Overview of Cyclacel’s Financial Performance

Cyclacel Pharmaceuticals is a clinical-stage biopharmaceutical company developing cancer medicines. The company reported $0 in revenue for the first quarter of 2025, compared to $29,000 in the same period of 2024. Cyclacel does not expect to generate significant revenue in the foreseeable future.

In January 2025, Cyclacel’s UK subsidiary Cyclacel Limited entered voluntary liquidation, resulting in Cyclacel losing control over that subsidiary. This led to a $5 million gain on deconsolidation, which was recorded as other income.

As part of cost-cutting efforts, Cyclacel is now focusing solely on the development of its plogosertib (Plogo) clinical program, having repurchased those assets from the liquidator of Cyclacel Limited. Cyclacel’s other drug program, fadraciclib, is being marketed for sale by the liquidator.

Going Concern and Liquidity Challenges

Cyclacel’s auditors have issued a “going concern” opinion, meaning there is substantial doubt about the company’s ability to continue operating in the next 12 months. This is because Cyclacel has not generated any revenue and does not anticipate revenue in the foreseeable future, and it cannot complete the development of Plogo without additional financing.

As of March 31, 2025, Cyclacel had $3.5 million in cash and cash equivalents, which will only sustain operations into the second quarter of 2025. The company is actively seeking additional capital through private equity financing or a strategic transaction. If Cyclacel cannot secure funding, it may be forced to curtail operations, delay or stop development activities, cease operations altogether, or file for bankruptcy.

Cyclacel’s Board of Directors is analyzing strategic alternatives, including a potential merger, acquisition, or other business combination, in addition to pursuing additional financing. The Board believes Cyclacel could be an attractive candidate for a business combination due to the potential benefits of being a publicly traded company.

Financial Highlights

Key liquidity measures as of March 31, 2025 and 2024 are summarized in the table below:

Cyclacel’s cash used in operating activities increased from $483,000 in Q1 2024 to $3,247,000 in Q1 2025, primarily due to a $7.1 million change in working capital resulting from the change of control. Financing activities provided $3,646,000 in Q1 2025 from the issuance of preferred stock, compared to $79,000 used in Q1 2024 for dividend payments.

Research and Development Expenses

Research and development (R&D) expenses decreased from $2.8 million in Q1 2024 to $822,000 in Q1 2025, a 71% decline. This was primarily due to the cessation of expenses for the transcriptional regulation program (fadraciclib) following the liquidation of the UK subsidiary. R&D expenses for the Plogo program also decreased by $603,000.

Going forward, Cyclacel expects overall R&D expenses for 2025 to decrease significantly compared to 2024, as the company focuses solely on the Plogo program.

General and Administrative Expenses

General and administrative (G&A) expenses increased from $1.6 million in Q1 2024 to $4.2 million in Q1 2025, a 166% increase. This was primarily due to one-time costs associated with the change of control, including $1.4 million in stock compensation expense, $700,000 in D&O insurance costs, $300,000 in compensation expense, and $100,000 in legal costs.

Cyclacel expects G&A expenditures for 2025 to be broadly in line with 2024 levels as the company stabilizes following the change of control.

Other Income and Expenses

Other income increased significantly from $55,000 in Q1 2024 to $4.9 million in Q1 2025, primarily due to a $4.9 million gain on the deconsolidation of the UK subsidiary. This was partially offset by a $9,000 increase in foreign exchange losses.

Going forward, other income will continue to be impacted by royalties received under the 2005 asset purchase agreement, which Cyclacel is unable to estimate. Foreign exchange gains and losses related to operating expenses are expected to continue.

Income Tax Benefit

Cyclacel received a $1.4 million income tax benefit in Q1 2024 from research and development tax credits claimed in the UK. However, following the liquidation of the UK subsidiary, Cyclacel is no longer eligible for these tax credits, resulting in $0 income tax benefit in Q1 2025.

Outlook and Risks

Cyclacel’s future funding requirements will depend on the progress and costs of its clinical trials, preclinical studies, and other R&D activities, as well as the costs of potential acquisitions, licensing, or other business development opportunities. The company expects to finance future cash needs primarily through public or private equity offerings, debt financing, or strategic collaborations.

The key risks facing Cyclacel include:

• Ability to raise additional capital to fund operations and complete development of Plogo
• Potential delays or setbacks in the Plogo clinical program
• Competition from other cancer therapies
• Reliance on the success of a single drug candidate (Plogo)
• Potential challenges in identifying and executing on strategic alternatives

Overall, Cyclacel faces significant liquidity and going concern challenges in the near term, which will require the company to secure additional financing or pursue strategic alternatives to continue operations. The company’s future success will depend on its ability to advance the Plogo program and potentially identify new opportunities, all while managing its limited financial resources.