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Celcuity Reports Fourth Quarter and Full Year 2018 Financial Results

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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 fourth quarter and year ended December 31, 2018.

Unless otherwise stated, all comparisons are for the fourth quarter and
year ended December 31, 2018, compared to the fourth quarter and year
ended December 31, 2017.

Celcuity reported a net loss of $1.8 million, or $0.18 per share, for
the fourth quarter of 2018, compared to a net loss of $1.7 million, or
$0.17 per share, for the fourth quarter of 2017. Net loss for fiscal
year 2018 was $7.5 million, or $0.74 per share, compared to $6.3
million, or $0.84 per share, for fiscal year 2017. Non-GAAP adjusted net
loss was $1.6 million, or $0.15 per share, for the fourth quarter of
2018, compared to non-GAAP adjusted net loss of $1.4 million, or $0.14
per share, for the fourth quarter of 2017. Non-GAAP adjusted net loss
for the fiscal year 2018 was $6.3 million, or $0.62 per share, compared
to $4.9 million, or $0.66 per share, for the fiscal year 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 fourth quarter of 2018 was
$1.5 million. Net cash used in operating activities for fiscal year 2018
was $6.1 million. At December 31, 2018, Celcuity had cash, cash
equivalents and investments of $24.9 million, compared to cash, cash
equivalents and investments of $31.4 million at December 31, 2017.

"We made significant progress in 2018 and achieved many of our critical
objectives. Our first clinical trial, FACT 1, was activated in
collaboration with Genentech and the NSABP Foundation. The FACT 1 trial
is evaluating the safety and efficacy of Genentech's drugs, Herceptin®
and Perjeta®, and chemotherapy, in breast cancer patients selected with
Celcuity's CELx HSF Test. We signed a clinical trial agreement with Puma
Biotechnology, Inc. and West Cancer Center to conduct a Phase II
clinical trial, known as FACT 2, to evaluate the efficacy and safety of
Puma's drug, Nerlynx®, and chemotherapy, in breast cancer patients
selected with Celcuity's CELx HSF Test. We were also selected by NSABP
and Puma Biotechnology, Inc. to evaluate tissue samples from 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.

"We completed development of our second CELx signaling function Test for
HER2-negative breast cancer. This second test identifies HER2-negative
breast cancer patients who have hyperactive and co-activated HER family
and c-Met signaling activity. We also advanced development of several
new CELx signaling function tests to diagnose new cancer sub-types,
including a third test for breast cancer and tests for two new tumor
tissue types. Additionally, we presented results of several pre-clinical
studies at major conferences, including the American Society of Clinical
Oncology Annual Meeting, the Miami Breast Cancer Conference, and the San
Antonio Breast Cancer Symposium."

Mr. Sullivan added, "The FACT 1 clinical trial that is evaluating
Genentech's targeted therapies in patients our CELx HSF test selects now
has 14 activated sites. While this is consistent with our goal at the
beginning of 2018, the enrollment rate of patients at these sites has
been lower than NSABP's original expectations. To offset the lower than
expected enrollment rate, NSABP has agreed to activate up to 16
additional sites, for a total of 30 sites. We expect the addition of
these sites will increase Celcuity's cost for the FACT 1 trial by up to
$650,000. We now expect interim results from this trial in late 2019 and
final results approximately nine months later.

"The FACT 2 clinical trial that is evaluating Puma's targeted therapy,
Nerlynx, in patients our CELx HSF test selects has received all required
regulatory and Institutional Review Board approvals and is expected to
be activated later in early 2019. We expect interim results from this
trial in late 2019 or early 2020 and final results approximately 12
months later.

"As we look ahead to the remainder of 2019, we anticipate completing
development of another cell signaling function test for breast cancer
that diagnoses a new sub-type of breast cancer not currently detected
with a molecular test. We also anticipate completing development of
tests for two new tumor types. Each of these new tests would increase
the opportunities for us to provide companion diagnostics that enable
pharmaceutical companies to obtain new drug indications for the cancer
sub-types our tests diagnose. We also hope to initiate at least one
additional clinical collaboration with a pharmaceutical company by
year-end to study breast cancer patients identified by our CELx MP test
with hyperactive and co-activated HER family and c-Met signaling
activity."

Operating Expenses
Total operating expenses were $2.0
million for the fourth quarter of 2018, compared to $1.8 million for the
fourth quarter of 2017. Operating expenses for fiscal year 2018 were
$7.9 million, compared to $6.0 million for fiscal year 2017.

