Celcuity(CELC) - 2025 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION ITEM 1. Financial Statements (unaudited) This section presents the company's unaudited condensed financial statements for the periods ended June 30, 2025, and December 31, 2024 Condensed Balance Sheets Condensed Balance Sheets | Metric (in thousands) | June 30, 2025 | December 31, 2024 | Change ($) | Change (%) | | :-------------------- | :------------ | :---------------- | :--------- | :--------- | | Cash and cash equivalents | $46,354 | $22,515 | $23,839 | 105.9% | | Investments | $122,032 | $212,589 | $(90,557) | -42.6% | | Total current assets | $183,104 | $244,571 | $(61,467) | -25.1% | | Total Assets | $183,592 | $245,123 | $(61,531) | -25.1% | | Total current liabilities | $39,941 | $31,723 | $8,218 | 25.9% | | Total Liabilities | $139,217 | $129,504 | $9,713 | 7.5% | | Total Stockholders' Equity | $44,375 | $115,619 | $(71,244) | -61.6% | Condensed Statements of Operations For the Three Months Ended June 30 | Metric (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Research and development | $40,222 | $22,498 | $17,724 | 78.8% | | General and administrative | $3,787 | $1,786 | $2,001 | 112.0% | | Total operating expenses | $44,009 | $24,284 | $19,725 | 81.2% | | Loss from operations | $(44,009) | $(24,284) | $(19,725) | 81.2% | | Interest expense | $(3,204) | $(2,260) | $(944) | 41.8% | | Interest income | $1,945 | $2,822 | $(877) | -31.1% | | Net loss | $(45,268) | $(23,722) | $(21,546) | 90.8% | | Net loss per share, basic and diluted | $(1.04) | $(0.62) | $(0.42) | 67.7% | For the Six Months Ended June 30 | Metric (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Research and development | $72,449 | $43,145 | $29,304 | 67.9% | | General and administrative | $7,693 | $3,632 | $4,061 | 111.8% | | Total operating expenses | $80,142 | $46,777 | $33,365 | 71.3% | | Loss from operations | $(80,142) | $(46,777) | $(33,365) | 71.3% | | Interest expense | $(6,387) | $(3,661) | $(2,726) | 74.5% | | Interest income | $4,264 | $5,104 | $(840) | -16.5% | | Net loss | $(82,265) | $(45,334) | $(36,931) | 81.5% | | Net loss per share, basic and diluted | $(1.90) | $(1.26) | $(0.64) | 50.8% | Condensed Statements of Stockholders' Equity (2025) - Total Stockholders' Equity decreased from $115,619 thousand to $44,375 thousand at June 30, 2025, primarily due to a net loss of $82,265 thousand[16] Changes in Stockholders' Equity (Six Months Ended June 30, 2025) | Activity (in thousands) | Six Months Ended June 30, 2025 | | :---------------------- | :----------------------------- | | Balance at Dec 31, 2024 | $115,619 | | Stock-based compensation | $5,148 | | Exercise of common stock warrants | $5,600 | | Exercise of common stock options | $20 | | Employee stock purchases | $253 | | Conversion of preferred stock to common stock | $0 | | Net loss | $(82,265) | | Balance at June 30, 2025 | $44,375 | Condensed Statements of Stockholders' Equity (2024) - Total Stockholders' Equity increased to $176,685 thousand at June 30, 2024, driven by proceeds from common stock offerings and warrant exercises, despite a net loss[19] Changes in Stockholders' Equity (Six Months Ended June 30, 2024) | Activity (in thousands) | Six Months Ended June 30, 2024 | | :---------------------- | :----------------------------- | | Balance at Dec 31, 2023 | $139,770 | | Stock-based compensation | $2,742 | | Exercise of common stock warrants | $14,182 | | Exercise of common stock options | $335 | | Employee stock purchases | $131 | | Conversion of preferred to common stock | $0 | | Issuance of common stock in an ATM offering | $7,642 | | Issuance of common stock upon closing of follow-on offering | $56,252 | | Issuance of common stock warrants, note payable | $1,229 | | Net loss | $(45,334) | | Balance at June 30, 2024 | $176,685 | Condensed Statements of Cash Flows Cash Flow Summary | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :-------------------------------- | :----------------------------- | :----------------------------- | :--------- | :--------- | | Net cash used in operating activities | $(72,065) | $(35,135) | $(36,930) | 105.1% | | Net cash provided by (used in) investing activities | $90,118 | $(102,531) | $192,649 | -187.9% | | Net cash provided by financing activities | $5,786 | $137,462 | $(131,676) | -95.8% | | Net change in cash and cash equivalents | $23,839 | $(204) | $24,043 | -11785.8% | Notes to Unaudited Condensed Financial Statements 1. Organization - Celcuity Inc is a clinical-stage biotechnology company focused on developing targeted therapies for solid tumors, with gedatolisib as its lead therapeutic candidate[24] - Gedatolisib is