Good afternoon, and welcome to the Celcuity First Quarter 2022 Financial Results and Corporate Update Conference Call. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Robert Uhl with ICR Westwicke. Please go ahead.

Thank you, operator. Good afternoon, everyone, and welcome to Celcuity's First Quarter 2022 Financial Results and Business Update Webcast and Conference Call. Thank you for joining us. Earlier today, Celcuity Inc. released financial results for the first quarter ended March 31, 2022. 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; Vicki Hahne, Chief Financial Officer; as well as Igor Gorbatchevsky, Chief Medical Officer, who will be available during Q&A. 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 turn the call over to Brian Sullivan, Celcuity's CEO.

Thank you, Robert, and 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 financial results and key activities over the next few months. In particular, we'll review the financing transaction we announced this morning and the status of the clinical development program and pivotal Phase III trial design for gedatolisib. Today, we announced that we entered into a definitive securities purchase agreement with a premier group of biopharmaceutical investors in a private placement that is expected to result in aggregate proceeds to Celcuity of $100 million. Venrock Healthcare Capital Partners is the lead investor. Commodore Capital, New Enterprise Associates, RA Capital Management, Soleus Capital and I are also participating. Investors will purchase shares of common stock and preferred stock at a price per share of $5.75, which is on an as converted to common stock basis. For each share of common stock and each 1/10 of a share of preferred stock purchase, investors will receive a warrant initially exercisable for preferred stock equivalent to 0.4 shares of common stock on an as-converted basis. The exercise price of the warrants will be at a 40% premium to the price paid by investors for the initial shares of common stock purchased in the private placement. The preferred stock will be convertible into common stock at the holder's election, subject to certain limitations such as beneficial ownership and the approval by the company's stockholders to increase the number of authorized shares of common stock sufficient to cover the shares of common stock issuable. The warrants are initially exercisable for preferred stock and will convert into warrants to purchase common stock if the proposed increase in the company's authorized common stock is approved by…

Thank you, Brian, and good afternoon, everyone. I'll provide a brief overview of our financial results for the first quarter of 2022 and I invite you to review the 10-Q, which will be filed today for a more detailed discussion. Our first quarter net loss was $7.9 million or $0.53 per share compared to $2.8 million net loss or $0.25 per share for the first quarter of 2021. Because these quarterly net losses include significant noncash items, including stock-based compensation and interest, we also include in our press release non-GAAP adjusted net loss for the quarter ending March 31, 2022. Our non-GAAP adjusted net loss was $7 million or $0.47 per share for the first quarter of 2022 compared to non-GAAP adjusted net loss of $2.3 million or $0.21 per share for the first quarter of 2021. R&D expenses were $6.7 million for the first quarter of 2022 compared to $2.2 million for the first quarter of 2021. The approximately $4.5 million increase during the first quarter of 2022 compared to the first quarter of 2021 resulted primarily from the development of gedatolisib. Employee-related expenses, including consulting fees, accounted for $1.6 million, including $0.2 million in noncash stock-based compensation. The remaining increase of $2.9 million is related to costs for existing clinical trials and for activities supporting the initiation of the VIKTORIA-1 pivotal trial. General and administrative expenses were $0.8 million for the first quarter of 2022 compared to $0.6 million for the same period in 2021. The approximately $0.2 million increase in G&A during the first quarter of 2022 compared to the first quarter of 2021 arose primarily from employee-related expenses, including $0.1 million in noncash stock-based compensation. Net cash used in operating activities for the first quarter of 2022 was $5.9 million compared to $2.5 million for the first quarter of 2021. This was a result of non-GAAP adjusted net loss of $7 million, offset by working capital changes of approximately $1 million and depreciation expense of $0.1 million. We ended the quarter with approximately $78.3 million of cash and cash equivalents compared to cash and cash equivalents of $84.3 million on December 31, 2021. Today, as Brian mentioned earlier, we entered into a securities purchase agreement with investors via a pipe, for gross proceeds of $100 million. The funding will occur in conjunction with the date that a patient enrolled in VIKTORIA-1 received their first dose of treatment. Including the additional proceeds from the pipe, we expect our cash will support our activities through the back half of 2025. I will now hand the call back to Brian.

Thank you, Vicky. We believe gedatolisib has great potential to provide more effective treatment for women with breast cancer as well as other cancers in the future. And we've built an incredibly talented team of drug developers with deep experience in guiding drug candidates through pivotal Phase III clinical trials. We're hopeful this will represent the first of many opportunities for us to impact the lives of cancer patients. Operator, I'd like now to open the call for questions.

[Operator Instructions] The first question comes from Maury Raycroft of Jefferies.

Congrats on the update. To start off, just wondering if you could talk more about progress you've made with preparation to get the Phase III started in the middle of '22. And you mentioned potential for 175 sites in 15 countries. Can you talk more about the plan for site rollout on a country-by-country basis?

Sure. Maury, so our preparation is on track. We are laying the groundwork to be able to initiate the study in the next few months and then the begin enrollment activities once the sites are activated. We'll focus initially on countries in U.S. and Asia, which can have shorter regulatory time lines and then move out to the rest of Europe. And so as is the case with any of these studies, the sites roll out over a fairly extended period of time. We've incorporated that site rollout time line in our enrollment projections, and our determination of when we expect to get primary analysis in the second half of 2024.

