Market Overview

Celcuity Reports Second Quarter 2018 Financial Results

Share:

Celcuity Inc. (NASDAQ:CELC), a functional cellular analysis company
that is discovering new cancer subtypes and commercializing diagnostic
tests designed to significantly improve clinical outcomes of cancer
patients treated with targeted therapies, announced financial results
for the second quarter ended June 30, 2018.

Unless otherwise stated, all comparisons are for the second quarter
ended June 30, 2018, compared to the second quarter ended June 30, 2017.

Celcuity reported a net loss of $1.8 million, or $0.18 per share, for
the second quarter of 2018, compared to a net loss of $1.8 million, or
$0.28 per share, for the second quarter of 2017. Net loss for the first
six months of 2018 was $3.8 million, or $0.37 per share, compared to
$2.8 million, or $0.43 per share, for the first six months of 2017.
Non-GAAP adjusted net loss was $1.5 million, or $0.15 per share, for the
second quarter of 2018, compared to non-GAAP adjusted net loss of $1.3
million, or $0.20 per share, for the second quarter of 2017. Non-GAAP
adjusted net loss for the first six months of 2018 was $3.2 million, or
$0.31 per share, compared to $2.2 million, or $0.33 per share, for the
first six months of 2017. Non-GAAP adjusted net loss excludes
stock-based compensation expense and non-cash interest expense. Because
these items have no impact on the cash position of the Company,
management believes Non-GAAP adjusted net loss better enables Celcuity
to focus on cash used in operations. For a reconciliation of financial
measures in accordance with generally accepted accounting principles of
the United States (GAAP) to non-GAAP financial measures in this release,
please see the financial tables at the end of this news release.

Net cash used in operating activities for the second quarter of 2018 was
$1.4 million. Net cash used in operating activities for the first six
months of 2018 was $2.8 million. At June 30, 2018, Celcuity had cash,
cash equivalents and investments of $28.5 million, compared to cash,
cash equivalents and investments of $31.4 million at December 31, 2017.

"During the second quarter, our R&D teams continued to advance the
development of new CELx Signaling Function tests for breast cancer and
two new tissue types," said Chairman and Chief Executive Officer, Brian
Sullivan. "In breast cancer, we are evaluating new signaling pathways to
add to our current CELx MP Signaling Function test for breast cancer.
This test currently analyzes HER1, HER2, HER3, and c-Met signaling
activity and diagnoses untreated cell signaling dysfunction in
approximately 25% of HER2-negative breast cancer patients. We believe
there is an opportunity to increase the total percentage of
HER2-negative breast cancer patients diagnosed with untreated signaling
dysfunction to 35%-40%.

"To develop CELx tests in new tumor types, we are advancing our cell
microenvironment technology and furthering our capability to assess
different types of signaling dysfunction. As we have demonstrated in
breast cancer, we are working to provide functional analysis of multiple
signaling pathways for these other tissue types.

"Each signaling pathway test creates opportunities for Celcuity to
collaborate with multiple pharmaceutical companies. We intend to work
with these companies to facilitate approvals of their targeted
therapeutics to treat the new patient sub-groups our CELx tests
identify. We are currently in various stages of discussions with several
pharmaceutical companies. We expect any resulting collaborations to
involve, as a first step, clinical trials that evaluate the efficacy of
our collaboration partners' therapy or therapies in breast cancer
patients who have either hyperactive HER2 signaling tumors or
hyperactive and co-activated HER family and c-Met signaling tumors.

"The clinical trial we are fielding in collaboration with Genentech and
the NSABP Foundation is continuing to progress. The institutional review
board (IRB) approvals at our sites are proceeding as we previously
disclosed, and we continue to expect to receive interim results from
this trial in mid-2019. The clinical trial that Puma Biotechnology and
the NSABP Foundation are fielding is also progressing as previously
disclosed. This clinical trial is a Phase II study evaluating Puma
Biotechnology's pan-HER inhibitor, Nerlynx, Genentech's HER2 antibody,
Herceptin, and Bristol-Myers Squibb's EGFR inhibitor, Erbitux, in
metastatic colorectal cancer patients. For this trial, Celcuity will
analyze tissue sent us so that Puma can compare the tissue's HER2
signaling status with the patient's response to therapy."

Operating Expenses
Total operating expenses were $1.9
million for the second quarter of 2018, compared to $1.6 million for the
second quarter of 2017. Operating expenses for the first six months of
2018 were $4.0 million, compared to $2.6 million for the first six
months of 2017.

