Small Cap Profits Exclusive CEO Interview's

www.SmallCapProfits.com

Cellceutix CEO Interview

Participants

• Dominick Bianco
• George Evans

Dominick Bianco:Good morning this is Dominick Bianco, Senior Financial Analyst for SmallCapProfits.com. I am on the phone today with George Evans, the CEO of Cellceutix CTIX.OB on the bulletin board listings. George we really appreciate your time and our subscribers are looking forward to hearing about your company, before we get started tell us some more about your background and little bit about the background of your company.

George Evans: Okay, sure. My background is I have a law degree and an M.B.A degree from Columbia University and I was a lawyer at Pfizer from 26 years. When I left Pfizer, I was the General counsel for Pfizer's worldwide prescription drug business, which was 40 plus billions dollars in sales and I cannot remember the number of employees, about 70 or 80 thousand, so a pretty big business. I basically grew up in the pharmaceutical industry as I have been in my whole career and I have done all sorts of different things from transactions to regulatory stuff to litigation and IP strategy. I am sort of a pharmaceutical lifer I guess. I left Pfizer in 2006 and a few months after that I got together with Leo Ehrlich, who is our CFO, and Krishna Menon, who is our Chief Scientific Officer, and we started Cellceutix. The Company right now has a pipeline of 8 compounds. We started off focusing on oncology and inflammation and we branched out a little bit into neurological disease, which I will talk about in more detail in a second. Out of those 8 compounds, we have 3 active projects. The lead compound is called Kevetrin, which is a cancer compound. The second compound we are working on is called KM-391, which is being developed for autism. The third compound that is active is called KM-133, which is being developed for psoriasis. All these compounds are in the preclinical stage, but Kevetrin could be in phase 1 human trials by the end of the year. We got a lot of activity and we made a tremendous amount of progress over the past 12 months.

Dominick Bianco:You plan on being in phase 1 with Kevetrin by the end of the year. Do you see anything that would prohibit you from going into phase 1 of the clinical trials?

George Evans: No! Not at all. We finished all our safety pharmacology work. As you probably already know, the FDA requires three safety pharmacology studies before you file your IND, one in the cardiovascular system, one in the central nervous system, and one in the respiratory system, and we have completed all those. We do not see any issues with them at all. We are also in the process of finishing up two toxicity studies, one in rats and one in dogs. Again, these are standard things required by the FDA. We are pretty close to done with those things. We should be done within a month, I would say. We are just waiting for final reports now and based on our observations so far, we do not see anything that is going to be a major problem in terms of going forward. We think that we are well positioned to move forward pretty rapidly to file our IND and then move on to the phase 1 study.


Dominick Bianco:How are you currently funding all these advancements?

George Evans:Up until now, we have been funding internally. We have a little bit ofoutside money, but essentially we have been funding through the officers’ contributions, either in cash or in services. We’ve done that for strategic reasons because we want to make sure that when we actually do go out and look for outside funding, which of course is inevitable, that we have reasonable valuations. The strategy has been to get to the IND filing stage for Kevetrin before we go out and look out for funding.

Dominick Bianco:Before we move forward on the Kevetrin let’s just go back over KM- 391 for the autism. What is the time horizon on that product?

George Evans:Where we are right now we have done proof of concept studies. We have done 3 reasonably complex animal studies and in those animal studies we looked at both intermediate endpoints that are associated with autism and then actual behavior endpoints in the animals. In each of those studies we’ve seen pretty good results. The intermediate endpoints are things like serotonin levels and brain plasticity and we have seen the animals that are treated with our compound have serotonin levels increased quite a bit as well as their brain plasticity. When we measured the behaviors in the animals those have also gone significantly towards normal behavior. So we are pretty encouraged in terms of the proof of concept. The next step really is to start looking at the safety pharmacology and toxicity studies, which probably take somewhere in the neighborhood of a year. So I think our plan is to try to finish those by the second or third quarter of next year.

Dominick Bianco: As far as that drug goes, is that something that is going to be given to kids? What age are you anticipating?

George Evans:Well, the patient’s population is certainly going to be largely children. I do not think we really know enough at this point to know exactly what the age group is going to be, but the onset of the condition is essentially from birth. So, the likelihood is that will be looking to use it in fairly young children.

Dominick Bianco:Is this a drug that you anticipate them being on for life?

George Evans:It could be. Again, we don’t know enough to know that, but the indication at this point is going to be a chronic therapy as opposed to something where you just give a few doses and then the condition is somehow cured. I personally think it’s going be a chronic therapy.

Dominick Bianco:Is the KM-133 a cream or a drug?

George Evans: We have been looking at it as an orally administered product up to now. There is certainly the possibility of developing a topical as a sort of a line extension, if you will, but right now we have been focused on oral administration.

Dominick Bianco:What is the time horizon on that product?

George Evans: That one is a little less certain, but we were hoping that we could get that one into clinical trials within a couple of years. I can’t be any more specific than that atthis point. [By the time this interview appears we will have announced that we have retained Destum Partners to look for a development partner for KM-133. We need to modify this response to stay current with the latest press release. The next response has been modified as well.] KM-133 is a product that has had strong efficacy results and a large market potential, but we have to focus our resources. After a lot of thought, we decided that the best way to create value for our shareholders was to take a little different approach for this compound. We selected Destum because they are very experienced in dermatology and have had a lot of recent success in completing deals. The timetable on KM-133 is going to be determined by the speed in which a partnership is established and the aggressiveness brought forth by the new partner in the development of KM-133. Potential revenues for us will be based on milestone developments.

