Moleculin Biotech Q1 2023 Earnings Call Transcript

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May 11, 2023

There are 7 speakers on the call.

Operator

Hello, and welcome to the Molecular Biotech Q1 2023 Quarterly Update Conference Call and Webcast. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Janine Thomas, Investor Relations. Please go ahead, Janine.

Speaker 1

Thank you, Kevin. Good morning, and welcome, everyone. At this time, I would like to remind our listeners that remarks made during this webcast may state management's intentions, beliefs, expectations or future projections. These are forward looking statements and involve risks and uncertainties. Forward looking statements on this call are made pursuant to the Safe Harbor provisions of the federal securities laws Some of the factors that could cause actual results to differ materially from these contemplated by such forward looking statements are discussed in the periodic reports Molekulin files These documents are available in the Investors section of the company's website and on the Securities and Exchange Commission's website.

Speaker 1

We encourage you to review these documents carefully. Additionally, certain information contained in this webcast relates to or is based on studies, Publication, surveys and other data obtained from 3rd party sources and the company's own estimates and research. While the company believes these 3rd party sources to be reliable as of the date of this presentation. It is not independently verified and makes no representation as to Any data discussed regarding clinical trials and progress are considered preliminary and subject to change. Joining us on today's call from the Molecular's leadership Walter Klimt, Chairman and Chief Executive Officer Doctor.

Speaker 1

John Paul Womack, Senior Chief Medical Officer and Jonathan Foster, Executive Vice President and Chief Financial Officer. I would now like to turn the call over to Walter Klutz, Chairman and CEO. Wally, please proceed.

Speaker 2

Thanks, Janine. We're going to keep this call relatively brief and highly focused on clinical results. First, though, I'd like to add some context here. We think there's a serious disconnect between today's share price and what is actually happening with our clinical data. So I I'd like for us to take a deeper dive into both AML and soft tissue sarcoma.

Speaker 2

In yesterday's press release On clinical activity, we provided a very important detail about the final cohort in our MB105 clinical trial. That's the single agent trial in AML and the final cohort had 5 patients treated at 2 40 milligrams Per square meter. The official clinical study report or what we call the CSR Listed 1 CR, that's a complete response and 3 PRs or partial responses. But as we point out in the release, 2 of those subjects listed as PRs actually cleared their bone marrow blast below 5%, which Per the protocol and per industry standards constitutes a complete response, not a partial response. By the time the CSR was audited for publication, the clinician who had labeled those subjects as PRs instead of PRs had already left for another institution and position.

Speaker 2

But based on the analysis of our CMOs, we believe that these were both truly Complete responses. So why am I focused on this detail? It's because in accordance with our protocol And with the industry norm for AML, we believe we didn't just have 5 of the last 8 patients treated respond, Four of them were complete responses and to have a 50% complete response rate in mostly elderly and heavily pretreated 4th and 5th line AML patients. Well, we think that is remarkable. And we want you to understand why the entire Molecular team He is so excited about the progress we're making.

Speaker 2

Another important nuance in our data is playing out in soft tissue sarcoma. With nearly half of our MV-one hundred and seven trial enrolled, we're seeing a preliminary median Progression free survival or PFS approaching 3 months. While that is a Significant improvement over historical norms for untreated patients in other clinical trials. We believe it's actually much better than it appears. And that's because most prior clinical trials of advanced soft tissue sarcoma patients Include a spectrum of patients from those who are simply no longer receptible, those are patients whose PFS is expected to be much better than average, To those who have lung metastases and those are the folks with PFS that is expected to be much, much worse.

Speaker 2

In MB-one hundred and seven, we are only enrolling the latter, and that's to say only patients with lung metastases and with the worst possible prognosis. So for us to be nearly doubling the historical median PFS expected in untreated Advanced STS patients, but to do so while treating only lung mets patients. Again, we think that is remarkable. And yes, these data are preliminary and we have more patients to recruit, But thus far, we are performing above expectations in arguably the worst possible patients. And we're doing this without the cardiotoxicity Expected from currently prescribed anthracyclines.

