Jules Abraham - IR Jim Caruso - CEO Chad Kolean - CFO Jamey Weichert - CSO Kevin Kozak - CMO Patrick Genn - VP, Business Development

Good day, ladies and gentlemen. And welcome to the Cellectar Fourth Quarter and Year End Financial Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] And now I will turn the conference over to your host Jules Abraham, of JQA Partners. Please begin.

Thank you. Good afternoon and welcome to Cellectar Biosciences' year end 2015 conference call and webcast. Earlier today following the close of the U.S. financial markets the company distributed press release outlining the company's financial results for the fiscal year ending December 31, 2015. The press release can be found in the company's website at www.cellectarbiosciences.com in the Investor Relations section. Joining me today from Cellectar are Jim Caruso, Chief Executive Officer; Dr. Jamey Weichert, Chief Scientific Officer, Chad Kolean, Chief Financial Officer; Dr. Kevin Kozak, Chief Medical Officer and J Patrick Genn, Vice President of Business Development. Before I turn the call over to Mr. Caruso, please note that some of the remarks you will hear today may contain forward-looking statements about the company's performance. As well, there may be forward-looking statements during the Q&A session following our prepared remarks. These statements are neither promises nor guarantees and there are a number of risks and uncertainties that could cause actual results to differ materially from those set forth in the forward-looking statements. Additional information concerning factors that could cause actual results to materially differ from those in these forward-looking statements is contained in the company's filings and periodic reports filed with the SEC, copies of which are available on its Cellectar's website or maybe requested directly from the company. Forward-looking statements are made as of today's date and Cellectar does not undertake any obligation to update any forward-looking statements made during today's call. With that said, I now turn the call over to Mr. Caruso. Jim?

Thank you, Jules, and thank you to everyone joining us today for our year end 2015 call. The last two quarters of 2015 through the first quarter of 2016 continue to represent a significant shift in corporate objectives, culture and branding for Cellectar Biosciences. Significant progress has been achieved and we remain confident in our corporate strategy, operating plan execution, and our delivery platform technology. We are pleased with the resulting program advancements and look forward to providing further color on today's call. To briefly outline the calls agenda, we will start by having our CFO, Chad Kolean, provide a financial summary. I will then deliver a general overview of our progress. Dr. Kevin Koezak, our Chief Medical Officer, will provide a detailed update regarding CLR 131, our promising PDC currently in a phase 1 study for the treatment of multiple myeloma. Following this update, Dr. Jamey Weichert, our Chief Scientific Officer, will review the research advancements with our CLR/CTX chemotherapeutic program and provide more detail we regarding our recently announced CLR/CTX collaboration with Pierre Fabre. Jamey will also provide an update on our progress with the recently initiated CLR 125 phase 1/2 fast-track SPIR pre-clinical research which is being fully funded by the National Cancer Institute or NCI. Of course, at the conclusion of the call, the executive leadership team will be available to answer your questions. At this time, I'd like to turn the call over to our CFO, Chad Kolean for our financial update.

