Good day, everyone, and welcome to today's Fourth Quarter and Fiscal Year 2020 Financial Results. [Operator Instructions] Please note this call may be recorded. It is now my pleasure to turn today's program over to Mike Cavanaugh, Investor Relations from Westwicke Partners. Please go ahead.

Thank you, operator. Good afternoon, everyone, and thank you for joining us today. Earlier, Celcuity Inc. released financial results for the fourth quarter and full year ended December 31, 2020. The press release can be found on the Investors section of our website. Brian Sullivan, Celcuity's Chief Executive Officer and Co-Founder; and Vicky Hahne, Chief Financial Officer, will host this afternoon's call. Before we begin, I would like to remind listeners that our comments today will include some forward-looking statements. These statements involve a number of risks and uncertainties, which are outlined in today's press release and in our reports and filings with the SEC. Actual events or results may differ materially from those projected in the forward-looking statements. Such forward-looking statements and their implications involve known and unknown risks, uncertainties and other factors that may cause actual results or performance to differ materially from those projected. On this call, we will also refer to non-GAAP financial measures. These non-GAAP measures are used by management to make strategic decisions, forecast future results and evaluate the company's current performance. Management believes the presentation of these non-GAAP financial measures is useful for investors' understanding and assessment of the company's ongoing core operations and prospects for the future. You can find the table reconciling the non-GAAP financial measures to GAAP measures in today's press release. And with that, I'd like to introduce Brian Sullivan, our CEO.

Thank you, Mike. Good afternoon, and thank you, everyone, for joining us today. As always, we appreciate your continued support of Celcuity. On this call, we'll update you on our fourth quarter results, and I'd like to focus particularly on our recent collaboration agreements, the status of our ongoing collaboration discussions of product development projects and an update on the FACT-1 and FACT-2 clinical trials. Vicky will follow my comments with a discussion of our financial results, and then we'll open up the line for questions. Celcuity's third-generation diagnostic platform, CELsignia identifies the underlying cellular activity, dysregulated pathway signaling in the patient's tumor, so that are matching and thus, the most potentially efficacious targeted therapy can be prescribed. Since dysregulated signaling is too complex for molecular test to characterize in most cases, we can leverage the capability of our CELsignia platform to create a proprietary business strategy. Our goal is to help pharmaceutical companies obtain new indications for their targeted therapies to treat the patients, our CELsignia tests are uniquely able to identify. To take a first step towards realizing this goal, we collaborate with pharmaceutical companies to evaluate the efficacy of their targeted therapies in patient populations selected by CELsignia pathway activity test. If successful, these collaborations would represent us critical step towards obtaining a new indication that expands the market for the evaluated targeted therapies. We believe there is a significant unmet need for new therapeutic options for HER2-negative breast cancer patients. Our research suggests that many of these patients have an undiagnosed and untreated disease mechanism. We believe our CELsignia test can identify the disease mechanism for roughly 25% to 35% of these patients and the targeted therapy, most likely to benefit them. Our efforts in this area are gaining momentum. And in just the past 2…

Thank you, Brian. Our fourth quarter net loss was $2.55 million or $0.25 per share compared to $1.81 million net loss or $0.18 per share for the fourth quarter of 2019. Net loss for fiscal year 2020 was $9.47 million or $0.92 per share compared to $7.36 million or $0.72 per share for the same period in 2019. Because these quarterly net losses include a significant noncash item, which is stock-based compensation, we also included in our press release, non-GAAP adjusted net loss for the quarter. Our non-GAAP adjusted net loss was $2.12 million or $0.21 per share for the fourth quarter of 2020, compared to non-GAAP adjusted net loss of $1.45 million or $0.14 per share for the fourth quarter of 2019. Non-GAAP adjusted net loss for fiscal year 2020 was $7.71 million or $0.75 per share compared to non-GAAP adjusted net loss of $6.32 million or $0.62 per share for fiscal year 2019. R&D expenses increased approximately $1.41 million during fiscal year 2020, compared to fiscal year 2019. This was primarily driven by $1.15 million increase in compensation expense which included $0.49 million of noncash stock-based compensation. In addition, other research and development expenses increased $0.26 million due to clinical validation and laboratory studies and other operational and business development activities. The approximately $0.34 million increase in G&A during fiscal year 2020 compared to fiscal year 2019 was primarily due to $0.28 million increase in compensation expense which included $0.24 million of noncash stock-based compensation. In addition, other general and administrative expenses increased $0.06 million, primarily due to professional fees associated with being a public company. We ended the quarter with approximately $11.6 million of cash and cash equivalent. The net cash used in operating activities for the fourth quarter of 2020 was $2.11 million, which was primarily a result of non-GAAP adjusted net loss of $2.13 million. And with that, I'll turn it back over to Brian.

Thank you, Vicky. So in summary, we're extremely pleased with the progress we're making. Our discussions with pharmaceutical companies and clinical sponsors have been successful. And we expect to close additional collaborations beginning in the first half of 2021. We expect to present data for another CELsignia test for breast and ovarian cancer patients in the second quarter of 2021 and we're confident that we'll be able to obtain interim results from the FACT-1 and FACT-2 trials later in 2021 or early 2022. I'd like to open up now for questions. Operator?

