Greetings, ladies and gentlemen, and welcome to the Celcuity Release of First Quarter 2021 Financial Results. [Operator Instructions] It is now my pleasure to introduce your host, Mr. Robert Uhl with Westwicke Investor Relations. Thank you, sir. You may begin.

Thank you, operator. Good afternoon, everyone, and welcome to Celcuity's First Quarter 2021 Financial Results Webcast and Conference Call. Thank you for joining us. Earlier today, Celcuity released financial results for the first quarter ended March 31, 2021. The press release can be found on the Investors section of our website. Joining me on the call today are Brian Sullivan, Celcuity's Chief Executive Officer and Co-Founder; and Vicky Hahne, Chief Financial Officer. 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. With that, I'd like to turn the call over to Brian Sullivan, Celcuity's CEO.

Thank you, Robert. Good afternoon, everyone, and thank you for joining us today. As always, we appreciate your continued support of Celcuity. On this call, we'll update you on our first quarter results and other business activities, focusing in particular on our strategic licensing agreement with Pfizer to develop and commercialize gedatolisib, recently reported encouraging clinical trial data for gedatolisib and an update on our clinical trial collaborations. Vicky will follow up my comments with a discussion of our financial results, and then we'll open up the line for questions. We have had a few busy months recently. We entered into a worldwide exclusive license agreement with Pfizer to develop and commercialize gedatolisib, a first-in-class PI3K/mTOR inhibitor. We raised approximately $43 million in equity and debt. We signed clinical trial collaborations with Novartis, Pfizer and Puma. And we presented compelling clinical and nonclinical data for gedatolisib. Obtaining the exclusive license for gedatolisib from Pfizer is a transformational strategic step for Celcuity, taking on the responsibility for the clinical development of a targeted therapy, builds off the research we've conducted over the past few years using our CELsignia platform. Our unique ability to assess the dynamic activity of signaling pathways in live patient tumor cells gives us proprietary insights into cancer drivers not available from molecular assessments. Our research to identify various breast cancer disease mechanisms led us to focus on one of the most complex pathways linked to breast cancer, PI3K/mTOR. Our findings reveal that many breast cancer tumors have dysregulated PI3K pathways despite lacking PI3K-alpha mutations. Our research also found evidence of the importance of inhibiting all Class I PI3K isoforms in patients with PI3K-alpha mutations. We subsequently evaluated various PI3K inhibitors using our CELsignia platform in live patient tumor cells and found that gedatolisib's unique mechanism of action…

Thank you, Brian. Our first quarter net loss was $2.79 million or $0.25 per share compared to $2.25 million net loss or $0.22 per share for the first quarter of 2020. 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 $2.34 million or $0.21 per share for the first quarter of 2021 compared to non-GAAP adjusted net loss of $1.78 million or $0.17 per share for the first quarter of 2020. R&D expenses increased by approximately $0.39 million during the first quarter of 2021 compared to the first quarter of 2020 due to $0.06 million increase in compensation expense. In addition to that, other research and development expenses, $0.33 million due to clinical validation and laboratory studies and operational and business development activities. The approximately $0.09 million increase in G&A during the first quarter of 2021 compared to the first quarter of 2020 was primarily due to $0.08 million increase in professional fees associated with being a public company and director and officer insurance. We ended the quarter with approximately $34.9 million of cash and cash equivalents. This includes the proceeds from a successful follow-on offering of nearly 2 million shares of common stock that raised gross proceeds of approximately $27.6 million. The net cash used in operating activities for the first quarter of 2021 was $2.52 million. This was a result of non-GAAP adjusted net loss of $2.34 million and $0.28 million of working capital changes in prepaid assets and accrued expenses, offset by depreciation expense of $0.1 million. In April, we entered into a debt financing agreement with Innovatus Life Sciences Lending Fund I to provide up to $25 million in term loans with the first $15 million tranche funded at closing. We will be able to draw on 2 additional tranches of $5 million each upon the achievement of certain clinical trial and financing milestones. This coincided with the payment of an upfront license fee of $5 million in conjunction with the Pfizer gedatolisib license agreement. Taking into account these 2 events subsequent to the end of the first quarter, we had approximately $44 million of cash on hand. And with that, I'll turn it back to Brian.

Thank you, Vicky. So I'd like to just wrap up before we take questions. We're very excited about the progress we made over the past few months. The license of gedatolisib creates a fantastic potential opportunity to create value for our shareholders. And we're looking forward to updating you as we advance the program, and we also expect to close additional collaborations utilizing the CELsignia platform in the coming quarters. Operator, I'd like to now open up the call for questions.

[Operator Instructions] Our first question comes from the line of Alex Nowak with Craig-Hallum Capital Group.

Brian, to actually pick up on that point that you just mentioned at the end there. So regarding the additional clinical trial collaborations that you would expect to announce later this year, can you just give any hints on what to expect there? Would you expect these trials or these collaborations to be again within earlier late-stage breast cancer? Or would these be the first deals that move into a different cancer type?

We just haven't commented on what we expect really until we kind of are ready to announce the collaboration itself. But we're on track to announce a couple more as we indicated.

Okay. That's great. Understood. And then maybe just an update on all the trials. How is enrollment tracking with the FACT-1 and 2? It sounds like things are going pretty much in line with your expectations as the world starts to reopen here? And then where are you with beginning enrollment on the FACT-3, 4 and 5? Is the trial sites getting set up now? Is that the stage that you're currently in? Just any update there.