Thank you, Jim. Today I will address three topics; our reverse stock split, our NASDAQ compliance, and our financial results for the year. First, we affected a reverse stock split on Friday, March 4, after the close of the financial markets. After careful consideration, our Board chose to implement the reverse split at a 1 for 10 ratio, which was within the range that had been approved at our stockholders meeting on February 8. This reverse split was reflected in our stocks trading on Monday March 7. As a result, I want to point out that any references to share amounts and per share calculations in this call, our earnings release, and all information we present going forward were reflected revised amount of shares outstanding. The reverse split also applies to all of our other outstanding equity instruments that have our common stock as the underlying security. The reverse split is beneficial for several reasons, the most important of which is the impact it has on our stocks trading price and the flexibility it provide us as we consider the issuance of shares in the future. With regard to a trading price as we previously reported, we received a notice from NASDAQ on January 21 indicating that our stock did not meet the minimum bid price requirement of $1. While there is no guarantee we believe that affecting the reverse split will sufficiently address NASDAQ's bid price required. Regarding our NASDAQ stockholders equity compliance, back in August we had received a notice from NASDAQ regarding their continuing listing rule that requires us to maintain at least $2.5 million in stockholders equity. We requested an extension from NASDAQ to address this aspect of their listing requirements and they -- which they granted. Among the actions that were required to be completed by February 10 were the filing of a registration statement for an underwritten equity offering and the closing of that offer. While we did file the registration statement, we have yet to close an offering. As a result, we received a notice from NASDAQ in February 11 identifying the continuing points [ph]. That notice indicated that we were entitled to request a hearing to appeal for an additional extension of time to regain compliance the NASDAQ's continuing listing requirements. While the company is committed to maintaining our NASDAQ listing and believes it has strong reasons to support a further extension, there can be no assurance that NASDAQ will grant our request. In the event that NASDAQ does not grant our request we will be subject to delisting from NASDAQ. Assuming NASDAQ was to grant our request, they can provide us with an extension to -- at the latest, August 9, for the company to remediate its stockholders equity amount. As I mentioned, the reverse split also provide us with increased flexibility associated with the potential issuance of common stock in the future. We have 40 million authorized shares currently which ensure that we have adequate shares for corporate actions moving forward. Now for our operating results for fiscal year 2015, research and development expenses for the year were $5.2 million, a reduction of $800,000 from the prior year. As we noted in our third quarter conference call, this reflects our continuous focus on our research and development efforts and implementation on operating improvements that have resulted in reductions to our cost structure of. General and administrative expenses for the year totaled $3.4 million which is an improvement from 2014 of $300,000. We incurred approximately $200,000 of restructuring charges in fiscal 2015 which is consistent with the prior year, a loss from operations with $8.8 million for 2015 versus the loss from operations of $9.9 million in 2014. Other Income was $3.3 million for fiscal 2015 as compared to $1.8 million in 2014. These other income amounts are almost exclusively non-cash in nature, and are due to changes in the valuation of certain warrants that are classified as liabilities on our balance sheet. As a result our net loss for the year ended December 31, 2015 was $5.5 million or $7.03 per share. While in the prior year we reported a loss of $8.1 million or $17.53 per share. As of December 31, 2015, we had $3.9 million in cash and cash equivalents on hand compared to $9.4 million in cash and cash equivalents at December 31, 2014. We estimate that our available cash and cash equivalents should fund the company's planned operations into the second quarter of 2016. Additional capital will be required to complete our planned clinical and pre-clinical development. And with that I will turn the call back over to Jim.

Over the second half of 2015 and up through this point in the first quarter of 2016, Cellectar Biosciences has undergone a significant transformation. In July of 2015 the leadership team completed a thorough evaluation of the company's assets and product development and commercialization programs. The evaluation was designed to prioritize organizational opportunities and selectively invest in those assets and respective drug development programs that we believe would provide our shareholders with the greatest return on investment. To this end and to fully optimize our proprietary small molecule and highly selective cancer and cancer stem cell technology. We repositioned the company around our phospholipid drug conjugate or PDC delivery platform. We have since focused resources on our therapeutic product portfolio including CLR 131 for relapse or refractory multiple myeloma, and CLR CTX, our research and development program designed to discover new phospholipid drug conjugate chemotherapeutic product candidates. The company also initiated its research and development collaboration model. The value driving benefits of the collaboration initiative for Cellectar include an increase in the number of potential product candidates generated by our proprietary PDC delivery platform, a shift in both research and development costs and associated risk from Cellectar to partners. A real potential for accelerated advancement through the R&D phase of our drug candidates, opportunities to generate non-dilutive cash partnerships, and to secure third-party expertise and further validation of our technology along with the associated tangible and intangible benefits. In a parallel path, we have remained true to P&L management diligence and have reduced our annual cost structure approximately $3 million or approximately 30% and continue to methodically assess our P&L to identify other opportunities to enhance operational efficiencies, reduce our burn rate, extend our runway towards meaningful milestone creating opportunities for valuation inflexion points. We possess an operating plan with clear objectives, defined strategies and tactics, and have held ourselves accountable for high performance execution while sustaining a corresponding sense of urgency to recap meaningful achievements over the past few quarters. As previously stated, in August we announced the repositioning of Cellectar as a delivery platform company and introduced our oncology therapeutic focus to CLR/CTX program, as well as our collaboration model. In September, we completed an S3 bridge financing for $3.3 million which allowed us to advance our new plant and position the company for meaningful milestones in 2016. In October, we received a $2.3 million NCI fast-rack grant to further research our delivery platform technology employing CLR 125 as an oncologic therapeutic payload. In November, we announced our CTX patent application conversion which provides Cellectar with two decades of intellectual property protection for PDC's generated from our delivery platform in combination with any existing or future chemotherapeutic drug as a payload. In December we announced oncology research collaboration with Pierre Fabre laboratories, the third largest French pharmaceutical company which processes an impressive oncology research and development infrastructure. The primary objective of the collaboration is to combine Cellectar's proprietary PDC delivery platform with a selection of Pierre Fabre's natural product chemotherapeutics to convert non-targeted drugs into targeted PDC's with improved therapeutic indices. And then January of 2016, we provide a positive data from our phase 1 therapeutic trial of CLR 131 for multiple myeloma, the drug's impressive safety and activity performance data triggered advancement into the second cohort. Although we are pleased with the above stated progress and the accelerator nature of our company turnaround, the most important takeaway is that we have positioned the company to achieve near-term success. I believe it is also fair to say that the market has not been kind to our stock and that our current market capitalization does not accurately reflect the value of our technology, our recent and significant advancements, nor is it representative of the near-term performance milestones the company is now positioned to achieve over the course of 2016. We understand we have much more work to do and embrace the opportunity. However, as a result of our stock performance the company is facing a near-term challenge associated with our NASDAQ listing. As Chad described and as we have disclosed in our filings, we have and continue to respond to a potential delisting from the NASDAQ market. Our remediation plan has been developed in collaboration with external consultant expertise and has been shared with the appropriate personnel at NASDAQ. The first step of our plan was the execution of a reverse split which was announced late last week. This decision was not made lightly, however, we believe it is in the best interest of our company and shareholders and anticipate that it will also serve and solve the minimum NASDAQ market price hurdle. In terms of the minimum shareholder equity threshold, our remediation plan includes a solution which we believe will address the mitigation of this NASDAQ guideline deficiency. We will continue to keep our shareholders apprised of the management of this important issue. Let's now transition to a resurgent development updates and begin with Dr. Dr. Kevin Kozak, our Chief Medical Officer to further discuss our phase 1 study of CLR 131 for the treatment of multiple myeloma. Kevin?

