Companion diagnostics-focused Celcuity Inc. CEO Brian Sullivan said the deal with Pfizer Inc. for rights to pan-PI3K/mTOR inhibitor gedatolisib was “an organically developed opportunity, because of the research we had done on gedatolisib” in the course of investigating PI3K inhibitors. “We hadn’t shifted our strategy and said, ‘Oh, let’s start in-licensing drugs.’”

The results of studies done that compared gedatolisib with PI3K-alpha inhibitors will be offered by Minneapolis-based Celcuity at the American Association for Cancer Research meeting. Meanwhile, Wall Street was liking the setup with Pfizer. Shares (NASDAQ:CELC) closed at $21.60, up $7.29, or 51%.

Gedatolisib will be developed for ER-positive/HER2-negative advanced or metastatic breast cancer. Preliminary data from 103 patients in the expansion portion of a phase Ib trial showed gedatolisib was well-tolerated, and researchers found antitumor activity. The company paid Pfizer, of New York, $5 million cash and $5 million in stock up front. As much as $330 million in development and sales-based milestone rewards, plus tiered royalties on sales, could follow.

Brian Sullivan, CEO and co-founder, Celcuity

“It was only after we heard that Pfizer was out-licensing the drug that we stepped back and said, ‘Huh, well, that would potentially take the drug off the board for a while, and who knows what will happen to it?,’” Sullivan said during a conference call with investors. “We thought this was a great drug, and we also thought about the way we could leverage Celsignia” to advance the compound.

The Celsignia diagnostic platform isolates the tumor cells from tumor tissue obtained from a biopsy and maintains them as if they were inside the patient. Next, pathways known to drive cancer are analyzed and their signaling activity quantified. Abnormal signaling that hasn’t been detected by molecular tests is diagnosed, at which point Celcuity determines which targeted therapies could work best.

“As we dug into the treatment landscape and thought about the potential importance [of gedatolisib], we just felt that we'd be, to be frank, derelict in not pursuing it,” Sullivan said. “These types of drugs, first-in-class drugs, where you've got human data to review are rare, and they're potentially incredibly valuable because of the impact they can have on standard-of-care treatment. So, really, it was a function of the circumstances lining up, not a predetermined decision to say, ‘Now is the time to pursue an opportunity like this,’” he said, adding that “the corollary is also true. We felt that [the deal] was very consistent with what we're doing. Our goal, our whole business, is geared around advancing treatment options for patients. It just happens to be that this will be one that we advance ourselves.”

Gedatolisib is being evaluated in combination with Pfizer’s Ibrance (palbociclib), an oral CDK 4/6 inhibitor, and either letrozole or fulvestrant in the expansion portion of the phase Ib effort. Enrolled were 103 patients in one of four arms according to their prior treatment history. A preliminary analysis of the objective response rate (ORRs) as of the Jan. 11, 2021, data cutoff showed that gedatolisib combined with Ibrance and an endocrine therapy achieved superior ORRs relative to historical control data. Specifically, 53 of the 88 evaluable patients (60%) had an objective response. Gedatolisib was also generally well-tolerated, with the majority of treatment-related adverse events (TRAEs) being grade 1 or 2. The most common grade 3 or 4 TRAEs were neutrophil count decrease and stomatitis.

Data from the phase Ib study suggest that “the nature of the activity associated with PI3K/mTOR is activated by androgen and CDK4/6 resistance,” Sullivan said. “We will build into a phase II study a subgroup of patients selected with Celsignia to serve as a backstop. If the hypothesis is, ‘Well, our patients would do much better,’ which we think is a reasonable hypothesis, then that would suggest we would have an easier time of getting an approval. At the same time, while the Celsignia patients may [do] better, the other, non-Celsignia-positive patients may also do very well – maybe not as good, but compared to the current standard of care, substantially better, so it's the kind of drug that potentially should be made available to all patients. Even though some might benefit more, it doesn't preclude getting approval for all comers.” But if the wider trial doesn’t pan out, “we think having a sufficiently powered subgroup of Celsignia-positive patients essentially provides a backup,” giving Celcuity “two bites at the apple,” he said. The company also said it has signed a $25 million debt financing agreement with Innovatus Capital Partners, and proceeds from first $15 million tranche increase cash on-hand to $44 million.

Craig-Hallum analyst Alexander Nowak asked about diligence related to the Pfizer deal, wanting to know if Celcuity had access to patient samples from the phase Ib in order to run tests before putting pen to paper. Sullivan said the company wasn’t able to do that “because there aren't fresh tumor samples available from those types of studies. But we were able to look at each patient's result and look at their mutational status, and find there wasn't a correlation with the mutational status. The overall favorability of the data certainly suggests that, in this case, with these patients, there's a more fundamental role that PI3K/mTOR is playing,” he said. That’s why the pathway “has been of such interest to pharmaceutical companies,” he noted.

Celcuity’s diagnostic strategy supports the push for new potential indications with six different targeted therapies, controlled by pharmaceutical companies, that would rely on a Celsignia to select patients. In January, Celcuity entered a collaboration with Sarah Cannon Research Institute and Pfizer for a phase II trial to measure the efficacy and safety of two Pfizer targeted therapies, Vizimpro (dacomitinib), a pan-HER inhibitor, and Xalkori (crizotinib), a c-Met inhibitor, in patients with previously treated metastatic HER2-negative breast cancer selected with the Celsignia test. Sarah Cannon is serving as the sponsor. In March, the firm inked a deal with MD Anderson Cancer Center, Basel, Switzerland-based Novartis AG and Puma Biotechnology Inc., of Los Angeles. To be investigated are efficacy and safety of Novartis’ c-Met inhibitor, Tabrecta (capmatinib), and Puma’s Nerlynx (neratinib), a pan-HER inhibitor, in patients with previously treated metastatic HER2-negative breast cancer selected with Celsignia. MD Anderson will serve as the sponsor.