a kinase inhibitor targeting the PI3K/AKT/mTOR (PAM) pathway, designed for comprehensive inhibition of all Class I PI3K isoforms and mTORC1/2[24] - Key clinical trials include Phase 3 VIKTORIA-1, Phase 3 VIKTORIA-2, and Phase 1b/2 CELC-G-201[24] 2. Basis of Presentation, Summary of Significant Accounting Policies and Recent Accounting Pronouncements - The unaudited condensed financial statements are prepared in accordance with SEC regulations and U.S GAAP, relying on management estimates[25][26] - The company faces risks common to development-stage biotech companies, including clinical success, regulatory approval, and the need for additional financing[27] - Clinical trial costs are estimated based on third-party progress reports, with potential for material changes in estimates affecting financial results[29] 3. Net Loss Per Common Share - Basic and diluted net loss per common share are identical because potential common shares were anti-dilutive for all periods presented[30] Anti-Dilutive Securities | Potential Common Shares (in thousands) | June 30, 2025 | June 30, 2024 | | :------------------------------------- | :------------ | :------------ | | Preferred stock (as-if-converted) | 2,131,510 | 3,175,770 | | Options to purchase common stock | 5,075,566 | 3,266,969 | | Warrants to purchase common stock | 4,825,502 | 5,600,234 | | Restricted common stock | 1,029 | 1,079 | | Total anti-dilutive shares | 12,033,607 | 12,044,052 | 4. Investments - The Company's investments are classified as held-to-maturity debt securities, primarily U.S Treasury Bills, reported at amortized cost[32][34] - No credit losses are expected on these securities, as they are guaranteed by the U.S government[32] Investment Portfolio | Investment (in thousands) | Amortized Cost (June 30, 2025) | Estimated Fair Value (June 30, 2025) | Amortized Cost (Dec 31, 2024) | Estimated Fair Value (Dec 31, 2024) | | :------------------------ | :----------------------------- | :----------------------------------- | :---------------------------- | :---------------------------------- | | U.S. Treasury Bills | $122,032 | $122,021 | $212,589 | $212,671 | 5. Commitments - The Company leases its corporate space through April 2026, with rent expense recorded on a straight-line basis[35] - Clinical research study contracts are generally cancelable with notice, and obligations are based on services performed[36] - As of June 30, 2025, the Company had approximately $3.6 million in material non-cancelable contractual commitments[36] 6. Stockholders' Equity - As of June 30, 2025, the Company had 38,914,208 shares of common stock and 213,151 shares of preferred stock outstanding[40] - In March 2025, an investor exercised 695,650 warrants, generating approximately $5.6 million in cash[38] - In June 2025, 104,426 shares of preferred stock were converted into 1,044,260 shares of common stock[40] 7. Stock-Based Compensation - The 2017 Stock Incentive Plan's reserved shares automatically increased by 371,432 on January 1, 2025, and stockholders approved an additional 3,000,000 share increase in May 2025[42][43] - Total unrecognized compensation cost related to stock options and RSAs is estimated at $22.491 million as of June 30, 2025, to be recognized through 2029[52] Stock-Based Compensation Expense | Expense Category (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | | :------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $1,722 | $978 | $3,227 | $1,810 | | General and administrative | $982 | $433 | $1,921 | $932 | | Total Stock-based compensation | $2,704 | $1,411 | $5,148 | $2,742 | 8. Debt - On May 30, 2024, the Company entered into an Amended and Restated Loan and Security Agreement for up to $180 million in Term Loans, with $100 million initially funded[54][55] - The Term Loans mature on May 1, 2029, bear interest at Prime Rate plus 2.85%, and are secured by all Company assets[56] - The A&R Loan Agreement includes a $4.5 million Final Fee, contingent non-utilization fees, and warrants issued to lenders[58][59] Long-term Debt Summary | Long-term Debt (in thousands) | June 30, 2025 | December 31, 2024 | | :---------------------------- | :------------ | :---------------- | | Note payable | $100,000 | $100,000 | | Add: Final fee | $4,500 | $4,500 | | Add: PIK interest | $1,093 | $593 | | Less: unamortized debt issuance costs | $(1,202) | $(1,614) | | Less: unamortized debt discount | $(5,115) | $(5,752) | | Total long-term debt | $99,276 | $97,727 | 9. License Agreement - On April 8, 2021, the Company licensed exclusive global rights for gedatolisib from Pfizer, involving an upfront fee of $5.0 million and $5.0 million in common stock[64] - The agreement