Executive Summary / Key Takeaways

• Cyclacel Pharmaceuticals is undergoing a fundamental transformation, pivoting sharply away from its historical focus on clinical-stage oncology drug development towards a new strategy centered on acquiring and consolidating industrial assets, specifically bulk commodity minerals and chemicals.
• This strategic shift is driven by persistent financial challenges, including a history of losses and limited cash runway, which necessitated exploring alternatives to fund its costly biotech pipeline.
• The proposed business combination with FITTERS Diversified Berhad, a Malaysian industrial company, represents the cornerstone of this new direction, contingent on shareholder approvals and expected to close by August 31, 2025.
• Financially, the company faces substantial doubt about its ability to continue as a going concern, with cash resources projected only into the second quarter of 2025, making the successful execution of the FITTERS transaction or securing alternative funding critical.
• The fadraciclib oncology program has been discontinued following the liquidation of the UK subsidiary, with assets marketed for sale, leaving plogosertib as the sole remaining biotech asset, though its future development is contingent on securing additional financing.

A Biotech Dream Confronts Financial Reality

For years, Cyclacel Pharmaceuticals positioned itself as a pioneer in cancer cell cycle biology, dedicated to developing innovative oral therapies for oncology patients. Its pipeline, primarily centered around two clinical-stage assets, fadraciclib and plogosertib, aimed to translate deep biological insights into novel treatments. Fadraciclib, an oral CDK2/9 inhibitor, was being advanced with a precision medicine strategy, targeting specific chromosomal abnormalities like CDKN2A and/or CDKN2B deletions, which the company believed represented a significant unmet need and potential sensitivity to the drug. Early clinical data, including observed complete responses, partial responses, and stable disease in Phase 1 across various solid tumors and lymphomas, supported this hypothesis, suggesting a potentially differentiated profile within the competitive CDK space. Plogosertib, an oral PLK1 inhibitor, also showed early promise, exhibiting a novel epigenetic mechanism at low doses and potential activity in tumors with mutations like ARID1A or SMARCA, distinguishing it from other PLK1 inhibitors.

However, the demanding and capital-intensive nature of drug development, particularly for a clinical-stage company without commercial revenue, placed immense pressure on Cyclacel's financial resources. Despite efforts to advance its programs and identify promising biomarkers, the company accumulated significant losses and consistently faced negative cash flows from operations. This precarious financial state, explicitly highlighted by auditors issuing a going concern opinion, necessitated a critical evaluation of its future path.

The competitive landscape in oncology is dominated by large, well-funded pharmaceutical companies such as Gilead Sciences (GILD), Bristol-Myers Squibb (BMY), and AstraZeneca (AZN), alongside numerous other biotech firms like Cytokinetics (CYTK). These larger players possess vast resources for R&D, clinical trials, manufacturing, and commercialization, often leveraging established infrastructure and diversified pipelines. While Cyclacel's technology, particularly the potential precision medicine approach for fadraciclib and the novel epigenetic mechanism of plogosertib, offered potential differentiation and niche market opportunities, the sheer scale and financial strength of competitors posed a significant challenge to bringing these assets to market independently. Cyclacel's smaller scale resulted in higher per-unit costs and limited ability to absorb the high costs and risks inherent in late-stage clinical development and regulatory approval processes, making it vulnerable in a market where efficiency and broad reach are key competitive advantages.

The Strategic Pivot: From Bench to Bulk Commodities

Facing dwindling cash reserves and the high cost of continuing its biotech operations, Cyclacel initiated an expedited review of strategic alternatives in late 2024. This process culminated in a dramatic shift in direction. In early 2025, the company underwent significant restructuring, including a change in control facilitated by investor transactions and, crucially, the creditors voluntary liquidation of its wholly-owned UK subsidiary, Cyclacel Limited. This liquidation, effective January 24, 2025, resulted in the loss of operational and strategic control over the subsidiary and its assets, including the fadraciclib program. The deconsolidation of the subsidiary's financials led to a one-time gain of approximately $4.95 million in the first quarter of 2025, a non-recurring item that temporarily boosted the bottom line but did not address the underlying cash burn from operations.

As part of the cost-reduction efforts following the liquidation, Cyclacel determined to focus solely on the plogosertib clinical program, repurchasing certain related assets from the liquidator for approximately $0.3 million. The fadraciclib program assets, however, are now being marketed for sale by the joint liquidator, and Cyclacel has explicitly stated it has no plans to repurchase them. This marks the effective cessation of the fadraciclib program under Cyclacel's ownership.

The most significant development signaling the company's new strategic direction is the Exchange Agreement entered into on May 6, 2025, with FITTERS Diversified Berhad. This agreement proposes a business combination whereby Cyclacel will acquire Fitters Sdn. Bhd., a Malaysian subsidiary engaged in fire safety materials, waste-to-resource services, and real estate development, in exchange for Cyclacel common stock. Upon closing, expected by August 31, 2025, Cyclacel stockholders are anticipated to own approximately 80.01% of the combined entity, which is expected to be renamed Bio Green Med Solution, Inc. and continue trading on Nasdaq under a new ticker symbol.