Thanks, Jim. So I'd like to take a few moment to discuss our current phase 1 program examining CLR 131 in multiple myeloma. It's important to note that multiple myeloma remains an incurable malignancy of plasma cells and it's diagnosed in approximately 30,000 Americans each year, thus qualifying as an orphan disease. This human logic malignancy is characterized by both diffused distribution and radio sensitivity suggesting a systemic radio therapeutic, may have a role in the therapeutic armamentarium for multiple myeloma. While available treatment options generally achieve solid performance in newly diagnosed disease, invariably myeloma recurs in both treatment response rate, as well time to disease progression drop significantly in the relapsed and refractory settings. As a result, and despite recent expansion in treatment options. There remains a high unmet medical need. Our lead compound, CLR 131 is composed of 131, a cytotoxic radioisotope that selectively delivered to myeloma cells with our targeted PDC platform. In our multi-center, open label phase 1 dose escalation study for relapsed to refractory multiple myeloma currently underway, our primary objective is to characterize the safety and tolerability of CLR in this patient population. Secondary and important objectives includes establishment of the recommended phase 2 dose, both with and without dexamethasone as well as an assessment of therapeutic activity. In December 2015 we announced the completion of the first cohort. And in January 2016 we announce positive clinical data demonstrating CLR 131 safety and tolerability with a favorable adverse event profile. Additionally, and much to our pleasure, stable disease was achieved in four of the five patients dosed including two patients who maintained progression free survival throughout the 85-day study monitoring period. As a consequence, our Data Monitoring Committee unanimously recommended dose escalation from 12.5 mercury per meter squared to 18.75 mercury per meter squared. Our second cohort has initiated patient enrollment and we plan to present court two result and initiate cohort three during the third quarter of the year. The primary objective of cohort two is do observe the clinical safety and tolerability of CLR 131 at the higher 18.75 mercury per meter square dose and determine whether further dose escalation is appropriate. Given our genuine optimism regarding CLR 131 in multiple myeloma, we look forward to assessing drug activity in this cohort of patients just as we have in the first cohort. With that, I'm pleased to turn the call back over to Jim.

Thank you, Kevin. We remain excited about the potential of CLR 131 for the treatment of multiple myeloma. This is an extremely meaningful program for Cellectar and the many patients that may benefit from its therapy. I would now like to introduce Dr. Jamey Weichert, our Chief Scientific Officer. Jamey will provide an update on our CLR CTX Chemotherapeutic PDC Research Program, additional detail regarding our CTX collaboration with Pierre Fabre, and the review of our progress to date with our NCI funded research of our CLR 125 PDC.

