Cyclacel(CYCC) - 2022 Q1 - Quarterly Report

Part I. Financial Information Item 1. Financial Statements (Unaudited) Cyclacel Pharmaceuticals reported no revenue and a net loss of $4.1 million for Q1 2022, with cash decreasing to $29.6 million due to increased R&D expenses Consolidated Balance Sheets Total assets decreased to $39.6 million as of March 31, 2022, primarily due to a reduction in cash and cash equivalents | Financial Metric | March 31, 2022 ($000s) | December 31, 2021 ($000s) | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | 29,639 | 36,559 | | Total current assets | 36,577 | 40,942 | | Total assets | 39,629 | 42,587 | | Liabilities & Equity | | | | Total current liabilities | 6,204 | 5,294 | | Total liabilities | 6,219 | 5,324 | | Total stockholders' equity | 33,410 | 37,263 | | Total liabilities and stockholders' equity | 39,629 | 42,587 | Consolidated Statements of Operations The company reported no revenue and an increased net loss of $4.1 million for Q1 2022, driven by higher research and development expenses | Metric | Three Months Ended March 31, 2022 ($000s) | Three Months Ended March 31, 2021 ($000s) | | :--- | :--- | :--- | | Revenues | 0 | 0 | | Research and development | 4,954 | 2,566 | | General and administrative | 1,605 | 1,739 | | Total operating expenses | 6,559 | 4,305 | | Operating loss | (6,559) | (4,305) | | Net loss | (4,108) | (3,478) | | Net loss applicable to common shareholders | (4,158) | (3,528) | | Net loss per share – basic and diluted | $(0.42) | $(0.50) | Consolidated Statements of Cash Flows Net cash used in operating activities increased to $6.8 million in Q1 2022, resulting in a $6.9 million net decrease in cash and cash equivalents | Cash Flow Activity ($000s) | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | (6,775) | (3,566) | | Net cash used in investing activities | (4) | (78) | | Net cash (used in) provided by financing activities | (50) | 17,997 | | Net (decrease) increase in cash and cash equivalents | (6,920) | 14,371 | | Cash and cash equivalents, end of period | 29,639 | 47,777 | Notes to Unaudited Consolidated Financial Statements The company, a clinical-stage biopharmaceutical firm, has $29.6 million in cash, sufficient to fund operations through June 2023, and recognized $1.3 million in other income - The company is a clinical-stage biopharmaceutical firm focused on developing cancer medicines based on cell cycle, transcriptional regulation, and mitosis control biology[26] - Management asserts that the company's cash of approximately $29.6 million as of March 31, 2022, is sufficient to fund operations and capital expenditures through June 30, 2023, with future viability dependent on raising additional capital[29][32] - The company recognized $1.3 million of other income during Q1 2022 related to royalty payments receivable under a December 2005 Asset Purchase Agreement with Thermo Fisher Scientific Company[56] - As of March 31, 2022, the company had sold 752,425 shares for gross proceeds of approximately $4.0 million under its August 2021 Controlled Equity Offering Sales Agreement[75] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's clinical-stage programs, fadraciclib and CYC140, highlighting a 93% increase in R&D expenses and the need for future capital Overview Cyclacel, a clinical-stage biopharmaceutical company, focuses on fadraciclib and CYC140, with the first patient in the CYC140 study dosed in April 2022 - The company's primary focus is on its transcriptional regulation program evaluating fadraciclib (CDK2/9 inhibitor) and its anti-mitotic program evaluating CYC140 (PLK1 inhibitor)[114] - Fadraciclib is in ongoing Phase 1/2 studies for advanced solid tumors/lymphomas (065-101) and hematological malignancies (065-102)[115][117] - The first patient was dosed in the CYC140 Phase 1/2 study for hematological malignancies (140-101) in April 2022[118] Results of Operations For Q1 2022, the company reported no revenue, a 93% increase in R&D expenses, and a significant rise in other income from royalty payments | R&D Expense Breakdown ($000s) | Q1 2022 | Q1 2021 | Change (%) | | :--- | :--- | :--- | :--- | | Transcriptional Regulation (fadraciclib) | 3,645 | 1,662 | 119% | | Anti-mitotic (CYC140) | 1,122 | 679 | 65% | | Total R&D Expenses | 4,954 | 2,566 | 93% | - The increase in R&D expenses was driven by a $1.7 million rise in clinical trial costs for fadraciclib and a $0.4 million increase for CYC140 trial site openings[125] - General and administrative expenses decreased by 8% to $1.6 million in Q1 2022 from $1.7 million in Q1 2021, due to lower professional and recruitment costs[128] - Total other income increased to $1.3 million in Q1 2022 from $140,000 in Q1 2021, mainly due to $1.3 million in royalty income from a 2005 asset sale agreement[130] Liquidity and Capital Resources As of March 31, 2022, the company had $29.6 million in cash, sufficient through June 2023, but acknowledges the need for additional future funding | Liquidity Metric ($000s) | March 31, 2022 | March 31, 2021 | | :--- | :--- | :--- | | Cash and cash equivalents | 29,639 | 47,777 | | Total working capital | 30,373 | 47,691 | - Net cash used in operating activities increased to $6.8 million in Q1 2022 from $3.6 million in Q1 2021, primarily due to increased clinical activities[140] - Existing funds are expected to be sufficient to satisfy working capital and capital expenditure needs through June 30, 2023[144] - The company will require additional funding to complete the development and commercialization of any of its drug candidates, which it may seek through equity offerings, debt financings, or strategic collaborations[148] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Cyclacel is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Cyclacel is not required to provide quantitative and qualitative disclosures about market risk[153] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no significant changes in internal control over financial reporting - The company's management, including the CEO and principal financial officer, concluded that disclosure controls and procedures were effective as of March 31, 2022[154] - There were no significant changes in the company's internal controls over financial reporting during the quarter ended March 31, 2022[155] Part II. Other Information Item 1. Legal Proceedings The company reported no legal proceedings during the period - There are no legal proceedings to report[157] Item 1A. Risk Factors No material changes have occurred in the company's risk factors since its Annual Report on Form 10-K for the year ended December 31, 2021 - No material changes have occurred in the company's risk factors since its Annual Report on Form 10-K for the year ended December 31, 2021[158] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None[160] Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - None[161] Item 4. Mine Safety Disclosures This item is not applicable to the company - Not applicable[162] Item 5. Other Information The company reported no other information - None[163] Item 6. Exhibits This section lists the exhibits filed with the Form 10-Q, including certifications by the Principal Executive Officer and Principal Financial Officer and iXBRL financial statements - Exhibits filed include CEO and CFO certifications (31.1, 31.2, 32.1, 32.2) and iXBRL formatted financial data (101, 104)[164]