This transaction is the first step in a stated new business plan to acquire and consolidate complimentary industrial assets, specifically core manufacturers and suppliers of bulk commodity minerals and chemicals. The strategy aims to assemble a portfolio of mature, value-add industrial businesses to generate scalable enterprises, capitalizing on the perceived price differential between public and private company valuations and leveraging the public listing for capital access and professional management oversight. This represents a fundamental departure from the company's biotech origins.

Financial Performance Reflecting Transition and Challenges

Cyclacel's financial results for the first quarter ended March 31, 2025, starkly illustrate this period of transition and the underlying financial pressures. The company reported minimal revenue ($0 in Q1 2025 vs. $29k in Q1 2024), consistent with its historical lack of product sales and the expectation of no significant revenue in the foreseeable future.

Operating expenses saw divergent trends. Research and development expenses decreased significantly to $822k in Q1 2025 from $2.80 million in Q1 2024. This reduction is a direct consequence of the strategic shift, primarily due to the cessation of the fadraciclib program following the UK subsidiary liquidation and the pausing of the plogosertib study with the old formulation while a new one is developed. Conversely, General and administrative expenses surged to $4.21 million in Q1 2025 from $1.58 million in Q1 2024, driven by approximately $2.6 million in one-time costs associated with the change of control, including stock compensation, D&O insurance, compensation, and legal fees.

The operating loss for Q1 2025 was $5.04 million, comparable to $4.38 million in Q1 2024. However, the net loss was significantly impacted by the $4.95 million gain on deconsolidation of the UK subsidiary, resulting in a net loss of only $81k in Q1 2025 compared to $2.95 million in Q1 2024. This gain, while improving the reported net loss, is a one-time accounting event and does not reflect ongoing operational profitability.

Liquidity remains a critical concern. As of March 31, 2025, cash and cash equivalents stood at $3.45 million. Net cash used in operating activities was $3.25 million in Q1 2025, a substantial increase from $0.48 million in Q1 2024, primarily due to a $7.1 million change in working capital related to the change of control, partially offset by the lower net loss (adjusted for the deconsolidation gain). Net cash provided by financing activities was $3.65 million in Q1 2025, primarily from the issuance of preferred stock. Based on the current operating plan, management anticipates that existing cash resources will only fund liquidity requirements into the second quarter of 2025. This limited runway, coupled with the history of losses and negative cash flow, forms the basis for the substantial doubt about the company's ability to continue as a going concern.

To address these challenges and facilitate the strategic pivot, the company has undertaken several corporate actions, including increasing authorized common stock to 600 million shares and implementing a 1-for-16 reverse stock split effective May 12, 2025, primarily to meet Nasdaq listing requirements.

Outlook and Risks in a New Era

The outlook for Cyclacel is now inextricably linked to the success of its new industrial consolidation strategy. Management's guidance on biotech operations is limited: future R&D expenses are expected to decrease significantly focusing only on the plogosertib program, while G&A expenses are expected to stabilize in line with 2024 levels as the company adjusts to the change of control. No significant revenue is anticipated from current operations.

The primary near-term catalyst is the proposed business combination with FITTERS. Its successful closing by the August 31, 2025 deadline is paramount, as it is positioned as the key mechanism to transition the company into its new industrial focus and potentially provide a platform for future capital raising in that sector.

However, significant risks cloud this outlook. The substantial doubt about the company's ability to continue as a going concern remains the most pressing risk. Failure to close the FITTERS transaction or secure alternative funding could force the company to severely curtail or cease operations. The FITTERS transaction itself is subject to shareholder approvals from both companies and carries a termination risk if not completed by the specified date. Furthermore, the success of the new industrial strategy is unproven. It requires effectively identifying, acquiring, and integrating industrial assets, a domain entirely different from the company's historical expertise. Dependence on the management of acquired businesses and potential significant dilution from future acquisitions to fund this strategy are also key risks. The company also remains under a Nasdaq Mandatory Panel Monitor for one year following regaining compliance with the equity requirement.

The competitive landscape for Cyclacel is transforming from one dominated by large pharmaceutical giants to one within the industrial commodities sector. Its ability to compete will depend on its execution of the consolidation strategy, operational efficiency in the new sector, and access to capital to fund acquisitions, rather than its historical strengths in drug discovery and development.

Conclusion

Cyclacel Pharmaceuticals stands at a critical juncture, having initiated a radical pivot away from its identity as a clinical-stage biotech company. Driven by persistent financial challenges and the high cost of oncology drug development, the company is now pursuing a future centered on acquiring and consolidating industrial assets, with the proposed merger with FITTERS Diversified Berhad serving as the foundational step. This strategic shift fundamentally alters the investment thesis for CYCC. While the plogosertib program remains as a lone biotech asset, its future development is uncertain without further funding. The company's financial health presents a significant going concern risk, making the successful completion of the FITTERS transaction or securing alternative financing absolutely essential for its survival and the pursuit of its new industrial strategy. Investors must now evaluate Cyclacel not on the potential of its historical biotech pipeline, but on the viability and execution risk of its new plan to become a consolidator in the industrial commodities sector, a starkly different competitive arena.