Speaker 2

If you're an investor in Molecular or considering an investment, we think this is where you should be focused. This is where the most immediate opportunity for success can be envisioned. And it's why I'm eager to have our Senior Chief Medical Officer, Doctor. Paul Womack expand further on our clinical progress. Paul?

Speaker 3

Thank you, Wally. As Wally noted, we at Molekulin are extremely pleased with our progress to date. Our lead candidate, anamycin has now reached the Phase 2 stage of clinical development For our soft tissue sarcoma indication and we expect to reach Phase 2 stage for acute myelogenous leukemia Later this year. This slide summarizes our current status with anamycin in soft tissue sarcoma. And as you can see, we have successfully completed Phase 1b with the identification of 3 30 milligrams per meter squared As the recommended dose for Phase 2 development, we are now just over halfway through enrollment for the Phase 2 component.

Speaker 3

In this Phase 2 portion of the trial, anamycin has demonstrated a progression free response 60% of subjects showing stable disease through 2 or more cycles of therapy, With 3 subjects continuing with the study drug. One subject has exhibited stable disease after their end of Cycle 4 scan and has now received 6 full cycles of therapy. For the 3 subjects With stable disease not continuing with study drug, they are still being followed for progression free survival And for all subjects, overall survival is being monitored. These data are preliminary and are of course subject to change. Finally, as has been true of all clinical trials of anamycin and despite Prospective methodical search plans, we have yet to identify any Cardiac toxicity from manamycin in this or in any study.

Speaker 3

Moving on to These were standard dose escalation Phase 1 studies. Not shown on this slide is their U. S. Trial MB-one hundred and four. In our European 105 study, we were able to dose escalate 1st, this was a monotherapy trial and we recognize that it is highly probable that If and when anamycin is approved for marketing for acute myelogenous leukemia, it will be as combination therapy.

Speaker 3

The reason our initial trials were not as combination therapy, but rather as monotherapy were routine standard FDA demands for new drug testing. The second reason for stopping the monotherapy trial Was that newly finished animal studies had documented that significant efficacy for anamycin existed when combined with cytarabine When treating acute myelogenous leukemia. The final reason was that as is shown on this slide, At the 2 40 milligram per meter square dose,

Speaker 4

4 of

Speaker 3

the 5 patients had either a partial That's an 80% response rate. Of these But as Wally mentioned, it should be noted that 2 of the 3 patients rated as partial responders Had their bone marrow blast percentages fall to less than 5%, which is the standard definition of a complete responder. However, since the investigator classified these two cases as partial responders, they are so recorded in the clinical record Despite their having met the laboratory criteria for a complete responder. In light of these three factors, We have therefore moved forward to the combination therapy stage of clinical development in patients with acute myelogenous leukemia. In this study, patients with refractory or relapsed acute myelogenous leukemia are being treated with anamycin In combination with cytarabine, this initial combination clinical trial will begin with the Standard Phase 1b dose escalation phase.

Speaker 3

Once the Phase 1b component has identified the recommended Phase 6 active sites in Europe participating in the trial and we anticipate other sites in Europe going active shortly. We have already completed the first cohorts in the dose escalation part of the trial. Among the 3 patients treated at 190 milligrams per meter square in this initial cohort, one patient achieved a durable Complete response. And this was in a 78 year old patient who had received 2 As Wally noted, overall among the last 8 patients treated in our AML clinical trials, 4, had their blast counts fall to less than 50%, which again is And we anticipate reaching the Phase 2 stage of the trial later this year. Finally, As was true in the soft tissue sarcoma study, we have yet to identify any cardiac toxicity.

Speaker 3

Moving on to the next slide. Our immune transcription modulator 1066 Is currently being tested in multiple Phase 1 clinical trials in patients with various types of brain cancer, Primarily types of glioma and medulloblastoma. These clinical trials have been and are being conducted The various prestigious medical university hospitals, including MD Anderson, Emory University and Northwestern University. These Phase 1 clinical trials have established that 8 milligrams per kilogram is a safe dose And have documented both clinical and radiological evidence of efficacy. Although to date the data are limited, We are currently evaluating possible strategic partnerships and collaborations to assist in the development of 1066.

