Celcuity Inc. 10-Q

ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed financial statements and the related notes appearing under Item 1 of Part I of this Quarterly Report on Form 10-Q (this “Quarterly Report”). 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, 2024, filed with the SEC on March 31, 2025, and the cautionary statements 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. Overview Celcuity is a clinical-stage biotechnology company focused on the development of targeted therapies for the treatment of multiple solid tumor indications. The Company’s lead therapeutic candidate is gedatolisib, a kinase inhibitor of the phosphatidylinositol 3-kinase (“PI3K”), serine/threonine-protein kinase protein kinase B (“AKT”), mechanistic target of rapamycin (“mTOR”) pathway that binds to all class I PI3K isoforms and the mTOR complexes, mTORC1 and mTORC2. By targeting all class I PI3K isoforms and mTORC1/2, gedatolisib induces comprehensive inhibition of the PI3K/AKT/mTOR (“PAM”) pathway. Its mechanism of action and pharmacokinetic properties are differentiated from other currently approved and investigational therapies that target PI3K or mTOR alone or together. A Phase 3 clinical trial, VIKTORIA-1, evaluating gedatolisib in combination with fulvestrant with or without palbociclib in patients with HR+/HER2- advanced breast cancer is currently enrolling patients. Site selection activities are completed and site activation activities for a Phase 3 clinical trial, VIKTORIA-2, evaluating gedatolisib in combination with a CDK4/6 inhibitor and fulvestrant as first-line treatment for patients with endocrine treatment resistant HR+/HER2- advanced breast cancer, are completed and site activities have begun. The first patient is expected to be dosed in the second quarter of 2025. A Phase 1b/2 clinical trial, CELC-G-201, evaluating gedatolisib in combination with darolutamide in patients with metastatic castration resistant prostate cancer (“mCRPC”), is currently underway. An investigator sponsored trial has been initiated in collaboration with the Dana Farber Cancer Institute and Massachusetts General Hospital to evaluate gedatolisib in combination with abemaciclib and letrozole in patients with endometrial cancer. In April 2021, we obtained exclusive global development and commercialization rights to gedatolisib under a license agreement with Pfizer. We believe gedatolisib’s unique mechanism of action, differentiated chemical structure, favorable pharmacokinetic properties, and intravenous route of administration offer distinct advantages over currently approved and investigational therapies that target PI3K, AKT, or mTOR alone or together. ● Overcomes limitations of therapies that only inhibit a single Class I PI3K isoform, AKT, or one mTOR kinase complex. Gedatolisib is a pan-class I isoform PI3K inhibitor with low nanomolar potency for the p110α, p110β, p110γ, and p110δ isoforms and the mTORC1 and mTORC2 complexes. By targeting all class I PI3K isoforms and mTORC1/2, gedatolisib induces comprehensive inhibition of the PAM pathway. 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 PI3K isoform (e.g., alpelisib, a PI3K-α inhibitor), AKT (e.g., capivasertib, an AKT 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-activate the uninhibited sub-units. This, in turn, induces compensatory resistance that reduces the efficacy of isoform specific PI3K, AKT, or mTORC1 kinase 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, AKT, and mTOR. ● Better tolerated by patients than oral PI3K and mTOR drugs. Gedatolisib is administered intravenously 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’s comprehensive inhibition of the PAM pathway at low nanomolar potency, IV route of administration, and pharmacokinetic properties enables it to achieve optimal anti-proliferative effects on tumor cells without inducing the levels of hyperglycemia, rash, and diarrhea typically associated with oral single-node inhibitors of the PAM pathway. 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 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 AEs. 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 9% discontinued treatment. As of March 31, 2025, 492 patients with solid tumors have received gedatolisib in eight completed clinical trials. 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. 15 A Phase 1b clinical trial (B2151009) evaluating patients with HR+/HER2- metastatic breast cancer was initiated in 2016 and subsequently enrolled 138 patients. Four patients from this study continue to receive study treatment, as of March 31, 2025, each of whom has received study treatment for more than five years. The B2151009 clinical trial was an open label, multiple arm Phase 1b clinical trial that evaluated gedatolisib in combination with palbociclib (CDK4/6 inhibitor) and fulvestrant or letrozole in patients with HR+/HER2- advanced breast cancer. 