Thanks, Jim. Since our last update we have continued to rapidly advance or CTX program development. We believe with the improved cancer targeting provided by our delivery platform that we can combine our PDC delivery vehicle with chemotherapeutic agents to convert untargeted drugs into new targeted agents. We expect the new targeted agent or PDC to possess an improved therapeutic index potentially impacting the original drugs efficacy and tolerability profile in a positive manner. This will also result in the creation of new products; establish new patent life and providing meaningful lifecycle management resource. To date, we have initiated work with a number of on-market generic chemotherapeutic. We have focused on our paclatexal series of PDCs to fulfill our near-term goal of further validating in vivo cancer tumor targeting with chemotherapeutic payloads via our PDC delivery platform. Furthermore, we remain focused on developing the research capacity to assess in vivo targeting for greater numbers of chemotherapeutic PDC's more efficiently and rapidly. As you may recall, our delivery vehicle has demonstrated a cancer targeted preference of approximately six to ten fold depending on cancer type. We believe a modest shift. Even to two to one targeting preference may have a meaningful impact on the adverse event profile of some chemotherapeutics? To date with our paclitaxel series of distinct PDCs we have completed larger scale synthesis, formulation without Kremafor [ph], an in vitro cytotoxicity assay and plasma and liver enzyme stability assays. I say the Kremafor EI formulation removal as it is a component of the currently utilized paclitaxel formulation there is known to create a significant increase in adverse events. From these results we have selected CLR 1602 as the lead for subsequent tumor targeting in vivo studies. To accomplish these near-term goals for the future studies, we have completed the synthesis of deuterated CLR 1602, as well as a deuterated form of our delivery vehicle. The deuterated form of our delivery vehicle will allow us to more efficiently assess specific PDC tumor targeting. In collaboration with our selected CRO partners, we expect our in vivo studies involving tumor bearing animals to provide proof-of-concept data in Q2 of 2016. As a first step in building out our collaboration model and advancing R&D in partnership with third-party expertise and resources, Cellectar has engaged in a research collaboration with Pierre Fabre. We are extremely excited about this synergistic relationship, the objective of this collaboration is to combine Cellectar's PDC platform with a selection of Pierre Fabre proprietary chemotherapeutics. Some of these not targeted agents have demonstrated early promise. However, Cellectar and Pierre Fabre believe converting these agents to targeted drugs will enhance their respective product profiles. These new PDCs will be designed to exhibit high selectively toward cancer cells in order to expand therapeutic index and provide improved clinical performance for otherwise highly potent, but on targeted agents. In other words, the clinical benefits of our chemotherapeutic PDCs may include enhanced or similar efficacy of these untargeted agents as well as an improved adverse event profile. As part of our collaboration, Pierre Fabre will provide their proprietary chemotherapy payloads and their extensive oncology research experience in selected resources while Cellectar will provide our platform technology and related expertise conjugating oncologic payloads with our PDCs small molecule delivery vehicle. In summary, the primary objective of this research collaboration is to co-design a library of PDCs and achieve in vivo proof-of-concept of the superiority of these PDCs to the corresponding untargeted payloads. Pierre Fabre has been granted the option to license and enroll of the new PDCs developed as part of our collaboration. While Cellectar will own all intellectual property associated with the newly developed PDCs. Jim?

Thank you, Jamey. We fully understand the upside potential this collaboration may provide. Pierre Fabre possesses world-class oncology R&D capabilities which we believe will accelerate that development and further validation of our PDC platform. We look forward to sharing more about the accomplishments of this collaboration in the near future. Jamey will now provide an update on our CLR 125 research program initiated last quarter.

Thanks, Jim. As we previously stated, 125 is a unique grey-isotope with well described radio biologic advantages for the treatment of small volume disease including micro-metastasis. Our NCI funded SPIR grant was awarded to allow for the further evaluation of these characteristics, our delivery platform and CLR 125 in a preclinical setting. If warranted, the company may advance the research into the clinic as part of the second phase of the $2.3 million award. Pre-clinical phase of the research grant was initiated on September 30, 2015 and we're pleased to report the following. We have strengthened the CMC portfolio for CLR 125 which has demonstrated adequate radio chemical yield and purity. We have also initiated stability testing on the final product. We have completed ex-vivo tissue biodistribution studies with the product as well as in vivo tumor targeting validation with micropat CT scanning. We also believe we have establish the maximum tolerated dose for subsequent efficacy trials. The first phase of the NCI award will be completed by the close of the second quarter of this year and we will provide an update in the third quarter. The company will review the pre-clinical data and product development and commercialization viability and once we understand all related resource opportunity costs, we will then determine if initiation of the clinical work as part of the second phase of the grant is warranted. Back to you Jim.