Speaker 3

And I should also note that we have received orphan drug designation for the treatment of brain tumors As well as rare pediatric disease designation from the FDA for 1066. Finally, I would like to discuss our 11/22 portfolio. These are our metabolism glycosylation inhibitors. Among the agents in this portfolio, our lead compound that is 11/22 Safety of 11/22 and defined its pharmacokinetics. To that end, this drug is now ready to begin Phase We believe there are 2 potential avenues for the 11/22 portfolio.

Speaker 3

1st, We have animal data suggesting it may have benefit in certain types of cancer, which is believed to be due to the fact that Cancer cells are heavily reliant on glucose for their metabolism. In light of this possibility, We requested and were granted orphan drug designation from the FDA for the treatment of certain types of brain cancer, that 11/22 will be beneficial in treating certain types of potentially deadly viral diseases Since many of the types of viruses that infect humans require modifications of the Going forward, we are currently looking for potential collaboration opportunities for our 11/22 portfolio. I will now turn our call over to our Chief Financial Officer, John Foster.

Speaker 4

Thanks, Paul. Research and development expense increased by roughly $1,000,000 to $5,700,000 for the Q1. This increase of just over $1,000,000 is mainly related to the acquisition of our technology rights in roughly 10% of the world Via the termination of a sublicense. Otherwise, we see our clinical costs are trending downward As we dropped from 3 active internally funded trials to 2 compared to a year ago. As we continue to focus our internal funds on anamycin trials, We experienced an increase in G and A expense by roughly 8% for the Q1 versus 2022.

Speaker 4

This increase is related to legal services and consulting fees.

Speaker 3

We ended the quarter with over

Speaker 4

$37,000,000 in cash, which we believe Comfortably get this into the Q3 of 2024. So where are we delivering on data? Well, for anamycin, we continue delivering data on the Phase 1b portion of our Phase 1b2 Clinical trial for using amylcin in combination for the treatment of AML in Poland and Italy, MB-one hundred and six. The last time we spoke, we just started this first the first cohort. We have now recently announced, as Paul and Wally have pointed out, Conclusion of that first cohort and dosing and recruiting in the 2nd cohort as we march towards a recommended Phase 2 dose for our Phase 2 expansion For AML trials, this is moving quickly for us.

Speaker 4

And we hope to announce We hope this cohort leads us to opening the Phase 2 expansion portion, which will bring along We will publish the detailed MB-one hundred and five clinical study report in the near term, expanding on the top line data already presented. We will continue giving you quarterly updates on the STS trial here in the U. S. And also on the STS trial in Europe. We continue to expect to announce with regard to our other core technologies, the NIH study with our WP1122 portfolio.

Speaker 4

We also expect to further collaboration, as Paul just mentioned, on treating GBM using WP1066. And additionally, for WP1066, We should see top line results for the Phase 1 pediatric trial and later expansion into Phase 2. All of these efforts will be mostly externally funded. So you can see our Continued focus with our funds internally is on providing clinical readouts for anamycin,

Speaker 2

Thanks, John. So clearly, we're encouraging everyone to pay close attention to anamycin. The reason is, this is where we are expecting to deliver what we would call As Paul pointed out, WP1066 in combination with radiation is on the verge We expect significant announcements here, by the way, before the end of the year. And WP112 2 Has now begun receiving research support from the federal government and we believe there is potential for still more external funding support For this new class of anti metabolites, the early indications are promising and the turning point Phase 2 data Pressure on values across the board and we're seeing historic lows. But we also believe that strong Phase 2 data and It just makes the upside potential that much greater for Molecular.

Speaker 2

So thanks for your time and definitely stay tuned for our next And with that, Janine, I'll hand it back to you to open up for questions.

Speaker 1

Thank you. Kevin, please proceed.

Operator

Thank you. We'll now be conducting a question and answer session. Our first question today is coming from Jonathan Aschwalth

Speaker 5

I was wondering, Are the 2nd cohort Phase 1b AML combo therapy patients, are they being dosed yet or have they still just been identified? And if yes, how many have been dosed?

Speaker 2

So we have Just begun dosing the 1st patient in that second cohort. Additional patients have already been identified. So Jonathan, our expectation is that This cohort is going to fill up quickly. Obviously, you can always have screening failures and that kind of thing. So we don't want to overstate it, but It looks like this cohort is going to fill up quickly.

