per share, generating gross proceeds of $15 million before deducting commissions

and other offering expenses of $0.6 million.

October 18, 2023, the Company entered into a securities purchase agreement to sell pre-funded warrants at a price of $8.70 per warrant,

to purchase up to 5,747,787 shares of the Company’s common stock in a private placement.

The closing of the private placement occurred

on October 20, 2023 and resulted in gross proceeds of approximately $50 million, before deducting offering expenses of approximately

$0.1 million.

Each Warrant to purchase one share has a purchase price of $8.699 per share, and an exercise price of $0.001 per share

for the Common Stock issuable upon exercise of the Warrant (for aggregate consideration equating to $8.70 per share).

The Company expects

to use the net proceeds to advance clinical development of gedatolisib and for general corporate purposes.

The Company has entered into

a Registration Rights Agreement in connection with the private placement, pursuant to which it has agreed to register for resale the

shares issuable upon exercise or exchange of the Warrants.

have not generated any revenue from sales to date, and we continue to incur significant research and development and other expenses related

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million, and we had an accumulated deficit of approximately $160.1 million.

of COVID-19 on our Business

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 CELsignia Phase

2 clinical trials and now expect interim results from FACT-1 and FACT-2 to be delayed until the second half of 2023.

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

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date, we have not generated any revenue.

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 initiated a Phase 3 clinical trial, VIKTORIA-1, in 2022 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.

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 initiated a Phase 3 clinical trial, VIKTORIA-1,

in 2022 to support potential regulatory approval to market gedatolisib.

In August 2023, we announced plans to proceed with the

clinical development of gedatolisib in combination with Nubeqa ® (darolutamide), an approved androgen receptor

inhibitor, for the treatment of patients with mCRPC.

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 therapies.

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

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

As we continue development of gedatolisib, manage the

VIKTORIA-1 Phase 3 trial and other clinical trials to evaluate the efficacy of targeted therapies in cancer patients selected with one

of our CELsignia tests, the proportion of research and development expenses allocated to external spending will grow at a faster rate

than expenses allocated to internal expenses.

As we continue to develop gedatolisib and manage

studies and clinical trials, including the VIKTORIA-1 Phase 3 trial, the CELC-G-201 Phase 1b/2 trial, and other clinical trials to

evaluate the efficacy of targeted therapies in cancer patients selected with one of our CELsignia tests, the proportion of research

and development expenses allocated to external spending will grow at a faster rate than expenses allocated to internal

and Administrative

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To date, we have incurred

immaterial sales and marketing expenses as we continue to focus primarily on the development of our first drug, gedatolisib,

managing the VIKTORIA-1 Phase 3 trial, and development of our CELsignia platform and corresponding CELsignia tests.

We would expect

to begin to incur increased sales and marketing expenses in anticipation of the commercialization of our first drug, gedatolisib,

and CELsignia tests.

These increased expenses are expected to include payroll-related costs as we add employees in the commercial

departments, costs related to the initiation and operation of our sales and distribution network and marketing related

immaterial sales and marketing expenses as we continue to focus primarily on developing our first drug, gedatolisib, managing the

VIKTORIA-1 Phase 3 and CELC-G-201 Phase 1b/2 trials, and developing our CELsignia platform and corresponding CELsignia tests.

would expect to begin to incur increased sales and marketing expenses in anticipation of the commercialization of our first drug,

gedatolisib, and CELsignia tests.

These increased expenses are expected to include employee-related and consulting costs.

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

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Interest income

Loss on sale of fixed assets

Other income (expense), net

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and Development

the year ended December 31, 2022, our research and development expenses were approximately $35.3 million, representing an increase of

approximately $9.5 million, or 37%, compared to the same period in 2021.

Included in the $9.5 million increase is a $10 million reduction

in gedatolisib licensing related expenses offset by increases of $19.5 million in other research and development expenses.

period, research and development expenses included a $10.0 million upfront license fee related to the execution of the Pfizer license

agreement while there were no licensing agreement expenses for gedatolisib in 2022.

Of the $19.5 million increase in research and development

expense, $4.9 million was related to increased employee and consulting expenses, of which $0.9 million was in the form of non-cash stock-based

compensation.

The remaining $14.6 million increase of research and development costs is related to costs for existing clinical trials

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

the year ended December 31, 2023, our research and development expenses were approximately $60.6 million, representing an increase

of approximately $25.3 million, or 72%, compared to the same period in 2022.

Of the $25.3 million increase in research and

development expense, $2.4 million was related to increased employee and consulting expenses.

The remaining $22.9 million increase of research and development costs are 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.

We plan to increase our research and development expenses

for the foreseeable future as we seek to develop gedatolisib, manage the VIKTORIA-1 Phase 3 trial, discover new cancer sub-types, and

develop and validate additional CELsignia tests to diagnose such sub-types.

We also expect to incur increased expenses to support companion

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

trial for gedatolisib.

We plan to increase our research and development

expenses for the foreseeable future as we seek to develop gedatolisib, manage the VIKTORIA-1 Phase 3 and the CELC-G-201 Phase 1b/2 trials, discover new

cancer sub-types, and develop and validate additional CELsignia tests to diagnose such sub-types.