includes potential milestone payments up to $335.0 million, with a $5.0 million payment now probable upon FDA New Drug Application filing[65] - Tiered royalties on gedatolisib sales, ranging from low to mid-teens, are also payable to Pfizer[65] 10. Subsequent Events - On July 28, 2025, the A&R Loan Agreement was amended to permit convertible notes issuance and capped call transactions[67] - The Company achieved the Term D Milestone and plans to draw an additional $30.0 million under the Term D Loan in late August 2025[69] - In July 2025, the Company completed an Equity Offering and a Convertible Notes Offering, raising approximately $91.6 million and $194.9 million net, respectively[71][73] - In July and August 2025, investors exercised warrants, generating approximately $10.4 million and $1.6 million in cash, respectively[80] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses financial condition, operational results, clinical developments, and liquidity for the recent period Overview - Celcuity is a clinical-stage biotechnology company developing targeted therapies for solid tumors, with gedatolisib as its lead candidate[82][84] - Gedatolisib's intravenous administration offers a better-tolerated safety profile compared to oral PI3K and mTOR drugs[85][86] - The company is conducting multiple clinical trials: Phase 3 VIKTORIA-1, Phase 3 VIKTORIA-2, and Phase 1b/2 CELC-G-201[82][92][94][99] - The B2151009 Phase 1b trial showed high objective overall response rates (ORR) of 63% and a median progression-free survival (PFS) of 48.6 months for treatment-naïve patients[89][90][91] Recent Developments - A new U.S patent was issued on July 8, 2025, covering gedatolisib's clinical dosing regimen, extending exclusivity into August 2042[102] - Topline data from the VIKTORIA-1 trial showed statistically significant and clinically meaningful improvements in PFS for both gedatolisib regimens[104] - Both gedatolisib regimens in VIKTORIA-1 demonstrated lower rates of hyperglycemia and stomatitis and lower discontinuation rates[105] - The Company expects to submit a New Drug Application (NDA) for gedatolisib to the FDA in the fourth quarter of 2025[106] - In July 2025, the Company completed an Equity Offering and a Convertible Notes Offering, raising approximately $91.6 million and $194.9 million net, respectively[108][109] Results of Operations - The Company has not generated any revenue and incurred a net loss of $82.3 million for the six months ended June 30, 2025, with an accumulated deficit of $354.1 million[110] - The increase in R&D expenses was driven by increased employee/consulting expenses, clinical trial activities, and a $5.0 million anticipated milestone payment to Pfizer[121][122] - Interest expense increased by 74% for the six months ended June 30, 2025, due to incremental funding of Term Loan C in May 2024[126][127] - Interest income decreased by 16% for the six months ended June 30, 2025, due to lower market interest rates and reduced average cash balances[128][129] Operating Expenses (Three Months) | Operating Expense (in thousands) | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Research and development | $40,222 | $22,498 | $17,724 | 79% | | General and administrative | $3,787 | $1,786 | $2,001 | 112% | | Total operating expenses | $44,009 | $24,284 | $19,725 | 81% | Operating Expenses (Six Months) | Operating Expense (in thousands) | 6 Months Ended June 30, 2025 | 6 Months Ended June 30, 2024 | Change ($) | Change (%) | | :------------------------------- | :--------------------------- | :--------------------------- | :--------- | :--------- | | Research and development | $72,449 | $43,145 | $29,304 | 68% | | General and administrative | $7,693 | $3,632 | $4,061 | 112% | | Total operating expenses | $80,142 | $46,777 | $33,365 | 71% | Liquidity and Capital Resources - As of June 30, 2025, the Company had $46.4 million in cash and cash equivalents and $122.0 million in short-term investments[130] - Since inception, the Company has raised approximately $478.7 million from equity sales, $194.9 million from convertible notes, and $100.0 million from loan agreements[131] - Recent financing activities include a July 2025 Equity Offering ($91.6 million net) and a July 2025 Convertible Notes Offering ($194.9 million net)[133][135] - The A&R Loan Agreement provides for up to $180 million in Term Loans, with eligibility to draw an additional $30 million (Term D) and $50 million (Term E)[145][146] - Management believes current cash, investments, and available borrowings will fund operations through 2027[154][155] Cash Flows - Operating cash outflow increased significantly in 2025 due to higher net