Speaker 5

Okay. So we should still see the kind of updates. I mean, I'm assuming that as If the data are more positive versus less positive, then you're not just going to be waiting until these quarterly calls to update data. You'll just come out with

Speaker 2

So we do have the Latitude, And John, correct me if you feel I'm misstating this, but we have the latitude to announce on a cohort by cohort basis where we're still in dose escalation mode. So yes, what we've defaulted to is to say At a minimum, you can count on us giving updates on a quarterly basis even when we're not in a dose escalation environment. So John, is that a fair summation?

Speaker 4

Correct. Jonathan, we will announce the end of that cohort when it happens and we'll announce the efficacy whether it's good or bad. And hopefully that will happen before the next quarter conference call.

Speaker 5

Okay. I was going to ask you about granularity on other data release timing, but the slides were more granular than the 2 press So that's fine. But the one I would like to ask for is it really sounds like early 2024 for the U. S. Soft tissue, lung met data.

Speaker 5

Sounds reasonable for the top line final data for that?

Speaker 2

Well, I think it continues to recruit pretty rapidly. We're technically in terms of the traffic we've seen, we're technically a little past the halfway point now. So if it continues at that pace, I think we might beat that timing estimate. And keep in mind that depending on the flow of the data and how consistent it is, we may It's entirely possible that we could call a time out and go visit with the FDA even before filling out all 28 patients in the expansion. So I mean, I think you're technically correct.

Speaker 2

If this goes all the way to term, full 28 patients, Probably the formal presentation of the completed data set would be early 'twenty four. But At the pace we're going and given the consistency of how patients are responding, we might not have to wait that long before we ask for an audience

Speaker 3

If I can clarify one thing. When you say the top line data, I would point out that there are 2 types of top line data here. Progression free survival is what the critical decision is. And as Marley said, we may and I think John, we may be there before the end of the year. The other is overall survival And there is no way we're going to be overall survival by the end of the year, because overall survival, you have to have a 50% plus 1 of Patients die, and that's not going to happen from what we're seeing before the end of the year.

Speaker 3

So progression free survival, as Wally said, that's possible this year. Overall survival, there won't be. But we will not need overall survival if we want to meet with FDA.

Speaker 5

Right. And if PFS looks the way you wish, Which is the primary endpoint, which is what I was talking about. Is it the case where OS could trump that and bring A good looking PFS down in relevance at the OS was unimpressive or is PFS standalone Okay for registration.

Speaker 3

My answer is that's going to be data dependent, data driven. It will depend on what the data show. Certainly, we would like for both of them to be great. But if progression free survival is adequate to just by approval, then we would go to FDA with just that. And do you always if you file an NDA, you give a 4 month safety update roughly to the NDA while the FDA is reviewing.

Speaker 3

And for this type of trial, frequently the 4 months safety update, if you didn't have overall survival

Speaker 2

Thanks, Jonathan.

Operator

Thank you. Next question is coming from Jeff Jones from Oppenheimer. Your line is now live.

Speaker 6

Thanks guys. Good morning and thanks for taking the question. I guess two questions. In terms The number of patients who are enrolled who are already above the lifetime maximum for docs, what does that look like in both the AML and STS studies? And then In terms of AML, what is the plan for dialogue with the FDA on that front, so you can explore the

Speaker 2

Sure, sure. And thanks for the question. I'm going to defer to John as the keeper of the headcount data. But while he's maybe Looking for that specific point in a couple of comments. One, among the people that we've taken above the lifetime maximum, Now getting to be a pretty substantial number.

Speaker 2

We've had a few of those people reach as high as 1800 per square meter, whereas the lifetime maximum is $550,000,000 And so we're not just taking them slightly over that threshold dramatically over that threshold. And historical data supports that 65 Percent of all patients that are taken above the 5 50 lifetime maximum will exhibit some evidence of Cardiotoxicity. And again, in our case, 100% of them have exhibited no evidence of cardiotoxicity. So we're pretty proud of the track record here. John, do you have a current count on the total number of people that have been taken over that limit?

