Moleculin Biotech Q1 2025 Earnings Call Transcript

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May 14, 2025

There are 7 speakers on the call.

Operator

Good morning. Welcome to the Molecular and Biotech first quarter twenty twenty five update conference call webcast. Question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to your host, Janine Thomas, investor relations.

Operator

Please go ahead, Janine.

Speaker 1

Thank you, Rob, and good morning, 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 and are based on the Lexington's current expectations and actual results could differ materially. As a result, you should not place undue reliance on any forward looking statements.

Speaker 1

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 Moleculin files with the Securities and Exchange Commission. These documents are available in the Investors section of the company's website and on the Securities and Exchange Commission's website. We encourage you to review these documents carefully. Additionally, certain information contained in this webcast relates to or is based on studies, publications, surveys and other data obtained from third party sources and the company's own estimates and research. While the company believes these third party sources to be reliable as the date of this presentation, it does not independently verify and makes no representation as to the adequacy, fairness, accuracy, or completeness or that any independent source verified any information obtained third party source.

Speaker 1

Any data that's regarding clinical trial and progress are considered preliminary and subject to change. So joining us on today's call from Molecular Leadership Team are Walter Clem, Chairman and Chief Executive Officer, doctor John Paul Mana, Senior Chief Medical Officer and Jonathan Foster, Executive Vice President and Chief Financial Officer. I'd now like to turn the call over to Walter Clemp. Well, Riley, please proceed.

Speaker 2

Thanks, Janine. Hello and welcome to our first quarter earnings conference call. For most of our investors, the focus is on the Phase three miracle trial studying Anamycin for the treatment of relapsed and refractory acute myeloid leukemia, and with good reason. This trial has now officially started with the first patient already treated and more on the way. In total, we now have 38 sites selected worldwide between The US, Europe, Middle East and North Africa.

Speaker 2

We just announced this week that we also received complete sign off from the European Medicines Agency for all nine countries that we wanted to open in the EU. That was one of the longest lead time items for getting the EU up and running. So it was a major milestone and a real show of support from the EMA for our trial design and our objectives. Also, the World Health Organization has officially recognized a new generic drug name for Anamycin, which may now be referred to in literature as Naxtorubicin. This was an important first step in actually launching Anamycin once it receives new drug approval.

Speaker 2

And, you know, compared with some of the unpronounceable crazy drug names out there, we're really pleased with naxterubicin, especially since it sounds a lot like the naxterubicin, which really plays into the next generation positioning of vanamycin. You should expect to see us using both names together until such time as we establish an FDA approved brand name, which is the next step in positioning the drug for launch. And we also announced some additional patent protection extending into at least 02/1940, these additional patents just continue to build a wider fence of protection around our core asset. We should also be announcing a date for the presentation of the final data from our MD-one hundred seven clinical trial using Anamycin to treat advanced soft tissue sarcoma. Although the preliminary numbers were impressive, we think the final data are really going to turn some heads.

Speaker 2

So we look for an announcement on the or so please look for an announcement on this in the coming weeks. Now, this graphic gives you a better perspective on the status of our site selection and approval process for the MIRACLE trial. Compared with the version from our last earnings call, we now have the great majority of countries and sites approved from a regulatory standpoint. Now we're just wrapping up hospital contracts and local ethics approvals. Just to be clear, though, the most important milestone for us coming up will be the unblinding of the first forty five patients.

Speaker 2

A lot of eyes will be on us for this data point as it should tell the world definitively that we are likely headed for new drug approval. With that said, what you see here is what gives us so much confidence that we expect to have those first forty five patients treated before the end of this year. To drive this home, just averaging one patient per site for the remainder of the year gets us there. And given the enthusiasm that we've seen from these sites, we think we're gonna outpace that rate. Now look, we we know a lot of investors think that animycin is the entire ballgame for us.

Speaker 2

And to be sure, it's where most of the attention should be focused because it's so close to NDA submission. But we do have two other very exciting technologies, and one of them is WP1066, our lead STAT3 inhibitor. Don't forget that WP1066 has already shown activity in the treatment of brain tumors, and that was with a very inefficient form of drug delivery. Well, now, WP1066 is in another investigator sponsored clinical trial, this time, in combination with radiation at Northwestern University. And since we announced this trial in September of last year, we've already recruited seven patients.

Speaker 2

That's nearly a patient per month for just one site. So this is moving quickly. Now this is still with the existing oral delivery, which we know isn't optimal. And we're collaborating with Emory University on the development of an IV delivery for October, which we think could significantly improve its activity. So we'll keep you updated as more developments occur here.

Speaker 2

Well, that gives you a high level overview of recent events. So now let me hand things over to Doctor. Paul Waynack, our Senior Chief Medical Officer, to give you a few more insights into our clinical activity. Paul?