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, and D). High objective overall response rates (“ORR”) were observed in all four expansion arms and were comparable in each arm for PIK3CA wild type (“WT”) and PIK3CA mutant (“MT”) patients. In patients who received prior hormonal therapy alone or in combination with a CDK4/6 inhibitor (Arms B, C, and D), the ORR (including unconfirmed partial responses) ranged from 36% to 77%. In patients who were treatment naïve in the advanced setting (Arm A), the ORR was 85%. Each arm achieved its primary endpoint target, which was reporting higher ORR in the study arm than the ORR from either the PALOMA-2 study (ORR=55%) 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 patients enrolled in the expansion portion of the study who had evaluable tumors, the ORR observed was 63%. 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). For all treatment naïve patients who received gedatolisib combined with palbociclib plus letrozole in Expansion Arm A and Escalation Arm A (N=41), median PFS was 48.6 months and ORR was 79%. These results compare favorably to published data for current first-line standard-of-care treatments for patients with HR+/HER2-advanced breast cancer. Gedatolisib combined with palbociclib and endocrine therapy demonstrated a favorable safety profile with manageable toxicity. The majority of treatment related AEs were Grades 1 and 2. The most frequently observed AEs included stomatitis/mucosal inflammation, the majority of which were Grades 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. 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. Over two hundred clinical sites in North America, Europe, Latin America, and Asia-Pacific are participating in the study. The first patient was dosed in this trial in December 2022. The VIKTORA-1 Phase 3 clinical trial enables separate evaluation of subjects according to their PIK3CA status. Subjects who meet eligibility criteria and have PIK3CA WT tumors were 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). During the fourth quarter of 2024, we achieved our enrollment goal of 351 subjects for the PIK3CA WT cohort. Based on evaluation of blinded event rates, the primary completion date is projected to occur in June 2025 with topline data now expected to be available in the third quarter of 2025 for this group. Subjects who meet eligibility criteria and are PIK3CA MT are 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). Enrollment of up to 350 subjects who have PIK3CA MT tumors is ongoing. We expect topline data for this group to be available in the fourth quarter of 2025. We received approval from the 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 clinical trial, CELC-G-201, that is enrolling patients with mCRPC who progressed after treatment with an androgen receptor inhibitor. The first patient was dosed in this trial in February 2024. In the Phase 1b portion of the clinical trial, Celcuity expects approximately 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 2. 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. 16 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 PFS at six months of patients who received the RP2D. The study is expected to report topline data for the Phase 1b dose escalation portion of the trial late in the second quarter of 2025. A Phase 3, open-label, randomized clinical trial to evaluate the efficacy and safety of gedatolisib plus a CDK4/6 inhibitor and fulvestrant as first-line treatment for patients with HR+/HER2- advanced breast cancer that is endocrine treatment resistant (“VIKTORIA-2”) is currently activating clinical trial sites. For the CDK4/6 inhibitor, investigators may choose either ribociclib or palbociclib. This multi-center, international trial is expected to enroll approximately 12–36 evaluable subjects in the safety run-in portion of the study to evaluate the safety of gedatolisib when combined with ribociclib and fulvestrant. In the Phase 3 portion of the study, approximately 638 subjects will be randomized and assigned to Cohort 1 (PIK3CA WT) or Cohort 2 (PIK3CA MT) based on their PIK3CA status. Subjects in each cohort will be randomized on a 1:1 basis to either Arm A (gedatolisib with fulvestrant and ribociclib or palbociclib) or Arm B (fulvestrant and ribociclib or palbociclib). It is expected that approximately 200 clinical sites across North America, Europe, Latin America, and Asia-Pacific will participate. The first patient is expected to be dosed in the second quarter of 2025. Recent Developments Based on evaluation of blinded event rates in the ongoing VIKTORIA-1 Phase 3 clinical trial, the primary completion date for the PIK3CA WT patient cohort is projected to occur in June 2025 with topline data now anticipated to be available in the third quarter of 2025. If our topline data from the WT cohort is positive, we expect the data will support the filing of our first new drug application and, if approved, our transition to a commercial stage company. If gedatolisib ultimately does receive FDA approval for both the PIK3CA WT and MT populations, we estimate the peak revenue potential for this second-line indication could exceed $2 billion with just 40% market penetration. ● Enrollment is ongoing in the PIK3CA MT of the VIKTORIA-1 trial and remains on track to report topline data in the fourth quarter of 2025. ● VIKTORIA-1 is a global Phase 3 study evaluating gedatolisib in combination with fulvestrant with and without palbociclib in adults with HR+, HER2- advanced breast cancer who have received prior