[Operator Instructions] Looks like we have a question from Alex Nowak from Craig-Hallum.

Congrats, Brian, on the recent collaboration there with Puma and Pfizer. Can you maybe walk through the trial details such as total patients that you plan to enroll, the number of patients you need to screen to hit the enrollment numbers? And then if the trials are successful, just maybe some of the rough market size calculations upon an expanded indication for those drugs, both to the drug partner and also to Celcuity through test sales?

Okay. Okay. Well, thanks. The trial's primary endpoint is objective response rate. The target enrollment is 23 patients and to obtain that number of patients, we are projecting screening roughly 92 patients overall. So it's 1 in 4 ratio. We expect to get data towards the end of 2022 for that and hopefully activate that sometime in the second quarter. But there's obviously a number of regulatory steps that are required before a trial like this can be activated. These are patients that will have failed other therapies. And the target market in general are metastatic patients, and in this case, patients. There's roughly 100,000 women who are on received drug treatment that are in a metastatic stage. We would consider all of them potentially eligible for our test, if a new drug indication was approved. What we found as we've talked to docs, is that they would like, and in general, like to get as many tests performed as possible when a patient is newly diagnosed with metastatic breast cancer. And they know that some of those results may not be useful or rather actionable immediately. But getting the analysis done upfront gives them an understanding of what might be the optimal course for their patients. And so that is when we would like to insert ourselves in the treatment process. So again, with late stage, it's for charging $5,000 of test, that would -- that would be a $500 million served market for us.

Okay. That's very helpful. And then just maybe all the collaboration so far have been on breast cancer early and late stage. The next deal is in the pipeline that you're looking to close within the first half of this year. Are those also in breast cancer? And then I guess just going beyond the collaborations that you expect to sign either middle or late 2021. Where are you from a mix of cancers on those collaborations? Are they still going to be within breast? Or do we expect to move outside of breast in 2021?

We do expect to move outside of breast. We have discussions in process to evaluate a subpopulation in ovarian cancer. And that 1 would be more in the second half of the year. Again, the ovarian cancer test is neuro tests and you're starting from a dead stop to get those discussions going, but those are moving forward and have confidence we'll have something in place sometime before the end of the year in ovarian cancer.

Do you have anything in the pipeline just internally to Celcuity to come up with a marker for -- specifically for lung cancer?

Well, I think we talked about different solid tumor types, lung cancer is the largest 1 out there. And that's certainly a market of interest to us as colon cancer would be or bladder or -- cancer and the prime ones we would look at.

Okay. So it's fair to say stuff is moving through the internal pipeline at least, okay. Maybe true for the time lines and the FACT-1 and 2, do you need COVID restrictions to change at all or continue to ease to hit those targets? Or if you continue at the current enrollment pace, do you still plan to hinting that late 2021 or early 2022, just curious what needs to change there.

Sure. We're assuming that we don't get another restriction, which occurred later last year. I mean things like very quickly and hospitals reacted quickly as well. And given what's taking place with the vaccinations and what seems to be a dramatic drop in infection rates and hospitalizations, it wouldn't seem likely that COVID-19 will present a problem. At the current rates, I guess, that we're seeing now, the only distraction to be frank, that's present is the vaccination process is actually absorbing more resources than we would expect with some of these sites. So it's -- I wouldn't say 100% gone. But I would say it's restricted to just a few sites at this point. More factor -- things can change. I mean, that's maybe the only comment I'd say is if you had asked me in August, whether we would have expected to see what we saw earlier in the year to happen. I think a lot of people thought maybe we were through the worst of it. I know some are projecting in other ways. But nobody has a good crystal ball for this stuff.

Yes. Totally understand, things are outside control with this regard. And then just I guess last question for me. Since we should have data within a year on FACT-1 and 2, just maybe walk through the next steps after the data release, what are you planning to do immediately after the data release, what the drug sponsor planning are doing to move the combination of the drug and the test forward?

Sure. So the next steps would be to think about the next stage, working with the FDA and understand the registration or the path to get a label expansion for the drugs. And so you typically would coordinate with the FDA and understand what their expectations would be, issue proposals for the trial design. And once that's nailed down and to the extent the FDA requires either additional data, or extension of the existing trial, you pursued accordingly. At that point, the drug company is driving the bus. I mean they're in charge. Our test then becomes part of the process to conduct those trials, our tests would be needed to be performed to select the patients. We would expect at the time that, that process begins to enter into some form of collaboration agreements that involves economics to support our activities. That's been the practice in the past when drug companies are companion diagnostic is typically some form of partnership collaboration agreement, however you want to characterize it. That involves some form of milestone payments along the way, either at the signing or upon completion of a trial or receipt of an approval. And so that's the point of which we expect to start generating revenue, in this case, in the form of partnership revenue. And then upon approval, would convert into initiating generation of test revenue.

Okay. Understood. That's great. Congrats on the good progress here.

That's all the allotted time we have for questions.

Okay. Well, thank you, everyone, for attending. We appreciate your interest.