Cyclacel Losses Widen - Analyst Blog

Cyclacel Pharmaceuticals, Inc.’s (CYCC) first quarter fiscal 2010 net loss per share came in at 18 cents, higher than the Zacks Consensus Estimate of a loss of 15 cents. The year-ago loss was 26 cents. Although the total net loss during the quarter increased 7% to $5.8 million, net loss per share declined compared to the year-ago period due to a 55% increase in the number of shares.
 
Cyclacel reported revenues of $271,000, a 19% increase over $228,000 in the first quarter of 2009. The company earns revenues primarily from the sales of Xclair Cream for radiation dermatitis and Numoisyn Liquid and Numoisyn Lozenges for xerostomia.
 
Operating expenses in the reported quarter declined 13.25% year-over-year to $4.7 million. While research and development (R&D) expenses at $2.2 million were 30% lower compared to the year-ago quarter, selling, general and administrative expenses (SG&A) increased 9% to $2.4 million.

The reduction in R&D spend was primarily attributable to the company’s focus on its lead pipeline candidate sapacitabine. Meanwhile, SG&A expenses increased due to higher spending on professional costs.
 
Cyclacel also provided an update on its pipeline. The company has submitted a Special Protocol Assessment (SPA) to the US Food and Drug Administration (FDA) for the phase III trial of sapacitabine on elderly patients with acute myeloid leukemia (AML). The FDA is yet to decide on the SPA.
 
Sapacitabine is being studied for other indications as well. Cyclacel expects to report interim phase II data on sapacitabine in patients with myelodysplastic syndromes (MDS) in 2010. Additionally, the company expects to progress with a phase II study of sapacitabine in lung cancer patients.

Cyclacel exited the first quarter of 2010 with cash and cash equivalents of $24.2 million, up from $11.5 million at the end of December 2009. The primary reason for the increase in cash balance was $18.5 million raised through a registered offering and warrant exercises. The company expects its cash balance coupled with the proceeds from the recent financing to be sufficient to fund current operations for the next two years.