treatment with a CDK4/6 inhibitor. Site activation activities are underway globally for the VIKTORIA-2 Phase 3 clinical trial and dosing of the first patient is anticipated to occur in the second quarter of 2025. ● VIKTORIA-2 is a global, Phase 3 open-label randomized study evaluating the efficacy and safety of gedatolisib in combination with fulvestrant plus a CDK4/6 inhibitor, either ribociclib or palbociclib, in comparison to fulvestrant plus a CDK4/6 inhibitor as a first-line treatment for patients with HR+/HER2- advanced breast cancer who are endocrine therapy resistant. ● Prior to initiating the Phase 3 portion of the study, a safety run-in will be conducted in 12-36 participants to assess the safety of gedatolisib in combination with ribociclib and fulvestrant. The CELC-G-201 study is on track to report topline data for the Phase 1b portion of the trial late in the second quarter of 2025. ● CELC-G-201 is a Phase 1b/2 evaluating gedatolisib in combination with darolutamide for the treatment of patients with metastatic castration resistant prostate cancer (mCRPC) whose disease progressed while on or after treatment with an androgen receptor signaling inhibitor. ● The Phase 1b portion of the trial will assess the safety and tolerability of gedatolisib in combination with darolutamide and is expected to identify the recommended phase 2 dose regimen. Initiating a clinical trial collaboration with the Dana Farber Cancer Institute and Massachusetts General Hospital to evaluate gedatolisib in combination with abemaciclib and letrozole in patients with endometrial cancer. ● In a prior Phase 2 study, gedatolisib was evaluated as a monotherapy in patients with endometrial cancer. Results of Operations We have not generated any revenue from sales to date, and we continue to incur significant research and development and other expenses related to our ongoing operations. As a result, we are not and have never been profitable and have incurred losses in each period since our inception in 2012. For the three months ended March 31, 2025 and 2024, we reported a net loss of approximately $37.0 million and $21.6 million, respectively. As of March 31, 2025, we had an accumulated deficit of approximately $308.9 million. As of March 31, 2025, we had cash and cash equivalents and short-term investments of approximately $205.7 million. Components of Operating Results Revenue To 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. In August 2023, we initiated a Phase 1b/2 clinical trial, CELC-G-201, and we have initiated a second Phase 3 clinical trial, VIKTORIA-2, with dosing of the first patient planned in the second quarter of 2025 to support submission to the FDA seeking approval for this indication for 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. Research and Development Since 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: ● 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; ● validation costs for gedatolisib; ● facilities expenses; and ● legal costs associated with patent applications. 17 Internal and external research and development costs are expensed as they are incurred. As we continue development of gedatolisib and manage studies and clinical trials, including the VIKTORIA-1 Phase 3 clinical trial, the CELC-G-201 Phase 1b/2 clinical trial, and the VIKTORIA-2 Phase 3 clinical trial, the proportion of research and development expenses allocated to external spending will grow at a faster rate than expenses allocated to internal expenses. General and Administrative General and administrative expenses consist primarily of salaries, benefits and stock-based compensation related to our executive, finance and support functions. Other general and administrative expenses include professional fees for auditing, tax, and legal services associated with being a public company, director and officer insurance, investor relations and travel expenses for our general and administrative personnel. Sales and Marketing Expenses and costs related to the initiation and operation of our medical and marketing teams, supply chain and distribution network are being incurred in anticipation of the commercialization of our first drug candidate, gedatolisib. These expenses consist primarily of employee-related expenses, professional and consulting fees related to these functions and operations, software costs, and the acquisition of data required to support our market analysis for our drug product. We would expect to begin to incur sales force, sales support staff and marketing expenses closer to a potential FDA approval date. Interest Expense Interest expense is primarily due to the A&R Loan Agreement (as defined below). Interest Income Interest income consists of interest income earned on our cash, cash equivalents, and investment balances. Results of Operations Comparison of the Three Months Ended March 31, 2025 and 2024 Three Months Ended March 31, Increase (Decrease) (in thousands) 2025 2024 $ Percent Change Statements of Operations Data: Operating expenses: Research and development $ 32,227 $ 20,647 $ 11,580 56 % General and administrative 3,906 1,846 2,060 112 Total operating expenses 36,133 22,493 13,640 61 Loss from operations (36,133 ) (22,493 ) (13,640 ) 61 Other (expense) income Interest expense (3,183 ) (1,401 ) (1,782 ) 127 Interest income 2,319 2,282 37 2 Other (expense) income, net (864 ) 881 (1,745 ) (198 ) Net loss before income taxes (36,997 ) (21,612 ) (15,385 ) 71 Income tax benefits - - - - Net loss $ ( 3 6,997 ) $ (21,612 ) $ (15,385 ) 71 % 18 Research and Development Our research and development expenses for the three months ended March 31, 2025 were approximately $32.2 million, representing an increase of approximately $11.6 million, or 56%, compared to the same period in 2024. Of the $11.6 million increase in research and development expense, $5.9 million was related to increased employee and consulting expenses. The remaining $5.7 million was primarily related to activities supporting our ongoing clinical trials. Conducting 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 and conduct the VIKTORIA-1 Phase 3 clinical trial, the CELC-G-201 Phase 1b/2 clinical trial and the VIKTORIA-2 Phase 3 clinical trial. General and Administrative Our general and administrative expenses for the three months ended March 31, 2025 were approximately $3.9 million, representing an increase of approximately $2.1 million, or 112%, compared to the same period in 2024. Of the $2.1 million increase in general and administrative expense, $1.6 million was related to increased employee and consulting expenses. The remaining $0.5 million of the $2.1 million increase resulted from professional fees, expanding infrastructure and other administrative expenses. We 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, an expanding infrastructure, and increased professional fees associated with public company regulatory developments and requirements, and other compliance matters. Interest Expense Interest expense for the three months ended March 31, 2025 was $3.2 million and represents an increase of $1.8 million, or 127%, compared to the same period in 2024. Interest expense is the result of the A&R Loan Agreement. The increase is due primarily to the incremental $61.7 million funding of Term Loan C in May 2024. The $3.2 million of interest expense includes $0.8 million of non-cash interest expense. Interest Income Interest income for the three months ended March 31, 2025 was $2.3 million which is flat compared to the same period in 2024. Liquidity and Capital Resources Since our inception, we have incurred losses and cumulative negative cash flows from operations. Through March 31, 2025, 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, 2025, we raised an aggregate of approximately $374.6 million of net proceeds through sales of our securities, and as of March 31, 2025 had $100.0 million of borrowings under loan agreements, not including payable-in-kind interest. As of March 31, 2025, our cash and cash equivalents and short-term investments were approximately $16.5 million and $189.2 million, respectively, and we had an accumulated deficit of approximately $308.9 million. In March 2025, an investor exercised 695,650 warrants at an exercise price of $8.05, which generated approximately $5.6 million in cash. The warrants were issued pursuant to a private placement that closed on December 9, 2022. Open Market Sale Agreement. On February 4, 2022, we entered into an Open Market Sale Agreement with Jefferies LLC (“Jefferies”), 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 $50.0 million, which amount was subsequently increased to $125.0 million on December 6, 2024. 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). On December 1, 2023, pursuant to this agreement, 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 $15.0 million ($14.4 million net of commissions and offering expenses). In April 2024 and May 2024, pursuant to this agreement, the Company sold 285,714 and 149,700 shares of common stock, respectively, at an average selling price of $17.55 per share, generating gross proceeds of $7.6 million before deducting commissions and other offering expenses of $0.3 million. At March 31, 2025, $125.0 million of common stock remains available for sale under the Open Market Sale Agreement with Jefferies. 19 Equity Offering. On May 30, 2024, the Company entered into an underwriting agreement with Leerink Partners LLC, TD Securities (USA) LLC and Stifel, Nicolaus & Company, Incorporated as representatives of the several underwriters relating to the issuance and sale of 3,871,000 shares of common stock, at a price to the public of $15.50, generating gross proceeds of approximately $60.0 million. The offering closed on May 31, 2024 and resulted in net proceeds to the Company of approximately $56.3 million after deducting underwriting discounts and other offering expenses payable by the Company. The Company intends to use the net proceeds from the offering for working capital and general corporate purposes, which may include research and development expenditures, clinical trial expenditures, expansion of business development activities and other general corporate purposes. Loan Agreement. On May 30, 2024, the Company entered into an Amended and Restated Loan and Security Agreement (the “A&R Loan Agreement”) with Innovatus Life Sciences Lending Fund I, LP, a Delaware limited partnership (“Innovatus”), as collateral agent, and the Lenders