Speaker 3

Thanks, Wally. Before I speak about the MIRACLE trial, let's catch up on our MB-one hundred and six Phase II trial, which had essentially the same inclusion and exclusion criteria, plus the same treatment regimen for patients as miracle, except we treated some first line plus some third line and beyond subjects in MD one zero six. Our first patient who did not receive a bone marrow transplant but did achieve a complete remission finally relapsed after over six hundred days. While we are disappointed for this subject, it must be said that achieving an almost two year complete remission for a 78 year old following 17 cycles of the venetoclax regimen, it's remarkable given the recent literature which documents the dismal median overall survival for venetoclax regimen failures, which have a median overall survival of less than three months regardless of further treatments. Our durability for NB-one hundred six is still developing as the final three subjects are maintaining their complete remission.

Speaker 3

You can see on this chart that receiving a bone marrow transplant definitely correlates with better durability. And if these three keep moving to the right, the median durability for the trial should eventually be even with sub two's durability, that is roughly four hundred days. Now moving on to the MIRACLE trial. We'll only treat initial refractory relapsed AML subjects. That is, this is a second line therapy study where amycine in combination with cytarabine will be delivered on a five plus three days basis compared to just cytarabine plus placebo.

Speaker 3

As Wally mentioned, recruitment and treatment of subjects is already underway in Ukraine, and we expect the initial readout of safety and efficacy data on the first forty five subjects around the end of twenty twenty five. On May 12, we announced that the European Medicine Agency, the EMA, they approved our clinical trial application to conduct our miracle trial in all nine countries we submitted to in the EU. We received final reports of acceptable for Belgium, Tetsnip, France, Germany, Italy, Lithuania, Poland, Romania, and Spain. These approvals are under the condition that we submit results of appropriate nonclinical GLP studies before initiating the phase three portion. That is the part b of the miracle study.

Speaker 3

Combined with individual country committees and ethics approval for these nine countries in the EU allows us to proceed enrolling subjects in these countries. Also, in November 2024, we amended our existing U. S. IND by submitting the miracle trial protocol, which allows for dosing of U. S.

Speaker 3

AML patients above the lifetime maximum allowable dose for currently prescribed anthracyclinus. Since then, we received FDA feedback and guidance on that amendment. This feedback allowed on reduction in the number of subjects to be enrolled

Speaker 3

in Part b of the Phase three pivotal protocol to two hundred and twenty two patients. And obviously, any reduction in recruitment number helps to shorten the time to completion of the trial. FDA made a number of other requests related to our protocol. These requested changes focused mainly on safety and subject monitoring, clinical pharmacology, and inclusion exclusion criteria. None of the requests resulted in significant alterations in the overall trial design or the dosing of anamycin.

Speaker 3

Our last response to FDA was submitted on 04/18/2025, and we have not yet received follow-up communication since that time. We are therefore now proceeding with this amended miracle trial protocol in The US. As is typical with large pivotal Phase III global clinical trials at their onset, there are minor differences between The US and EU protocols due to FDA and EMA requests. However, we do not view these as a barrier to successfully completing the study, and we are now working to harmonize the protocols into a single global version. Regarding our newly initiated Phase III study, it was designed after an end of Phase III meeting with FDA.

Speaker 3

It is to be a randomized study comparing the dosing regimen with which we had great success in our MD one zero six study, that is anamycin plus high dose cytarabine, with a control arm of placebo plus high dose cytarabine. We chose this design because FDA encouraged it and because two recent large randomized clinical trials in refractory and relapsed AML patients, that is the MIRRORs and CLASSIC-one clinical trials, used it and both achieved approximately a seventeen point five percent complete remission rate among patients randomized to receive high dose cytarabine plus placebo. To that end, we can expect we will need for our anamycin plus high dose cytarabine treatment arm to be a seventeen point five percent complete response rate to a statistically significant degree for our drug to be approved by FDA for marketing. But as a reminder, in our MD-one hundred six study, this combination of amamycin plus high dose cytarabine achieved a fifty percent complete remission rate. The primary efficacy endpoint for this study will be the rate of complete remission of the leukemia at approximately day thirty five.

Speaker 3

During Part A of our study, we will have two different antomycin treatment arms, a one hundred and ninety milligram per meter square treatment arm and a two thirty milligram per meter square treatment arm. There will be an unblinding of the data in Part A after the first forty five patients have completed their efficacy analyses, and a second unblinding after between seventy five and ninety patients have completed their efficacy analyses. These interim looks at the data are in part to determine which of the two antiomycin dosing regimens will be taken to completion of the study. In Part B of the study, we will continue enrolling patients, but we will then randomize in a one to one ratio the placebo plus anti plus cytarabine treatment arm against whichever the two dosing regimens of antiomycin was found to be superior plus the cytarabine treatment arm. Finally, as Wally mentioned, we intend to release the final data readout on MD-one hundred seven where we treated advanced soft tissue sarcomas, which had metastasized to the lung, vanamycin as monotherapy.