Dominick Bianco:So your two products closest to the market would be Kevetrin and the KM-391?

George Evans:Probably. You know, part of that is just we can’t do everything and so we are focused on Kevetrin and the autism compound right now. The progressions with KM-133 are in the hands of Destum Partners at this moment with the goal to bring it to market as soon as possible.

Dominick Bianco: Can you tell me a little bit about the background of your chief scientist?

George Evans:Sure. Krishna Menon. He has trained as a veterinarian and pharmacologist and he is very experienced, I would say, as a cancer pharmacologist. He has worked with the Dana Farber Cancer Research Institute and Bayer and Eli Lilly in their cancer groups and he’s done for these different groups early stage animal studies on a lot of different compounds. He was part of the team at Eli Lilly that developed Gemzar, which is a highly successful compound. In addition to that, he has run his own contract research organization, which is called Kard Scientific and they’ve done animal studies for a lot of major pharmaceutical companies. For Cellceutix, they have done the bulk of the early stage proof of concept studies which we have done for all other compounds. He is a highly experienced cancer researcher and he has got contacts both in the industry and academia.

Dominick: How long has the company been public.

George Evans:We went public in December of 2007.

Dominick:Was that with a reverse merger or an S1?

George Evans:It was a reverse merger.

Dominick Bianco:Was that in advance of raising capital?

George Evans:Yes, but to be perfectly frank, just after we did that the markets went in the tank. It turned out that maybe our timing wasn’t the best but we think at the end ofthe day it will give us an advantage in raising capital

Dominick Bianco:How many shares are issued and outstanding?

George Evans:We have about 92 million shares.

Dominick Bianco:How many shares are owned by the Officers and Directors?

George Evans:Certainly the majority. I could not give the actual number of that. I would say it’s in the 80% range between officers, directors, and people who are closely associated with the company in various ways.

George Evans:Right.

Dominick Bianco: At what point do you think you need a partner to fund the further development of these products?

George Evans:As I said before, our strategy has been to get to the IND filing for Kevetrin, which we are hoping will be before the end of third quarter of this year. At that point just because of the expenses associated with the phase 1 study itself, we will probably go out looking for some additional capital.

Dominick: How much money you are looking to raise?

George Evans:There are a lot of different possible scenarios and they all depend on
valuations, but let me look at it this way - We have a couple of main things we need to
do. One is to get Kevetrin through phase one and the second priority for us is to get the
autism drug to the IND filing. Our estimate at this point is that in order to get Kevetrin
from where we are now through phase 1, it will cost us $2 million and to get the autism
drug the IND it will cost us about $1 million.

Dominick: Currently your company has a market capital of around $50 million. Do you think that accurately reflects the value of the company?

George Evans:You know I think it is probably a fair evaluation at this point. But you know, what I see is some inflection points coming in the pretty near future, obviously the IND filing being one and the actual start of the phase 1 study being second. So those are pretty near term events I think. Those I think could have a major impact.

Dominick:On your balance sheet you have no long-term debt and roughly $1 million in short-term debt. When does $1 million debt come due?

George Evans:The $1 million in debt essentially is money loaned to us by the officers. It is not going to be any kind of issue for us. We have a smaller amount that comes due at the end of this year, but again that money is from people having a big stake in the company so it’s unlikely that it is going to be a major issue. Even if for some reason they decide they want to get paid back it is not enough money to make a difference.

Dominick:On the account payable side you have almost $3 million in the accounts payable. Is that due to insiders or is that due to third party vendors?
George Evans: The vast majority of that is to insiders. I could not give you the exact members. We have a little-bit outstanding to the folks who are doing Tox studies, but the best majority of the payables are to the officers.

Dominick:Do you think at some point of time you are going to convert that to equity or you are going to put it in the books as debt in accounts payable?

George Evans: You know my guess is that some of that is going to be converted but only a small part of it is literally convertible at this point. We may be able to arrange conversion of some of the other stuff, but quite frankly, we haven’t really talked about it.

Dominick:You have roughly eight products. Were those all developed by your two scientists or were any of those technologies acquired?

George Evans:It’s a mix. I won’t be able to give you the exact numbers off the top of my head. Several of them have been developed by Dr. Menon himself and a few of them have been developed by themselves or other folks in conjunction with Dr. Menon. The autism compound, for example, was developed by some folks in India working with Dr. Menon as a joint effort.

Dominick:Can you tell us a little about your relationship with Toxicon?
George Evans:Yes. Toxicon is doing our safety pharmacology and GLP studies. They are a vendor really, but we’ve had a very good relationship with them. They have been very professional, I would say, and very prompt in terms of getting the work done and it appears that we have been down there meeting with them at least every week and it appears that their work has been quite high quality and we are very pleased with the work that they have done for us.

Dominick:Before we conclude this interview is there anything else you would like the subscribers to know about you or the company.

George Evans:I think the thing that I would say is, we have a very strong portfolio for a small company and out of the 8 compounds we have got 3 that are active projects. That, I think, makes us very attractive compared with the other companies that are really based on single products or a single technology.

Dominick:On behalf of SmallAapProfits.com, thank for your time Mr. Evans and our subscribers will look forward to hear good things from your company in the future.

George Evans:Thanks for having me on.

___________________________________________________________________________