Got it. And maybe just a quick follow-up on that one. Getting that first patient dose, is that going to be in the U.S.? Or do you think it could be at an Asia site?

Most likely the U.S.

Okay, okay. And then with the new financing, just wondering if you can clarify if you'll invest in developing gedatolisib outside of the Phase III. And I think on the last call, you mentioned a potential life cycle development update in the first half of '22. I'm just wondering if you could talk more about that.

Sure. So the financing was -- we think a great event for us because it certainly beefs up our balance sheet, provides flexibility. It allows us to have some margin for error, which I think in this environment, everybody is looking for. But it also allows us to think about the next steps in other indications. And it's possible to initiate Phase Ib studies in a relatively small scale that can be hypothesis confirming or not, but essentially allow you to generate data in different indications. And so this funding will allow us to begin that type of work as well.

Got it, okay. And that could start this year potentially? Or is that something we wait to learn more about next year?

Just we haven't provided details on that. And as far as the life cycle development plan, just with this financing and with the focus on the Phase III, we'll probably provide life cycle update closer to sometime in the third quarter.

The next question comes from Gil Blum of Needham & Company.

I'd like to extend my congratulations on the successful financing. First of all, just to make sure I heard this correctly. So time line for the pivotal data is now second half '24 and full data in first half of '25, did I get that right?

Well, the -- we have 2 primary analyses. So we'll have the primary analysis for the PIK3CA wild-type patients, patients who lack mutations in second half of '24. And then separate primary endpoint data for patients with PIK3CA mutations in the first part of 2025.

Okay, thanks for the clarification. I know this is going to get a little -- so just from the cash runway perspective, it seems that you have run all the way through this readout? Does that leave you with sufficient cash for strategic optionality after the first readout?

Well, we are -- we plan to have cash in excess of what's needed to achieve our first primary readout. But obviously, one of the purposes of the cash is just to make sure we are -- have sufficient cash to handle bumps in the road. Not that we're anticipating them, but just, again, we want to have a robust balance sheet. And once we have the primary analysis, it's as favorable as we hope, we would likely have a variety of options that we could consider.

Okay, that makes sense. And then maybe a last one, I know this is relatively unlikely. Does this financing limit, in any way, strategic options for monetization of future revenues and get that enlisted?

No, this is -- no, no. This is the financing that will end up with the issuance of what will ultimately be common shares and there's no restrictions or other strengths associated with it. So it doesn't create any restrictions on our ability to make decisions in the future.

[Operator Instructions] The next question comes from Alex Nowak of Craig-Hallum Capital Group.

This is Connor [ph] on for Alex. I guess, first, a couple of weeks back, the FDA had a discussion or a meeting on PI3K trials kind of happening around the country. And it seemed pretty obvious that the meeting was kind of only applicable to hematological drugs. And the outcome of the meeting was really requiring a trial design like yours. But I guess, is there any sort of read-through to data from that meeting?

No, thanks for the question. So that meeting was very explicitly focused on a particular class of PI3K drugs, delta inhibitors that are designed and intended for hematological indications. And the focus of the meeting was around the regulatory pathway, accelerated approval that those drugs had used to initially get approved for marketing. One of the obligations associated with an accelerated approval is doing a follow-on randomized study to confirm the findings. I don't think any of those drugs had done confirmatory studies. And so I think the agency was highlighting a concern that these drug companies haven't followed through with their commitments that are embedded in the accelerated approval process. Those drugs also have a different safety profile than our drug, and those -- a variety of other factors. But really our drug -- or alpelisib, which is the PSK-alpha inhibitor that's approved for breast cancer, those -- our drugs weren't part of that conversation. And the reason is that we're pursuing a normal regulatory path for approval for this indication, and we're doing a randomized study. And those -- none of those drugs met those conditions. They did accelerated approvals with single-arm studies.

Sure. Okay, all right. That makes sense. And then I guess on CELsignia side, can we expect any updates here this year on upcoming collaborations and things like that? Or does the focus really remain on data for now?

Well, I mean, we have the trials ongoing, and we're continuing to pursue those. We also have studies that we'll be pursuing that combined CELsignia and geda. So that will -- we think something that could be very interesting. And then obviously, the budget that we're spending and the opportunity at hand with gedatolisib, we think is, in the near term, the most significant opportunity we have.

Yes. All that makes perfect sense. And then I guess one for Vicky, just a real quick one. Following the placement announced this morning, I just want to make sure my math is correct. What is the new fully diluted share count?

We'll have those details in the 8-K that will follow -- that we'll be filing later today or tomorrow.

Seeing that there are no further questions, I would like to turn the conference back over to Brian Sullivan for closing remarks.

Great. Well, thank you again for participating in our call today. We'll be at the Craig-Hallum and Jefferies investor conferences in June and hope I have a chance to run into some of you there. If you have any additional questions, please feel free to contact us. Hope everyone has a good evening. Goodbye.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.