including Innovatus in its capacity as a Lender and Oxford Finance LLC (“Oxford”), pursuant to which Innovatus and Oxford, as Lenders, have agreed to make certain term loans (“Term Loans”) to the Company in the aggregate principal amount of up to $180 million. The A&R Loan Agreement amends and restates, in its entirety, that certain Loan and Security Agreement, dated April 8, 2021, as amended, between the Company and Innovatus, as collateral agent, and the Lenders named therein (the “Prior Loan Agreement”). Funding of the first $100 million under the A&R Loan Agreement occurred on May 30, 2024, including tranche payments of $16.8 million (the “Term A Loan”) and $21.5 million (the “Term B Loan”) reflecting repayment of the principal amount of loans under the Prior Loan Agreement plus accrued payment-in-kind interest, in addition to $61.7 million of new borrowings (the “Term C Loan”). The Company will be eligible to draw on a fourth tranche of $30 million (the “Term D Loan”) and fifth tranche of $50 million (the “Term E Loan”), in each case upon achievement of certain clinical trial milestones and satisfaction of certain financial covenants determined on a pro forma as-funded basis. The Lenders may, in their sole discretion upon the Company’s request, make additional term loans to the Company of $45 million (the “Term F Loan”). Funding of these additional tranches is also subject to other customary conditions and limits on when the Company can request funding for such tranches. Costs associated with the new borrowings were approximately $2.4 million. Pursuant to the A&R Loan Agreement, the Company is entitled to make interest-only payments for thirty-six months, or up to forty-eight months if certain conditions are met. The Term Loans will mature on May 1, 2029 and will bear interest at a rate equal to the sum of (a) the greater of (i) the Prime Rate (as defined in the A&R Loan Agreement) or (ii) 7.75%, plus (b) 2.85%, provided that 1.0% of such interest will be payable in-kind by adding an amount equal to such 1.0% of the outstanding principal amount to the then outstanding principal balance on a monthly basis through May 31, 2027. The A&R Loan Agreement is secured by all assets of the Company. Proceeds will be used for working capital purposes and to fund the Company’s general business requirements, including the Phase 3 VIKTORIA-2 clinical trial. The A&R Loan Agreement contains customary representations and warranties and covenants, subject to customary carve-outs, and includes financial covenants related to liquidity and other financial measures. Innovatus has the right, at its election and until August 9, 2025, to convert up to 20% of the outstanding principal of the Term A Loan into shares of the Company’s common stock at a price per share of $10.00. Innovatus will continue to have the right to exercise a previously disclosed warrant granted to it under the Prior Loan Agreement to purchase 26,042 shares of common stock at a price per share of $14.40 through April 8, 2031. The A&R Loan Agreement contains a Final Fee, which is equal to 4.5% of the initial funding of the agreement and is due on the earliest to occur of (a) the Maturity Date, (b) the acceleration of any Term Loan, and (c) the prepayment of the Term Loans. There is also a contingent non-utilization fee for both the Term D and Term E Loans. If the Company achieves the Term D Milestone and (i) fails to draw the full amount of the Term D Loan during the Term D Draw Period and (ii) fails to notify Collateral Agent, at any time before the date that is four weeks after the Company’s achievement of the Term D Milestone, of the Company’s intent not to draw the full amount of the Term D Loan, a non-utilization fee of $0.9 million, with respect to the Term D Loan shall become due and payable on the earliest of (i) the termination of the Term D Draw Period, (ii) the Maturity Date, (iii) the acceleration of any Term Loan, and (iv) the prepayment in whole of the Term Loans. If the Company achieves the Term E Milestone and (i) fails to draw the full amount of the Term E Loan during the Term E Draw Period and (ii) fails to notify Collateral Agent, at any time before the date that is four weeks after the Company’s achievement of the Term E Milestone, of the Company’s intent not to draw the full amount of the Term E Loan, a non-utilization fee of $1.5 million with respect to the Term E Loan shall become due and payable on the earliest of (i) the termination of the Term E Draw Period, (ii) the Maturity Date, (iii) the acceleration of any Term Loan, and (iv) the prepayment in whole of the Term Loans. After the 18-month anniversary of the Effective Date, the Company shall have the option to prepay all, but not less than all, of the Term Loans advanced by the Lenders under the A&R Loan Agreement, provided the Company (i) provides written notice to Collateral Agent of its election to prepay the Term Loans at least seven Business Days prior to such prepayment, and (ii) pays to Lenders on the date of such prepayment, payable to each Lender in accordance with its respective Pro Rata Share, an amount equal to the sum of (A) all outstanding principal of the Term Loans plus accrued and unpaid interest thereon through the