Research and Development Expenses:
Research and development
(R&D) expenses were $1.6 million for the fourth quarter of 2018,
compared to $1.4 million for the fourth quarter of 2017. R&D expenses
for fiscal year 2018 were $6.3 million, compared to $5.0 million for
fiscal year 2017. The approximately $1.3 million increase during fiscal
year 2018, compared to fiscal year 2017, resulted primarily from a $0.6
million increase in compensation related expenses to support development
of our CELx platform. In addition, other R&D expenses increased $0.7
million due to clinical validation and laboratory studies, legal
expenses related to patent costs and operational and business
development activities.

General and Administrative Expenses:
General and
administrative (G&A) expenses were $0.3 million for the fourth quarter
of 2018, compared to $0.4 million for the fourth quarter of 2017. G&A
expenses for fiscal year 2018 were $1.6 million, compared to $1.0
million for fiscal year 2017. The approximately $0.6 million increase
during fiscal year 2018, compared to fiscal year 2017, primarily
resulted from a $0.4 million increase in professional fees associated
with being a public company for a full year versus only one quarter in
2017, and director and officer insurance. Other G&A expenses increased
$0.2 million in compensation related expenses, including non-cash
stock-based compensation.

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 1-877-876-9173 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, the
outcome of our clinical trial with Puma Biotechnology and the West
Cancer Center, the outcome of the clinical trial Puma Biotechnology and
the NSABP Foundation are fielding and of which we are providing
services, clinical trial patient enrollment and timing of results,
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.
Balance Sheets
 
   

December 31,
2018

   

December 31,
2017

   
Assets
Current Assets:
Cash and cash equivalents $ 15,944,609 $ 2,639,789
Investments 8,952,907 21,556,857
Restricted cash - 50,000
Deposits 22,009 27,726
Deferred transaction costs 28,743 -
Prepaid assets   269,940   209,708
Total current assets 25,218,208 24,484,080
 
Property and equipment, net 813,613 280,056
 
Long term investments - 7,205,374
   
Total Assets $ 26,031,821 $ 31,969,510
 
Liabilities and Stockholders' Equity:
Current Liabilities:
Accounts payable $ 119,811 $ 71,913
Capital lease obligations 5,730 -
Accrued expenses   536,791   506,140
Total current liabilities 662,332 578,053
 
Capital lease obligations 19,878 -
   
Total Liabilities   682,210   578,053
Total Stockholders' Equity   25,349,611   31,391,457
Total Liabilities and Stockholders' Equity $ 26,031,821 $ 31,969,510
 
 
Celcuity Inc.
Statements of Operations
 
               
Three Months Ended December 31, Years Ended December 31,
2018 2017 2018 2017
 
Operating expenses:
 
Research and development $ 1,634,746 $ 1,403,070 $ 6,325,995 $ 4,980,427
General and administrative   316,460     420,963     1,606,543     972,518  
Total operating expenses   1,951,206     1,824,033     7,932,538     5,952,945  
Loss from operations   (1,951,206 )   (1,824,033 )   (7,932,538 )   (5,952,945 )
 
Other income (expense)
Interest expense (46 ) - (111 ) (451,664 )
Interest income 122,951 99,845 448,834 152,879
Gain on sale of fixed assets   3,000     -     3,000     -  
Other income (expense), net   125,905     99,845     451,723     (298,785 )
Net loss before income taxes   (1,825,301 )   (1,724,188 )   (7,480,815 )   (6,251,730 )
Income tax benefits - - - -
Net loss $ (1,825,301 ) $ (1,724,188 ) $ (7,480,815 ) $ (6,251,730 )
 
Net loss per share, basic and diluted $ (0.18 ) $ (0.17 ) $ (0.74 ) $ (0.84 )
 
Weighted average common shares outstanding, basic and diluted 10,162,690 10,082,177 10,124,544 7,460,640
 

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
December 31,
Twelve Months Ended
December 31,
2018 2017 2018 2017
 
GAAP net loss $ (1,825,301 ) $ (1,724,188 ) $ (7,480,815 ) $ (6,251,730 )
Adjustments:
Stock-based compensation
Research and development 172,183 187,667 727,216 608,456 (1)
General and administrative 83,394 125,621 441,400 265,930 (2)
Non-cash interest expense   -     -     -     451,664   (3)
Non-GAAP adjusted net loss $ (1,569,724 ) $ (1,410,900 ) $ (6,312,199 ) $ (4,925,680 )
 
 
GAAP net loss per share - basic and diluted $ (0.18 ) $ (0.17 ) $ (0.74 ) $ (0.84 )
Adjustment to net loss (as detailed above)   0.03     0.03     0.12     0.18  
Non-GAAP adjusted net loss per share $ (0.15 ) $ (0.14 ) $ (0.62 ) $ (0.66 )
 
Weighted average common shares outstanding, basic and diluted 10,162,690 10,082,177 10,124,544 7,460,640
 

(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.

 

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