Cyclacel Pharmaceuticals Navigates Challenging Times, Focuses on Core Programs

Cyclacel Pharmaceuticals, a clinical-stage biopharmaceutical company, has faced a tumultuous year marked by strategic changes and financial constraints. The company’s 2024 financial report reveals a company in transition, working to preserve its cash reserves and streamline operations while advancing its promising drug candidates.

Recent Developments: Exploring Strategic Alternatives

In December 2024, Cyclacel announced that it was exploring strategic alternatives, including a potential transaction with investor David Lazar of Activist Investing, LLC. This move was driven by the company’s need to preserve its cash and find the best path forward.

The key developments include:

• Cyclacel entered into a securities purchase agreement with Lazar, who agreed to purchase 1,000,000 shares of Series C Convertible Preferred Stock and 2,100,000 shares of Series D Convertible Preferred Stock for $3.1 million. This will be used to settle outstanding liabilities and for general corporate purposes.

• The company’s Board of Directors and executive officers, including President and CEO Spiro Rombotis and CFO Paul McBarron, resigned as part of the agreement with Lazar. Transition services will be provided through the filing of the 2024 annual report.

• Cyclacel’s wholly-owned UK subsidiary, Cyclacel Limited, is being liquidated, and its drug development program, fadraciclib, is being marketed for sale by the joint liquidator.

• The company is now focusing solely on the development of its Plogo clinical program, a PLK1 inhibitor being evaluated in advanced cancers.

Financial Performance: Declining Revenues and Increasing Losses

Cyclacel’s financial performance in 2024 reflects the challenges it has faced. Key financial metrics include:

Revenues:

• 2024 revenue: $43,000 (down from $420,000 in 2023)
• Revenue was primarily from the recovery of clinical manufacturing costs associated with an investigator-sponsored study.
• The company does not expect to report revenue for the foreseeable future.

Research and Development Expenses:

• 2024: $6.7 million (down from $19.2 million in 2023)
• Decrease primarily due to reduced spending on the transcriptional regulation program (fadraciclib) and the anti-mitotic program (Plogo).
• Future R&D expenses expected to decrease significantly as the company focuses solely on the Plogo program.

General and Administrative Expenses:

• 2024: $5.4 million (down from $6.7 million in 2023)
• Decrease primarily due to reductions in stock compensation, employment, and other corporate costs.
• Future G&A expenses expected to decrease further following the deconsolidation of the UK subsidiary.

Net Loss:

• 2024: $12.0 million (down from $23.3 million in 2023)
• Decrease in net loss primarily due to reduced R&D and G&A expenses.

Liquidity and Capital Resources: Preserving Cash and Seeking Funding

As of December 31, 2024, Cyclacel had $3.1 million in cash and cash equivalents, down from $3.4 million at the end of 2023. The company’s cash runway is expected to last into the second quarter of 2025.

Key liquidity and capital resource highlights:

• Cyclacel has incurred losses since its inception and had an accumulated deficit of $439.5 million as of December 31, 2024.
• The company does not currently have sufficient funds to complete the development and commercialization of its drug candidates.
• Cyclacel has relied primarily on the proceeds from sales of common and preferred equity securities to finance its operations.
• The company is actively seeking additional funding through public or private equity offerings, debt financings, or strategic collaborations to extend its operations beyond the second quarter of 2025.
• The company’s history of losses, negative cash flows, and dependence on additional financing have resulted in substantial doubt about its ability to continue as a going concern.

Agreements to Sell Securities: Raising Capital through Equity Offerings

Cyclacel has undertaken several equity financing transactions to raise capital, including:

• In November 2024, the company entered into a warrant exercise and reload agreement, where an existing warrant holder exercised their warrants for cash in exchange for new Series C and Series D warrants.
• In April 2024, Cyclacel entered into a private placement with an institutional investor, issuing common stock, pre-funded warrants, and common warrants for gross proceeds of $8 million.
• In December 2023, the company completed a registered direct offering and concurrent private placement, raising approximately $1 million in net proceeds.
• Cyclacel also entered into an at-the-market (ATM) equity offering program in 2021, which was later suspended due to the expiration of the underlying registration statement.

These equity financing transactions have been crucial in providing Cyclacel with the necessary capital to fund its operations, though the company’s long-term financial sustainability remains uncertain.

Outlook: Focusing on Plogo and Exploring Strategic Alternatives

Cyclacel’s future plans and outlook are shaped by the recent strategic changes and the company’s focus on its core Plogo program:

• The company will no longer be investing in the fadraciclib program, as it is being marketed for sale by the joint liquidator of the UK subsidiary.
• Cyclacel will concentrate its efforts and resources on the development of Plogo, its PLK1 inhibitor, in advanced cancers.
• Research and development expenses are expected to decrease significantly in 2025 as the company streamlines its operations and focuses solely on Plogo.
• General and administrative expenses are also anticipated to decline following the deconsolidation of the UK subsidiary.
• The company will continue to explore strategic alternatives, including potential transactions or partnerships, to secure additional funding and maximize the value of its assets.

Conclusion: Navigating Challenges, Preserving Core Assets

Cyclacel Pharmaceuticals has faced a challenging year, marked by strategic changes, financial constraints, and the need to preserve its cash reserves. The company’s focus on its Plogo program and the liquidation of its UK subsidiary represent an effort to streamline operations and concentrate resources on its most promising asset.

While the company’s financial performance has declined, the recent equity financing transactions have provided some much-needed capital. However, Cyclacel’s long-term viability remains uncertain, and the company will need to secure additional funding through various means to continue its operations and advance its drug candidate.

As Cyclacel navigates these turbulent times, its ability to successfully execute its strategic plan, secure additional financing, and ultimately bring its Plogo program to fruition will be crucial in determining the company’s future. Investors and stakeholders will closely monitor Cyclacel’s progress as it works to preserve its core assets and explore strategic alternatives to enhance shareholder value.