Speaker 4

No, not anything updated that's currently out on our beyond what's on our

Speaker 2

corporate deck. I think the last number was 18, I would just tell

Speaker 4

you from a standpoint with this both trials moving so quickly, We really don't want to report on that until that data has been audited and confirmed.

Speaker 6

Understood.

Speaker 2

And I'm sorry, what was the second part of your question?

Speaker 6

The second question was on AML and Discussions with the U. S. Discussions with

Speaker 2

the FDA. Sure. Paul, do you mind characterizing how you feel like That FDA discussion on AML would need to go?

Speaker 3

Yes. Well, first, just to remind everybody, This trial is unblinded. Everybody gets the drug. So we see the data in real time. And We are obviously not going to go meet with them after a dose escalation, it would be after the expansion cohort.

Speaker 3

So we would be watching to see what effect we're having in the expanded cohort, which won't start until sometime later this year. We would meet With FDA, when we see enough efficacy, both in terms of the magnitude of it and as far as Talking about the statistical confidence intervals in the data, where we think we have established that this drug works for AML and combination therapy. As Wally mentioned, right now, recently, once we've gotten this drug up to around 200 or more milligrams per meter square, We're getting about a 50% complete response rate. That in the patient population we are treating, that has got our attention. And if such trends were to continue, then we would stop the expansion cohort whenever we feel we have enough data establishing efficacy.

Speaker 3

We would stop and have an end of Phase 2 meeting with FDA. As far as the previous Question, let me just point out one thing about how many people went over the 5 50 milligrams per meter square antrocycline dose. Most of the patients even before they started anamycin had been on another anthracycline in strong dosages. So most of the patients I've gone over the recommended limit. I don't have the exact numbers either, but almost all the patients had prior antracycline therapy.

Speaker 3

So almost all of them are over the 5.50 limit.

Speaker 6

Okay. That's sort of what I was anticipating and appreciate the additional clarity And I assume, since those things are linked, the talks And discussions with FDA on AML or not tox, but cardio tox specifically, you'll also be able to leverage the Data you've been generating from the STS trial, as well as the AML trial when you sit down with the agency on that front?

Speaker 2

100%.

Speaker 3

That's correct, because when you write for an NDA, the integrated summary of efficacy, you're only talking about efficacy in that indication. But when you're talking the integrated summary of safety, you will talk and pool safety data from all clinical trials for all indications. And as I noted, we have yet to see a single patient develop an impairment of ejection fraction Among all the patients treated in all the indications and all the clinical trials, so we think the data are becoming compelling that And anamycin does not cause the cardiotoxicity typical of all other antrocycline.

Speaker 2

And I would just add To that, to what Paul just described, I think we're aware of the fact that there are a few other antar Cyclenes out there that are in clinical development that Claim to have an improvement in the cardiotoxicity issue. But to our knowledge, we're the only ones who are Recording and reporting information as it relates to troponin levels, which are an indication for long term Cardiac impairment, the best indicator. So to the best of our knowledge, we're really the only ones that are Thoroughly evaluating cardiotoxicity with every known measure and then having it independently reviewed, in this case by the Cleveland Clinic. So we're really serious about demonstrating the safety record. And Jeff, I know we've talked about this that the liquid tumor division at the FDA Took a different view initially years ago now, but took a different view about their confidence In the absence of cardiotoxicity, then a bit later when we were dealing with the solid tumor division, They were more sanguine.

Speaker 2

They were more convinced by our data. And of course, at that time, we had more data. And so now by the time We go back to the liquid tumor division. We're going to by comparison to the conversation we have with them several years ago, we've A mountain of data. So we're really optimistic that we're going to be able to make that point.

Speaker 6

Great. Really appreciate the additional clarity, guys. Thanks for taking the questions.

Speaker 2

Yes, you bet.

Operator

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over

Speaker 2

We think we really thoroughly covered it here. The main message Obviously, there's critical data that's going to be coming in, not just at the next quarterly call, but as it becomes available. So obviously stay tuned. We can't wait to get to the next data points to deliver to everybody. Thanks so much for your time and have a great week.

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Moleculin Biotech Q1 2023
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