We also expect to incur increased

expenses to support companion diagnostic business development activities with pharmaceutical companies as we develop additional

CELsignia tests and manage the clinical trials for gedatolisib.

and Administrative

the year ended December 31, 2022, our total general and administrative expenses were $4.1 million, representing an increase of approximately

$1.5 million, or 58%, compared to the same period in 2021.

The increase primarily resulted from a $1.3 million increase in compensation

related expenses, including approximately $1.1 million of non-cash stock-based compensation.

In addition, other general and administrative

expenses increased $0.2 million primarily due to professional fees associated with being a public company and director and officer insurance.

the year ended December 31, 2023, our total general and administrative expenses were $5.6 million, representing an increase of

approximately $1.5 million, or 37%, compared to the same period in 2022.

The increase primarily resulted from a $1.1 million

increase in employee and consulting expenses.

addition, other general and administrative expenses increased $0.4 million primarily due to 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.

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

the year ended December 31, 2023, interest expense was $5.3 million and represents an increase of $3.2 million compared to the same

period in 2022.

The Loan Agreement that was executed in April 2021 amended in August 2022, and includes $0.9 million of non-cash

interest expense.

The increase primarily reflects the loan being in place for the full year in 2022, while only a portion of the year in

the year ended December 31, 2022, interest income increased approximately $1.1 million compared to the same period in 2021.

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

higher cash, cash equivalents and short-term investment balances.

The increase is due to the Loan Agreement that was executed in April 2021, amended in August 2022, and includes $2.1

million of non-cash interest expense.

The increase in interest expense is primarily due to the incremental $20 million funding of

Term Loan B in December 2022.

the year ended December 31, 2023, interest income was $7.8 million and represents an increase of $6.7 million compared to the same period

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

to higher cash, cash equivalents and short-term investment balances.

AND CAPITAL RESOURCES

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

In March 2024, an investor exercised 1,739,080 warrants at an exercise price of $8.05, which generated approximately $14 million in cash.

The warrants were issued pursuant to a private placement that closed and was funded on December 9, 2022.

of December 31, 2023, our cash and cash equivalents and short-term investments were approximately $30.7 million and $149.9 million, respectively,

and we had an accumulated deficit of approximately $160.1 million.

Market Sale Offering SM .

On February 4, 2022, we entered into an Open Market Sale Agreement SM 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.

Pursuant to the Open Market Sale Agreement SM with Jefferies LLC, as agent, on December

1, 2023, the Company sold 1,034,500 shares of common stock in a single transaction at a price of $14.50 per share, generating gross proceeds

of $15 million ($14.4 million net of commissions and offering expenses).

At December 31, 2023, $29.8 million of common stock remains

available for sale under the Jefferies agreement.

Warrants On October 18, 2023, the Company entered into a securities purchase agreement to sell pre-funded warrants at a price of

$8.70 per warrant, to purchase up to 5,747,787 shares of the Company’s common stock in a private placement.

The closing of the

private placement occurred on October 20, 2023, and resulted in gross proceeds of approximately $50 million, before deducting offering

expenses of approximately $0.1 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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Market Sale Agreement SM .

On February 4, 2022, we entered into an Open Market Sale Agreement SM 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.

On October 12, 2022, pursuant to this agreement, the Company sold 500,000 shares of common stock

in a single transaction at a price of $10.35 per share, generating gross proceeds of $5.2 million ($4.8 million net of commissions and

offering expenses).

At December 31, 2022, $44.8 million of common stock remains available for sale under the Jefferies agreement.

On October 12, 2022, pursuant to our Open Market Sale Agreement SM with Jefferies

LLC as agent, the Company sold 500,000 shares of common stock in a single transaction at a price of $10.35 per share, generating

gross proceeds of $5.2 million ($4.8 million net of commissions and offering expenses).

Loan Agreement.

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described above.

Additionally, the Company will be able to draw on two additional tranches of $10 million and one additional tranche

of $20 million upon achievement of certain clinical trial milestones and satisfaction of certain financial covenants determined on a

pro forma as-funded basis.

Funding of these additional tranches is also subject to other customary conditions and limits on when the

Company can request funding for such tranches.

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

manage the VIKTORIA-1 Phase 3 trial, 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 to fund our research and development expenses, clinical trial costs, capital expenditures,

working capital, sales and marketing expenses, and general corporate expenses.

Additionally, the Company will be able to draw on two additional tranches of $10

million and one additional tranche of $20 million upon achievement of certain clinical trial milestones and satisfaction of certain financial

covenants determined on a pro forma as-funded basis.

Funding of these additional tranches is also subject to other customary conditions

and limits on when the Company can request funding for such tranches.

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

gedatolisib, manage the VIKTORIA-1 Phase 3 and CELC-G-201 Phase 1b/2 trials, conduct research related to the discovery of new cancer

sub-types, conduct other studies and 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, which

includes funds received under the debt and equity financings 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, cash equivalents and short-term investments together with available borrowings

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cash used in operating activities was approximately $53.8 million for the year ended December 31, 2023 and consisted primarily of a net

loss of approximately $63.8 million, offset by working capital changes of $3.9 million and non-cash expense items of approximately

$6.1 million.