loss[157] - Investing activities shifted from net cash used in 2024 to net cash provided in 2025 from maturities of investments[158][159] - Financing cash inflow decreased substantially in 2025 compared to 2024, which included significant proceeds from an equity offering and debt financing[160][161] Cash Flow Summary (Six Months) | Cash Flow Activity (in thousands) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(72,065) | $(35,135) | | Net cash provided by (used in) investing activities | $90,118 | $(102,531) | | Net cash provided by financing activities | $5,786 | $137,462 | | Net increase (decrease) in cash and cash equivalents | $23,839 | $(204) | Recent Accounting Pronouncements - The Company believes that recently issued accounting standards not yet effective will not have a material impact on its financial position or results of operations[162] Critical Accounting Policies and Use of Estimates - The preparation of financial statements requires management to make estimates and assumptions that affect reported amounts, with actual results potentially differing materially[163] Private Securities Litigation Reform Act - This section serves as a 'safe harbor' for forward-looking statements, which involve risks and uncertainties that may cause actual results to differ materially[165][167] - Forward-looking statements are identified by words like 'anticipate,' 'believe,' 'expect,' and 'plan,' and are based on management's beliefs and assumptions[166] - Key risks include limited operating history, regulatory approval, clinical study uncertainties, market acceptance, and intellectual property protection[167] ITEM 3. Quantitative and Qualitative Disclosures About Market Risk The company is exempt from market risk disclosures as a smaller reporting company - The Company is exempt from providing quantitative and qualitative disclosures about market risk due to its status as a smaller reporting company[169] ITEM 4. Controls and Procedures Management confirms the effectiveness of disclosure controls and procedures as of the period end - The Certifying Officers concluded that the Company's disclosure controls and procedures were effective as of June 30, 2025[170] - There were no material changes in the Company's internal control over financial reporting during the three months ended June 30, 2025[171] PART II. OTHER INFORMATION ITEM 1. Legal Proceedings The company reports no material legal proceedings - The Company is not a party to any legal proceedings that could reasonably be expected to have a material adverse effect on its business[172] ITEM 1A. Risk Factors Updates on material risks including trade policy, regulatory disruptions, and company indebtedness - Changes in U.S or international trade policies could materially and adversely affect the Company's business and financial condition[174][175][176] - Disruptions at the FDA and other government agencies could hinder the Company's ability to obtain timely approval for product candidates[177][178][179][180] - The Company's indebtedness, including $100.0 million in Term Loans and $201.25 million in Convertible Senior Notes, could limit cash flow and expose it to adverse risks[181][183] - The Company may be unable to raise sufficient funds to repurchase the Notes following a fundamental change or to pay cash amounts due upon maturity[184] ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reports no unregistered sales or issuer purchases of equity securities during the period - There were no unregistered sales of equity securities during the period[186] - There were no issuer purchases of equity securities during the period[187] ITEM 3. Defaults Upon Senior Securities The company reports no defaults upon senior securities - There were no defaults upon senior securities during the period[188] ITEM 4. Mine Safety Disclosures The company has no mine safety disclosures to report - There are no mine safety disclosures to report[189] ITEM 5. Other Information Discloses a 10b5-1 trading plan adopted by Brightstone for the sale of up to 229,335 shares of company common stock - On June 13, 2025, Brightstone adopted a 10b5-1 plan to sell up to 229,335 shares of Celcuity Inc common stock[190] - No other directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter[191] ITEM 6. Exhibits This section lists all exhibits filed with the Quarterly Report on Form 10-Q - Exhibits include the Certificate of Incorporation, Bylaws, Loan Agreements, Stock Incentive Plan, Certifications, and Inline XBRL data[193] Signatures - The report is duly signed on August 14, 2025, by Brian F Sullivan, Chairman and Chief Executive Officer, and Vicky Hahne, Chief Financial Officer[197][198]