Cyclacel Pharmaceuticals Navigates Challenging Times, Focuses on Core Programs

Cyclacel Pharmaceuticals, a clinical-stage biopharmaceutical company, has faced significant headwinds in recent years as it works to advance its innovative cancer drug candidates. The company’s latest financial report for the year ended December 31, 2024 highlights both the progress made and the challenges encountered.

Recent Developments: Restructuring and Strategic Alternatives

In late 2024, Cyclacel announced it was exploring strategic alternatives to preserve its cash, including a potential transaction with investor David Lazar of Activist Investing, LLC. This led to a series of major changes for the company:

• On January 2, 2025, Cyclacel entered into a securities purchase agreement with Lazar, who agreed to purchase 1 million shares of Series C Convertible Preferred Stock and 2.1 million shares of Series D Convertible Preferred Stock for $3.1 million. The proceeds will be used to settle liabilities and fund general operations.

• The company’s Board of Directors and executive leadership team underwent significant changes, with the resignation of the CEO, CFO, and several directors. Transition services will be provided by the departing executives.

• Cyclacel’s wholly-owned UK subsidiary, Cyclacel Limited, was placed into creditors’ voluntary liquidation as part of the company’s efforts to reduce operating costs. The subsidiary’s fadraciclib drug program is being marketed for sale.

• Cyclacel will now focus solely on the development of its Plogo clinical program, a PLK1 inhibitor being evaluated in advanced cancers.

Financial Performance: Declining Revenues and Ongoing Losses

Cyclacel has not generated any product revenues to date, relying instead on funding from equity financings, tax credits, and limited revenue from an investigator-sponsored study. The company reported the following financial results for 2024 and 2023:

Revenues:

• 2024: $43,000 (down 90% from $420,000 in 2023)
• The decrease was due to the completion of the investigator-sponsored study in 2023.

Research and Development Expenses:

• 2024: $6.7 million (down 65% from $19.2 million in 2023)
• The decrease was primarily due to reduced spending on the fadraciclib and Plogo programs as the company scaled back clinical activities.

General and Administrative Expenses:

• 2024: $5.4 million (down 20% from $6.7 million in 2023)
• The decrease was driven by reductions in stock compensation, employment, and other corporate costs.

Net Loss:

• 2024: $12.0 million (down from $23.3 million in 2023)
• The reduced net loss was a result of the lower operating expenses, partially offset by decreased revenues and other income.

Liquidity and Capital Resources: Ongoing Concerns

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 expects its current cash resources to fund operations into the second quarter of 2025.

Cyclacel has incurred losses since inception and had an accumulated deficit of $439.5 million as of the end of 2024. The company’s auditors have expressed substantial doubt about its ability to continue as a going concern, as it will need to raise additional capital to fund future operations.

The company’s future funding requirements will depend on the progress and costs of its clinical trials, regulatory approvals, and any potential business development activities. Cyclacel plans to finance future cash needs primarily through public or private equity offerings, debt financings, or strategic collaborations.

Agreements to Sell Securities: Raising Much-Needed Capital

To bolster its financial position, Cyclacel has entered into several securities purchase agreements over the past two years:

• In April 2024, the company raised $1.0 million through a private placement of common stock, pre-funded warrants, and common warrants.
• In December 2023, Cyclacel raised an additional $1.0 million through a registered direct offering and concurrent private placement of shares and warrants.
• In November 2024, the company entered into a warrant exercise and reload agreement, which provided $1.6 million in net proceeds from the exercise of outstanding warrants.

These financing activities have been crucial in allowing Cyclacel to continue its operations and advance its drug candidates amid its challenging financial situation.

Outlook: Focusing on Plogo, Divesting Fadraciclib

Going forward, Cyclacel’s primary focus will be on the development of its Plogo program, a PLK1 inhibitor being evaluated in advanced cancers. The company has decided to discontinue the fadraciclib program, which was being developed by its now-liquidated UK subsidiary, and is marketing those assets for sale.

The company expects its research and development expenses to decrease significantly in 2025 compared to 2024, as it no longer has any costs associated with the fadraciclib program. General and administrative expenses are also expected to decline substantially following the deconsolidation of the UK subsidiary.

However, Cyclacel’s long-term future remains uncertain, as it continues to face substantial doubt about its ability to continue as a going concern. The company’s success will depend on its ability to raise additional capital, either through equity or debt financing or strategic partnerships, to fund the ongoing development of Plogo and any other potential drug candidates.

Conclusion

Cyclacel Pharmaceuticals has navigated a challenging period, marked by declining revenues, ongoing losses, and the need to explore strategic alternatives to preserve its cash. The company’s recent restructuring, including the liquidation of its UK subsidiary and the resignation of its top executives, represents a significant shift in its operations.

Going forward, Cyclacel will focus solely on the development of its Plogo program, while divesting the fadraciclib assets. This streamlined approach may help the company conserve resources, but its long-term viability remains uncertain without the ability to secure additional financing. Investors and stakeholders will closely monitor Cyclacel’s progress as it works to advance its remaining drug candidate and explore strategic options to ensure its continued operations.