Sure. So the FACT-1 and 2 are kind of tracking to what we've described in the past. FACT-3, which we announced in -- or rather FACT-4, a little confusing, which we announced in December, is far less along and getting ready to activate. We expect that to happen this quarter. FACTs 3 and 5, which one was announced in January, one in March, will be on track for activating in the third quarter. All of those studies need to formally get the final aye or be in scientific committee review and filing of INDs with the FDA or IND documentation with the FDA. And so those things are happening as we expected.

That's great. Just going back to the commentary in the press release today, your prepared remarks, and then just going back to my notes a couple of weeks ago on the gedatolisib call, it looks like you now expect the next stage to be a Phase II and III pivotal. And originally, I thought it was just going to be a Phase II. So just curious if the thinking there on the clinical trial need changed in the past couple of weeks?

I think we've always positioned this as a Phase II and III trial and the implication of a Phase III trial is that it's pivotal. I think I've just been using that word interchangeably with what the intent I described earlier. But we think the next step for us, as I indicated, is to get feedback from the FDA. And if the feedback is -- will help us sort through the final design of that trial, but we do think that there's a likelihood that we could position this study as a pivotal registrational study.

That's great. And then since the announcement a couple of weeks ago and then going forward here, have you gotten any more inbounds from pharma regarding about in-licensing other drugs? And then I guess a little bit of a follow-up to that question is on the alternate side. Is pharma reaching out to you realizing what the potential to CELsignia has? And clearly, you are bringing a drug in internally, so you clearly believe that. So is that drawing any more attention from pharma wanting to do collaboration?

Well, I'll make sure to include you on our business development minutes from our meetings, Alex. No, I think 2 things. We're obviously very focused on preparing for the FDA meeting. There's quite a bit of work associated with transitioning gedatolisib from Pfizer to us. There's a lot more to us than just signing an agreement. There's kind of a number of moving pieces. And that's all proceeding at pace. As far as other activities, our immediate focus is to lay the groundwork for the next study for gedatolisib, while also thinking through other potential indications that gedatolisib uniquely be able to investigate. And that could involve collaborations with other pharmaceutical companies. But as everybody knows, those types of collaborations can take a long time to get explored and to get finalized. So we -- again, we -- it hasn't been our history to really provide too much detail on these discussions until we actually have something in hand. And I think that's what we'll continue to do going forward.

Understood. That makes sense. And then just last question. Just any update on when you plan to publish the results from the Phase Ib in a journal or abstract?

Sure. Our goal, our intent, at least, is to be able to present the data at San Antonio Breast Cancer Symposium in December this year.

Our next question comes from the line of Yi Chen with H.C. Wainwright.

This is Boobalan dialing in for Yi Chen. Just real quick. How do you expect the R&D cost to evolve for the remainder of the year?

We've provided guidance on our diagnostic-related expenses. And I think we indicated that our net cash consumption would be roughly $2.5 million to $3 million on that side of the business, and that the therapeutic side of the business would ramp over the next 3 quarters to roughly $4 million of expense by -- that would take you to around the first quarter.

Understood. What are your expectations from the upcoming Phase II HER2-negative breast cancer trial with Sarah Cannon and Pfizer? And when do you expect to complete the enrollment process? And I'm curious why there is an extended period for the data readouts.

On the trial with Sarah Cannon?

Yes.

Well, it's a late-stage trial and the enrollment for trials like that, especially in a third line setting. So these are patients who failed a couple of lines of therapy can take a significant period of time. I think we're trying to be conservative and when we think these patients could be enrolled. And certainly, if it happens faster, we would announce the results in line with that.

Our next question -- excuse me. [Operator Instructions] Our next question comes from the line of Matt Phipps with William Blair.

Just I guess a little bit of a follow-up and to clarify wording. Do you envision a pivotal Phase II trial or a Phase II that has a transition to a Phase III after maybe some interim like safety run-in or kind of ORR or something like that?

Yes. Those are the types of questions that we'll be discussing with the FDA. And so I'm wanting to communicate that we will be exploring different options with the FDA that could include a pivotal study, but we want to get that feedback and understand kind of what the design implications would be. But we think it makes sense to consider a pivotal study, but we want to make sure we get the appropriate feedback before we commit to any particular design or approach.

Okay. Yes, that makes sense. And then I guess as far as timing for some of those additional indications, you guys showed some treatment data with the HER2 biosimilar. You mentioned the endometrial trial. Does that kind of just comes after you get this? I mean you've got enough on your plate getting the pivotal trial kicked off. And then maybe after that, we hear about some of the other opportunities?

Exactly. I think in this case, we want to make sure we do the transition effectively, and we want to make sure we lay the groundwork for the study effectively and get it off the ground. And -- but at the same time, in the background, start to explore and think through some of the data that's been generated to date with gedatolisib and other drugs that have explored PI3K inhibitors. We think gedatolisib has, as we've discussed, the unique mechanism that suits it well, particularly potentially for diseases that involve endocrine pathways. There's, I think, a strong suggestion about the linkage between the estrogen or endocrine pathway of CDK4/6 in the case of breast cancer and PI3K/mTOR. There have also been suggestions in the literature about the involvement of PI3K/mTOR pathway and other cancers that involve endocrine drivers. And so that -- those types of tumors would be the ones areas that we would want to investigate internally and incorporate as we complete our analysis into future life cycle development.

Ladies and gentlemen, at this time, there are no further questions. I would like to turn the floor back to Brian Sullivan for closing comments.

Well, everyone, thank you for participating in our call. If you have additional questions, I'm happy to chat with you. I hope you have a good evening. Goodbye.

Thank you. Ladies and gentlemen, this concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.