Research and Development Expenses:
Research and development
(R&D) expenses were $1.5 million for the second quarter of 2018,
compared to $1.3 million for the second quarter of 2017. R&D expenses
for the first six months of 2018 were $3.1 million, compared to $2.2
million for the first six months of 2017. The approximately $0.9 million
increase during the first half of fiscal year 2018, compared to the
first half of fiscal year 2017, resulted primarily from a $0.4 million
increase in compensation related expenses to support development of our
CELx platform. In addition, other research and development expenses
increased $0.5 million due to clinical validation studies and laboratory
supplies to support the CELx platform and operational and business
development activities.

General and Administrative Expenses:
General and
administrative (G&A) expenses were $0.4 million for the second quarter
of 2018, compared to $0.3 million for the second quarter of 2017. G&A
expenses for the first six months of 2018 were $0.9 million, compared to
$0.4 million for the first six months of 2017. The approximately $0.5
million increase during first half of 2018, compared to the first half
of 2017, primarily resulted from a $0.2 million increase in compensation
related expenses. Other G&A expenses increased $0.3 million due to
professional fees associated with being a public company and director
and officer insurance.

Conference Call
Management will host a teleconference call
at 4:30 PM Eastern Time today to discuss the results. Anyone interested
in participating should dial 1-877-876-9176 referencing confirmation
code "Celcuity." Participants are asked to dial in 5 to 10 minutes prior
to the start of the call and inform the operator you would like to join
the "Celcuity Conference Call."

About Celcuity
Celcuity Inc. is a cellular analysis company
that is discovering new cancer sub-types and commercializing diagnostic
tests designed to significantly improve the clinical outcomes of cancer
patients treated with targeted therapies. Celcuity's proprietary CELx
diagnostic platform uses a patient's living tumor cells to identify the
specific abnormal cellular activity driving a patient's cancer and the
targeted therapy that can best treat that patient's disease. Celcuity is
headquartered in Minneapolis, MN. Further information about Celcuity can
be found at www.celcuity.com.

Forward-Looking Statements
This press release contains
statements that constitute "forward-looking statements." In some cases,
you can identify forward-looking statements by terminology such as
"may," "should," "expects," "plans," "anticipates," "believes,"
"estimates," "predicts," "potential," "intends" or "continue," and other
similar expressions that are predictions of or indicate future events
and future trends, or the negative of these terms or other comparable
terminology. Forward looking statements in this release include, without
limitation, expectations with respect to commercializing diagnostic
tests, the use of cash, the discovery of additional cancer sub-types,
the development of additional CELx signaling function tests, the uses
and breadth of application of CELx signaling function tests, whether
alone or in collaboration with other tests, collaboration with
pharmaceutical companies and the outcomes of such collaboration, the
outcome of our clinical trial with NSABP Foundation and Genentech, and
the participation of clinical trial sites, including expected use of
central internal review board approval of clinical trial protocol,
anticipated benefits that our tests may provide to pharmaceutical
companies and to the clinical outcomes of cancer patients and plans to
expand research and development and operational processes.
Forward-looking statements are subject to numerous conditions, many of
which are beyond the control of Celcuity, which include, but are not
limited to, those set forth in the Risk Factors section in our Annual
Report on Form 10-K for the year ended December 31, 2017 filed with the
Securities and Exchange Commission on March 15, 2018. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. Celcuity undertakes
no obligation to update these statements for revisions or changes after
the date of this release, except as required by law.

 
Celcuity Inc.
Condensed Balance Sheets
 
   

   June 30,   
2018

   

December 31,
2017

(unaudited)
Assets
Current Assets:
Cash and cash equivalents $ 3,172,782 $ 2,639,789
Investments 18,385,920 21,556,857
Restricted cash 50,000 50,000
Deposits 27,726 27,726
Prepaid assets   154,002   209,708
Total current assets 21,790,430 24,484,080
 
Property and equipment, net 730,449 280,056
 
Long term investments 6,948,606 7,205,374
   
Total Assets $ 29,469,485 $ 31,969,510
 
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable $ 149,401 $ 71,913
Capital lease obligations 5,706 -
Accrued expenses   807,783   506,140
Total current liabilities 962,890 578,053
 
Capital lease obligations 23,226 -
   
Total Liabilities   986,116   578,053
Total Stockholders' Equity   28,483,369   31,391,457
Total Liabilities and Stockholders' Equity $ 29,469,485