prepayment date, (B) the Final Fee, (C) the Prepayment Fee, plus (D) all other outstanding Obligations that are due and payable, including, without limitation, Lenders’ Expenses and interest at the Default Rate with respect to any past due amounts. At May 30, 2024, the Company recognized the Final Fee of $4.5 million as additional debt principal and a corresponding debt discount to be amortized over the life of the loan. 20 In connection with the funding of each of the Term C Loan, the Term D Loan, the Term E Loan and the Term F Loan, the Company agreed to issue to Innovatus and Oxford warrants to purchase that number of shares of the Company’s common stock equal to 2.5% of the principal amount of the applicable Term Loan divided by the exercise price, which shall, with respect to the Term C Loan, be equal to the lower of (i) the volume weighted average closing price of the Company’s common stock for the five-trading day period ending on the last trading day immediately preceding the execution of the A&R Loan Agreement or (ii) the closing price on the last trading day immediately preceding the execution of the A&R Loan Agreement. Accordingly, on May 30, 2024, the Company issued 103,876 warrants with an exercise price of $14.84 per share. The relative fair value of the warrants was approximately $1.2 million. For the additional Term Loans, the exercise price will be based on the lower of (i) the exercise price for the Warrants issued pursuant to the Term C Loan or (ii) the volume weighted average closing price of the Company’s common stock for the five-trading day period ending on the last trading day immediately preceding the applicable Term Loan funding. The Warrants may be exercised on a cashless basis and are exercisable through the tenth anniversary of the applicable funding date. The number of shares of common stock for which each Warrant is exercisable and the associated exercise price are subject to certain proportional adjustments as set forth in such Warrant. On May 13, 2025, we entered into the First Amendment (the “First Amendment”) to the A&R Loan Agreement, pursuant to which we agreed to (i) pay Oxford an amendment fee of $40,000 on the effective date of the First Amendment, (ii) extend to March 9, 2026 the expiration date of Innovatus’ right to convert up to 20% of the outstanding principal of the Term A Loan into shares of the Company’s common stock at a price per share of $10.00, (iii) extend the expiration date of the Term D Draw Period to the earlier of (x) August 31, 2025 and (y) the occurrence of an Event of Default (as defined in the A&R Loan Agreement), (iv) update the liquidity covenant to increase the Minimum Liquidity Percentage (as defined in the First Amendment) to 50% if we fail to achieve the Term D Milestone prior to June 1, 2025 and to decrease the Minimum Liquidity Percentage back to 30% if we subsequently achieve the Term D Milestone prior to the end of the Term D Draw Period, and (v) release Innovatus and the Lenders from any and all claims arising out of or related to the A&R Loan Agreement, the First Amendment and related documentation. We expect that our research and development and general and administrative expenses will increase as we continue to develop gedatolisib, conduct the VIKTORIA-1 Phase 3 clinical trial, the CELC-G-201 Phase 1b/2 trial, and the VIKTORIA-2 Phase 3 clinical trial, 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. We expect to use cash on hand, together with the funds received or to be 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 expenses. Based on our current business plan, we believe that our current cash, cash equivalents and short-term investments together with available borrowings under the Innovatus Loan Agreement will provide sufficient cash to finance our clinical development program activities through 2026. Our expectations as to how long our current capital resources will be sufficient to fund our operations are based on assumptions that may not be accurate, and we could use our current capital resources sooner than we currently expect. In addition, we may seek to raise additional capital to finance capital expenditures and operating expenses over the next several years as we launch our integrated therapeutic and companion diagnostic strategy and expand our infrastructure, commercial operations and research and development activities, and to take advantage of financing or other opportunities that we believe to be in the best interests of the Company and our stockholders. Additional capital may be raised through the sale of common or preferred equity or convertible debt securities, entry into debt facilities or other third-party funding arrangements. The sale of equity and convertible debt securities may result in dilution to our stockholders and those securities may have rights senior to those of our common shares. Agreements entered into in connection with such capital raising activities could contain covenants that would restrict our operations or require us to relinquish certain rights. Additional capital may not be available on reasonable terms, or at all. 21 Cash Flows The following table sets forth the primary sources and uses of cash for the three months ended March 31: March 31, 2025 2024 (in thousands) Net cash (used in) provided by: Operating activities $ (35,853 ) $ (17,068 ) Investing activities 24,262 3,536 Financing activities 5,554 14,084 Net (decrease) increase in cash and cash equivalents $ (6,037 ) $ 552 Operating Activities Net cash used in operating activities was approximately $35.9 million for the three months ended March 31, 2025 and consisted primarily of a net loss of approximately $37.0 million and working capital changes of $1.2 million, partially offset by non-cash expense items of approximately $2.3 million. Non-cash expense items of approximately $2.3 million primarily consisted of $2.4 million of stock-based compensation expense, partially offset by net non-cash interest of $0.1 million. The approximately $1.2 million of working capital changes was primarily due to an increase in other current assets and amortization of debt issuance costs and discount, partially offset by increases in accrued expenses and accounts payable. Net cash used in operating activities was approximately $17.1 million for the three months ended March 31, 2024 and consisted primarily of a net loss of approximately $21.6 million, partially offset by working capital changes of $2.8 million and non-cash expense items of approximately $1.7 million. Non-cash expense items of approximately $1.7 million primarily consisted of $1.3 million of stock-based compensation expense and net non-cash interest of $0.4 million. The approximately $2.8 million of working capital changes was primarily due to increases in accrued expenses and accounts payable and a decrease in other current assets. Investing Activities Net cash provided by investing activities for the three months ended March 31, 2025 was approximately $24.3 million and consisted primarily of net proceeds from short-term investments in government securities (U.S. Treasury Bills and U.S. government securities), partially offset by purchases of property and equipment. Net cash provided by investing activities for the three months ended March 31, 2024 was approximately $3.5 million and consisted primarily of net proceeds from maturities of short-term investments in government securities (U.S. Treasury Bills), partially offset by $0.1 million purchases of property and equipment. Financing Activities Net cash provided by financing activities for the three months ended March 31, 2025 was approximately $5.6 million and primarily consisted of net proceeds from the exercise of 695,650 common stock warrants at an exercise price of $8.05. Net cash provided by financing activities for the three months ended March 31, 2024 was approximately $14.1 million and primarily consisted of proceeds from the exercise of common stock warrants and the exercise of employee stock options, slightly offset by payments for secondary registration costs. Recent Accounting Pronouncements From time-to-time new accounting pronouncements are issued by the Financial Accounting Standards Board or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed in Note 2 to our unaudited condensed financial statements included in Item 1 of Part I of this Quarterly Report, we believe that the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption. 22 Critical Accounting Policies and Use of Estimates Our management’s discussion and analysis of financial condition and results of operations is based on our unaudited condensed financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported expenses during the reporting periods. These items are monitored and analyzed by us for changes in facts and circumstances, and material changes in these estimates could occur in the future. We base our estimates on historical experience and on various other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities that are not readily apparent from other sources. Changes in estimates are reflected in reported results for the period in which they become known. Actual results may differ materially from these estimates. Our significant accounting policies are more fully described in Note 2 to our unaudited condensed financial statements included in Item 1 of Part I of this Quarterly Report. Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Such forward-looking information is included in this Quarterly Report and in other materials filed or to be filed by us with the SEC (as well as information included in oral statements or other written statements made or to be made by us). Forward-looking statements include all statements based on future expectations. This Quarterly Report contains forward-looking statements that involve risks and uncertainties including, but not limited to, (i) our clinical trial plans and the estimated timelines and costs for such trials; (ii) our plans to develop and commercialize our products, and our expectations about the market opportunity for gedatolisib and our ability to serve that market; (iii) our expectations with respect to our competitive advantages, including the potential efficacy of gedatolisib in various patient types alone or in combination with other treatments; (iv) our expectations regarding the timeline of patient enrollment and results from clinical trials, including our ongoing Phase 3 VIKTORIA-1 clinical