Thanks again, Jamey. I trust that with our execution versus clearly defined objectives and continued progress with identified corporate priorities that our shareholders are becoming more comfortable with this management teams performance which includes the data results from the first cohort of our multiple myeloma study which exceeded our expectations and was delivered at least three months ahead of guidance. Optimism regarding the large rapid advancement and tremendous upside potential of our CLR/CTX chemotherapeutic conjugate program including the conversion of a patent designed to protect this program and its assets through November 2034. The team also remains highly energized around the Pierre Fabre collaboration which is formally executed less than four months after the initiation of our collaboration model. We are further researching our delivery platform and the new therapeutic PDC CLR 125 through a fully funded NCI grant of upto $2.3 million. Through P&L diligence, we have reduced annual expenses by approximately $3 million representing an approximate 30% reduction in our cost structure while enhancing operating efficiencies. We understand that these achievements have positioned Cellectar for a potentially transformational year in 2016. We are excited about the near-term milestones including a quarter two CTX program update providing an early read on in vivo targeting with one of our paclitaxel PDCs, the Q2 publication of a patent which will bolster our intellectual property portfolio. And protect our CTX PDCs through November 2034. Completion of the CLR 125 pre-clinical in vitro and in vivo research in quarter two with an early Q3 program update. A CLR 131 multiple myeloma study performance update for cohort two, as well as the initiation of cohorts three in quarter three. Additionally, we will provide progress reports under CTX Pierre Fabre collaboration. And of course, we look forward to the announcement of additional events and milestones as they occur. We thank you very much for your participation on this call and your continued interest in Cellectar. At this time, Chad, Jamey, Kevin, Patrick and I welcome any questions that you may have.

[Operator Instructions]

While we wait for questions from the queue, we'd like to address some of the questions we received via email over the last several days. The first question asks can you please comment on how the initial data you observed in your first cohort of patients in the multiple myeloma study compared to your expectations.

Jim, maybe I'll handle that. I want to say it briefly it exceeded our expectations. As stated earlier, the primary objective of the study is to observe the safety and tolerability of CLR 131 in this patient population. Secondary objectives included the observation of activity and efficacy. We are very pleased with the adverse event profile and this clearly met with our expectations. With respect to the observation of bioactivity and efficacy we were also pleased with the number of patients that exhibited stable disease as well as the duration of that stability. Two of these patients in the cohort have now exhibited stable disease beyond 115 days or approximately four months. This data clearly exceeded our expectations and as a result, we remained very encouraged about our second cohort. This is already begun enrolling patients at 50% escalation in dose. So we very much look forward to providing further updates on the results from this next cohort and remain highly optimistic.

Thank you, Kevin. The next question we received reads why did you implement the reverse stock split and what are the near-term benefits. I will turn this question over to Chad for comment but as a reminder and for our listeners, the stockholders approved the reverse split at a special meeting held on February 8. Notice of the split was provided by NASDAQ as well as Cellectar on Friday March 4 and the split went live this Monday which I believe wasn't dated March 7. Chad?

Thank you, Jim. We believe there are important benefits for our company resulting from this reverse split. In addition to enhancing our continuing efforts to remain listed on NASDAQ which among other things requires our stock be at a bit price of $1 or higher. We believe the reverse split will better position the company to attract capital in future financing transactions. Further, with a focused investment of additional capital to drive the clinical and research programs just discussed we believe there is a significant opportunity to create meaningful stockholder value.

Thank you, Chad. I'll turn the call back over to Jim.

Okay. Thank you, Jules. I would once again like to thank everyone for joining us on today's call. My hope that you found the information and discussion to be of value and will continue to follow our progress and unless there is any other questions then we look forward to speaking with you again in the very near future. Thank you.

Ladies and gentlemen, thank you for your participation in today's conference. This concludes the program. You may now disconnect. Have a wonderful day.