$

31,969,510

 
 
Celcuity Inc.
Condensed Statements of Operations
(unaudited)
               
Three Months Ended June 30, Six Months Ended June 30,
2018 2017 2018 2017
 
Operating expenses:
 
Research and development $ 1,546,537 $ 1,303,886 $ 3,092,205 $ 2,212,629
General and administrative   382,646     301,820     913,286     386,963  
Total operating expenses   1,929,183     1,605,706     4,005,491     2,599,592  
 
Loss from operations   (1,929,183 )   (1,605,706 )   (4,005,491 )   (2,599,592 )
 
Other income (expense)
Interest expense - (186,659 ) - (186,686 )
Interest income   112,722     16,150     221,084     22,712  
Other income (expense), net   112,722     (170,509 )   221,084     (163,974 )
 
Net loss before income taxes   (1,816,461 )   (1,776,215 )   (3,784,407 )   (2,763,566 )
Income tax benefits - - - -
Net loss $ (1,816,461 ) $ (1,776,215 ) $ (3,784,407 ) $ (2,763,566 )
 
Net loss per share, basic and diluted $ (0.18 ) $ (0.28 ) $ (0.37 ) $ (0.43 )
 
Weighted average common shares outstanding, basic and diluted 10,110,558 6,440,139 10,103,323 6,440,139
 

Cautionary Statement Regarding Non-GAAP Financial Measures

This news release contains references to non-GAAP adjusted net loss and
non-GAAP adjusted net loss per share. Management believes these non-GAAP
financial measures are useful supplemental measures for planning,
monitoring, and evaluating operational performance as they exclude
stock-based compensation expense and non-cash interest expense from net
loss and net loss per share. Management excludes these items because it
does not impact the cash position of the Company, which management
believes better enables Celcuity to focus on cash used in operations.
However, non-GAAP adjusted net loss and non-GAAP adjusted net loss per
share are not recognized measures under GAAP and do not have a
standardized meaning prescribed by GAAP. Therefore, non-GAAP adjusted
net loss and non-GAAP adjusted net loss per share may not be comparable
to similar measures presented by other issuers. Investors are cautioned
that non-GAAP adjusted net loss and non-GAAP adjusted net loss per share
should not be construed as alternatives to net loss, net loss per share
or other statements of operations data (which are determined in
accordance with GAAP) as an indicator of Celcuity's performance or as a
measure of liquidity and cash flows. Management's method of calculating
non-GAAP adjusted net loss and non-GAAP adjusted net loss per share may
differ materially from the method used by other companies and
accordingly, may not be comparable to similarly titled measures used by
other companies.

 
Celcuity Inc.
Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Net Loss and
GAAP Net Loss Per Share to Non-GAAP Adjusted Net Loss Per Share
(Unaudited)
               
Three Months Ended
June 30,
Six Months Ended
June 30,
2018 2017 2018 2017
 
GAAP net loss $ (1,816,461 ) $ (1,776,215 ) $ (3,784,407 ) $ (2,763,566 )
Adjustments:
Stock-based compensation
Research and development 175,864 197,921 337,535 294,189 (1)
General and administrative 100,420 128,627 275,229 128,627 (2)
Non-cash interest expense   -     186,659     -     186,686   (3)
 
Non-GAAP adjusted net loss $ (1,540,177 ) $ (1,263,008 ) $ (3,171,644 ) $ (2,154,065 )
 
 
GAAP net loss per share - basic and diluted $ (0.18 ) $ (0.28 ) $ (0.37 ) $ (0.43 )
Adjustment to net loss (as detailed above)   0.03     0.08     0.06     0.10  
Non-GAAP adjusted net loss per share $ (0.15 ) $ (0.20 ) $ (0.31 ) $ (0.33 )
 
Weighted average common shares outstanding, basic and diluted 10,110,558 6,440,139 10,103,323 6,440,139
 

(1)

 

To reflect a non-cash charge to operating expense for Research and
Development stock-based

compensation.

(2)

To reflect a non-cash charge to operating expense for General and
Administrative stock-based

compensation.

(3)

To reflect a non-cash charge to other expense for non-cash
amortization of debt discount and debt

financing costs and accrued interest related to the issuance of
our unsecured convertible promissory

notes. All principal and accrued interest under the unsecured
convertible promissory notes converted

into common stock of Celcuity immediately following Celcuity's
initial public offering.

 

View Comments and Join the Discussion!