trial, ongoing Phase 3 VIKTORIA-2 clinical trial, and ongoing Phase 1b/2 clinical trial for gedatolisib; (v) our expectations regarding our ability to obtain FDA approval to commercialize gedatolisib; (vi) our expectations regarding governmental laws and regulations affecting our operations, including, without limitation, developments in laws and regulations or their interpretation, including, among others, changes in tax laws and regulations internationally and in the U.S. and laws that affect our operations and our laboratory; (vii) our expectations with respect to the development, validation, required approvals, costs and timelines of our drug candidate gedatolisib; (viii) our beliefs related to the potential benefits resulting from Breakthrough Therapy designation for gedatolisib; (ix) our plans with respect to research and development and related expenses for the foreseeable future; (x) our beliefs about our ability to capitalize on the exclusive global development and commercialization rights obtained from our license agreement with Pfizer with respect to gedatolisib; (xi) our expectations regarding the future payments that may be owed to Pfizer under the license agreement with them; (xii) our beliefs with respect to the potential rate and degree of market acceptance, both in the United States and internationally, and clinical utility of gedatolisib; (xiii) our revenue expectations; (xiv) our expectations regarding business development activities, including collaborations with pharmaceutical companies; (xv) our plans with respect to pricing in the United States and internationally, and our ability to obtain reimbursement for our drug candidate, gedatolisib, including expectations as to our ability or the amount of time it will take to achieve successful reimbursement from third-party payors, such as commercial insurance companies and health maintenance organizations, and from government insurance programs, such as Medicare and Medicaid; (xvi) our expectations as to the use of proceeds from our financing activities; (xvii) our expectations with respect to availability of capital, including accessing our current debt facility or any other debt facility or other capital sources in the future, and our assumption that we will have adequate authorized shares for future equity issuances; (xviii) our beliefs regarding the adequacy of our cash on hand to fund our clinical trials, capital expenditures, working capital, and other general corporate expenses, as well as the increased costs associated with being a public company; (xix) our plans with respect to potentially raising capital; and (xx) our expectations regarding our ability to obtain and maintain intellectual property protection for our product candidates, including our gedatolisib drug candidate and our CELsignia platform and tests. In some cases, you can identify forward-looking statements by the following words: “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. 23 These statements involve known and unknown risks, uncertainties and other factors that may cause our results or our industry’s actual results, levels of activity, performance or achievements to be materially different from the information expressed or implied by these forward-looking statements. Certain risks, uncertainties and other factors include, but are not limited to, our limited operating history; our potential inability to develop, validate and commercialize gedatolisib on a timely basis or at all; the uncertainties and costs associated with clinical studies and with developing and commercializing biopharmaceuticals; the complexity and difficulty of demonstrating the safety and sufficient magnitude of benefit to support regulatory approval of gedatolisib and other products we may develop; challenges we may face in developing and maintaining relationships with pharmaceutical company partners; the uncertainty and costs associated with clinical trials; the uncertainty regarding market acceptance by physicians, patients, third-party payors and others in the medical community, and with the size of market opportunities available to us; 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; tightening credit markets and limitations on access to capital; stock market volatility or other factors that may affect our ability to access capital on favorable terms or at all; 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 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, 2024 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. You should read the cautionary statements made in this Quarterly Report as being applicable to all related forward-looking statements wherever they appear in this Quarterly Report. We cannot assure you that the forward-looking statements in this Quarterly Report will prove to be accurate. Furthermore, if our forward-looking statements prove to be inaccurate, the inaccuracy may be material. You should read this Quarterly Report completely. Other than as required by law, we undertake no obligation to update these forward-looking statements, even though our situation may change in the future. ITEM 3. Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, we are not required to provide disclosure pursuant to this item.