Cyclacel Pharmaceuticals, Inc. (CYCC) Q4 2023 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals significant financial and operational challenges, including a limited cash runway, clinical program delays, and increased net loss. The Q&A section highlights management's lack of clarity on funding strategies and operational timelines, adding to uncertainties. Despite some positive developments, such as upcoming biomarker data disclosure, the overall sentiment remains negative due to these substantial risks and uncertainties.
Key Financial Performance
Pro-forma cash and cash equivalents $6.3 million (decrease from $18.4 million as of December 31, 2022) due to cash burn and operational expenses.
Cash and cash equivalents $3.4 million (decrease from $18.4 million as of December 31, 2022) due to cash burn and operational expenses.
Net cash used in operating activities $16.1 million for the 12 months ended December 31, 2023 (decrease from $20.8 million for the same period of 2022) due to reduced operational costs.
Research and development (R&D) expenses $3.5 million for Q4 2023 and $19.2 million for the full year 2023 (decrease from $6.7 million for Q4 2022 and $20.3 million for the full year 2022) due to a decrease in clinical trial costs, offset by an increase in manufacturing and other non-clinical expenditures.
R&D expenses related to fadra $2.7 million for Q4 2023 and $13.4 million for the full year 2023 (decrease from $5.3 million for Q4 2022 and $14 million for the full year 2022) due to a decrease in clinical trial costs, offset by an increase in manufacturing and other non-clinical expenditures.
R&D expenses related to plogo $0.7 million for Q4 2023 and $5 million for the full year 2023 (decrease from $1.3 million for Q4 2022 and $5.5 million for the full year 2022) due to a decrease in manufacturing and other non-clinical expenditures.
General and administrative expenses $1.9 million for Q4 2023 and $6.7 million for the full year 2023 (decrease from $2.1 million for Q4 2022 and $7.4 million for the full year 2022) due to a decrease in professional fees.
Total other income (net) Expense of $0.3 million for Q4 2023 and expense of $0.1 million for the full year 2023 (compared to an expense of $0.2 million and income of $1.7 million for the same period of the previous year) due to a decrease in royalty income.
United Kingdom research and development tax credits $0.4 million for Q4 2023 and $3 million for the full year 2023 (decrease from $1.6 million for Q4 2022 and $4.7 million for the full year 2022) directly correlated to qualifying research and development expenditure.
Net loss $5.3 million for Q4 2023 and $22.6 million for the full year 2023 (compared to $7.4 million for Q4 2022 and $21.2 million for the full year 2022) primarily due to reduced operational costs.
Operating Highlights
Fadraciclib (fadra) Progress: Cyclacel is advancing its CDK2/9 inhibitor, fadraciclib, with a focus on a precision medicine approach targeting patients with chromosomal abnormalities. The recommended Phase 2 dose has been established, and the company is set to begin the Phase 2 proof-of-concept study.
Plogosertib (plogo) Update: The company has paused the 140-101 study of plogosertib to develop an alternative salt formulation, which may enhance dosing efficacy. Early evidence of anti-cancer activity has been observed.
Market Positioning for Fadraciclib: Cyclacel aims to address unmet medical needs in cancer populations with specific chromosomal abnormalities, which are prevalent in various solid tumors and T-cell lymphomas.
Cash Position: As of December 31, 2023, Cyclacel reported pro-forma cash and cash equivalents of $6.3 million, with an estimated cash runway into Q2 2024.
R&D Expenses: R&D expenses for 2023 were $19.2 million, a decrease from $20.3 million in 2022, reflecting reduced clinical trial costs.
Strategic Focus: Cyclacel is focusing on precision medicine and specific patient cohorts for its clinical studies, particularly for fadraciclib.
Risk or Challenges
Financial Risks: As of December 31, 2023, Cyclacel's cash and cash equivalents totaled $3.4 million, a significant decrease from $18.4 million in 2022. The company estimates that its available cash will fund currently planned programs only into the second quarter of 2024, indicating potential liquidity issues.
Regulatory Risks: The company is pausing the 140-101 study of plogosertib due to the need for a new formulation, which may delay progress and affect timelines for clinical trials.
Market Risks: The company faces competitive pressures in the oncology market, particularly with the development of fadraciclib, as there is significant industry interest in cancer treatments targeting chromosomal abnormalities.
Operational Risks: The company has experienced a decrease in research and development expenses, which may impact the pace of clinical trials and product development.
Clinical Risks: The Phase 1 data for fadraciclib is limited and cannot be generalized, which poses a risk in the Phase 2 proof-of-concept study outcomes.
Guidance & Outlook
Clinical Development of Fadraciclib: Cyclacel is advancing its CDK2/9 inhibitor, fadraciclib, with a focus on a precision medicine approach targeting patients with chromosomal abnormalities. The company is set to start the Phase 2 proof-of-concept part of the 065-101 study.
Key Data Readouts: Two key data readouts for fadraciclib are expected this year: final data from the dose escalation part of the 065-101 study and initial clinical activity from the Phase 2 proof-of-concept part.
Plogosertib Development: Cyclacel has paused the 140-101 study of plogosertib to develop an alternative salt formulation, with plans to resume once the new formulation is available.
Cash Position: As of December 31, 2023, Cyclacel reported pro-forma cash and cash equivalents of $6.3 million, which includes $2.9 million of UK R&D tax credits. The company estimates that its available cash will fund planned programs into the second quarter of 2024.
R&D Expenses: R&D expenses for the year ended December 31, 2023, were $19.2 million, a decrease from $20.3 million in 2022, reflecting reduced clinical trial costs.
Net Loss: The net loss for the year ended December 31, 2023, was $22.6 million, compared to $21.2 million in 2022.
Shareholder Return Plan
Share Repurchase Program: None
Key Q&A
Earnings Word Cloud
CYCC Transcript
The earnings report shows positive signs such as reduced R&D expenses, net loss, and increased cash position. However, risks like limited cash resources beyond Q4 2024, decreased UK R&D tax credits, and competitive pressures balance these positives. The Q&A session revealed unclear management responses, adding to uncertainties. Given these mixed signals, the stock price is expected to remain neutral in the short term.
The earnings call highlights financial sustainability risks with limited cash runway, potential enrollment challenges, and paused studies indicating strategic or resource issues. Despite some positive elements like reduced losses and upcoming data presentations, the financial instability and dependency on uncertain clinical outcomes weigh heavily. Analysts' questions revealed no management evasiveness, but the lack of strong positive catalysts or partnerships, combined with financial and operational risks, suggests a negative sentiment, likely resulting in a stock price decline of -2% to -8%.
The earnings call reveals significant financial and operational challenges, including a limited cash runway, clinical program delays, and increased net loss. The Q&A section highlights management's lack of clarity on funding strategies and operational timelines, adding to uncertainties. Despite some positive developments, such as upcoming biomarker data disclosure, the overall sentiment remains negative due to these substantial risks and uncertainties.
CYCC Report
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