Non-cash expense items of approximately $6.1 million primarily consisted of $4.9 million of stock-based compensation expense,

non-cash interest expense of $2.1 million and depreciation expense of $0.1 million, offset by $1.0 accrued interest income.

The approximately

$3.9 million of working capital changes was primarily due to increases in accounts payable and accrued expenses, offset by an increase

in other current assets.

cash used in operating activities was approximately $36.0 million for the year ended December 31, 2022 and consisted primarily of a net

loss of approximately $40.4 million and working capital changes of $1.2 million, offset by non-cash expense items of approximately

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The approximately $1.2 million of working capital

changes was primarily due to an increase in prepaid assets, somewhat offset by increases in accounts payable and accrued expenses.

cash used in operating activities was approximately $20.3 million for the year ended December 31, 2021 and consisted primarily of a net

loss of approximately $29.6 million, adjusted for non-cash items of approximately $8.5 million and working capital changes of

approximately $0.8 million.

Non-cash expense items of approximately $8.5 million consisted of $5.0 million for issuance of common stock

related to a license agreement, stock-based compensation expense of approximately $2.6 million, non-cash interest expense of $0.6 million

and depreciation of approximately $0.3 million.

The working capital change of approximately $0.8 million was primarily due to

an increase in accounts payable, slightly offset by an increase in prepaid assets.

changes was primarily due to an increase in other current assets, somewhat offset by increases in accounts payable and accrued expenses.

cash used in investing activities for the year ended December 31, 2023 was approximately $5.0 million and consisted of approximately

$4.9 million of net purchases of short-term investments in government securities (U.S.

Treasury Bills and U.S.

government agency securities)

and approximately $0.1 million in purchases of property and equipment.

cash used in investing activities for the year ended December 31, 2022 was approximately $144.0 million and consisted of approximately

$143.9 million of short-term investments in government securities (U.S.

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$0.1 million in purchases of property and equipment.

cash used in investing activities for the year ended December 31, 2021 was approximately $0.1 million and consisted of purchases of property

and equipment.

cash provided by financing activities for the year ended December 31, 2023 was approximately $64.9 million.

The $64.9 million primarily

consisted of net proceeds from a private placement offering and ATM offering totaling $100.5 million and $19.5 million from net proceeds

related to the closing of a Loan Agreement.

The remaining $0.3 million was the result of proceeds from the exercise of employee stock

options and proceeds from employee stock purchases.

consisted of net proceeds from a pre-funded warrants offering and ATM offering, collectively totaling $64.4 million.

The remaining $0.5

million was the result of proceeds from the exercise of employee stock options, the exercise of warrants, and proceeds from employee

stock purchases, slightly offset by payments for secondary registration and debt issuance costs.

cash provided by financing activities for the year ended December 31, 2022 was approximately $120.3 million.

The $120.3 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.

consisted of net proceeds from a private placement offering and ATM offering, collectively totaling $100.5 million, and $19.5 million

from net proceeds related to the closing of a Loan Agreement.

The remaining $0.3 million was the result of proceeds from the exercise

of employee stock options and proceeds from employee stock purchases.

ACCOUNTING PRONOUNCEMENTS

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Compensation expense for ESPP rights is recorded in line with each respective offering period.

Company records prepaid assets or accrued expenses for prepaid or estimated clinical trial costs conducted by third-party service providers,

which includes the conduct of preclinical studies and clinical trials.

These costs can be a significant component of the Company’s

research and development expenses.

The Company primarily relies on a compilation of progress reports from third-party service providers,

including the respective invoicing, to record actual expenses, along with determining changes to prepaid assets and accrued liabilities.

To date, the company believes utilization of third-party reports most accurately reflects expenses.

As the current VIKTORIA-1 Phase 3

trial ramps up site activation and patient enrollment, the Company may need to estimate expenses in future periods and actual services

performed may vary from these estimates.

Changes in these estimates that result in material changes to the Company’s prepaid assets

or accrued expenses could materially affect the Company’s results of operations.

Company records prepaid assets or accrued expenses for prepaid or estimated clinical trial costs conducted by third-party service

providers, which includes the conduct of preclinical studies and clinical trials.

These costs can be a significant component of the

Company’s research and development expenses.

The Company primarily relies on a compilation of progress reports from

third-party service providers, including the respective invoicing, to record actual expenses, along with determining changes to

prepaid assets and accrued liabilities.

To date, the Company believes utilization of third-party reports most accurately reflects

expenses incurred.

As the current VIKTORIA-1 Phase 3 and CELC-G-201 Phase 1b/2 trials ramp up site activation and patient

enrollment, the Company’s estimated expenses in future periods and the actual services performed may vary from these

estimates, and these estimates may become more significant.

Changes in these estimates that result in material changes to the

Company’s prepaid assets or accrued expenses could materially affect the Company’s results of operations.

Quantitative and Qualitative Disclosures About Market Risk

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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-K

Item 7. Management’s Discussion and Analysis