Speaker 3

Most subjects were treated well above the lifetime maximum anthracycline dose. And yet after reviewing all the cardiac safety data, our expert noted that he saw no signs of study related drug induced cardiotoxicity. We are excited about the results of these trials, obviously. Now I'll turn it over to John Foster, our Executive Vice President and CFO. John?

Speaker 4

Thanks, Paul. We ended the quarter with about $8,000,000 with cash on hand. This should run our operations into the third quarter of this year. To get us well into the first quarter of twenty twenty six, we will need to raise approximately $15,000,000. Now we expect this amount will get us beyond the initial 45 subject data readout, supporting our efficacy rates with additional 30 subjects receiving anamycin or nexorubicin.

Speaker 4

And, also, by then, we should have a total of 75 to 90 subjects recruited, moving us closer to the second data readout in the first half of twenty twenty six. Our market cap is up to over $14,000,000 with 14,100,000.0 shares outstanding. Our trading volume is healthy with a three month trading volume of almost 6,000,000 shares per day. It is spiky. We had a healthy volume of about 2,400,000.0 shares traded this past Monday with the EU news that Polly that Wally and Paul just mentioned.

Speaker 4

Now we've been busy by by looking at this chart. We've delivered on contracting sites, site selections, presenting presentations, medical posters on MD one zero six, and also on our sponsored research at MD Anderson. Most importantly is what we announced Monday, the approval of the EU member countries. Obtaining all of these approvals,

Operator

so just

Speaker 4

17 employees supported by a great team of consultants on the timeline which we expected and we told the public is something which we're very, very proud. This sets the stage for announcing outside of the EU and The and The US additional country regulatory approvals along with first by country hospital site initiation visits, which sets them up to to be open to recruitment. We'll update you on recruitment on our path to get to the initial 45 subjects, 15 of the control arm, and 30 with the two different doses of vanamycin. Now this safety and efficacy readout, in addition to the one MD one zero six data, should provide the market enough data to support a substantial increase in our market cap.

Speaker 2

Wally? Thanks, John. You know, from a big picture perspective, we are all intensely focused on pushing Molekulin's market cap into the range that it truly deserves. And we think the building blocks for that market cap breakout are well placed. Animycin is a truly disruptive technology in a space where exit valuations are often measured in the billions.

Speaker 2

The fact is we are positioned to possibly become the first ever noncardiotoxic anthracycline. And don't forget, anthracyclines are used to treat not just ANL, but nearly half of all cancers and sixty percent of all childhood cancers. And Molekulin doesn't just avoid cross resistance with other anthracycline chemotherapies like venetoclax, it actually outperforms current anthracyclines in most preclinical tumor models. It's

Operator

not

Speaker 2

just that we believe we have a better drug here. It's it's far more clinically advanced than we think the market is giving us credit for. Our phase two efficacy data is better than any drug ever approved for second line AML therapy, and we should have phase three data to share publicly by the second half of this year. All of this is supported by a diverse pipeline of follow on technologies and is managed by a truly veteran drug development team with multiple FDA approvals and big pharma exits to our names. The key milestones are coming quickly this year.

Speaker 2

So stay tuned for a wild ride at Molecular. Operator, we're now ready to open up for q and a.

Operator

Thank you. We'll now be conducting a question and answer session. If you like to ask a question at this time, you may press star one from your telephone keypad and a confirmation tone will indicate your line is in the question queue. You may press star two if you like to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys.

Operator

One moment, please, while we poll for questions. Thank you. Thank you. The first question is from the line of Jonathan Ashoff with Roth Capital. Please proceed with your questions.

Speaker 5

Thanks. Good morning, and congrats on getting Miracle in enrolling. I was curious. The statement about, you know, the results will be submitted as a substantial modification to the EMA. Does that have any negative implications for the timeline of EU approval versus US?

Speaker 2

Yeah. Well, we we don't think so. The issue here is EMA requested some additional GLP preclinical data, that we we know we can produce. It's just a matter of timing and budgeting. So the the issue here will be how quickly we can complete that GLP testing before the EU countries are allowed to move on to part b.

Speaker 2

That said, Jonathan, the the timelines that we've built, we would continue to be recruiting in The US sites and non EU sites even in that interim period, in theory. So the trial really doesn't have to slow down, and it and we will we believe we will get to the requisite number of EU patients to satisfy EU approval requirements. So in the answer is, in theory, it shouldn't change the time line for approval for EMA, But we have to acknowledge that depending on the time it it takes to get those GLP studies done, that it could, but that's not our expectation.

Speaker 5

Okay. You know, how close is Emory you think to getting an optimum formulation, like, you know, in in the bag by the end of this year, or is it something that could drag out a little?

Speaker 2

You know, the thing every time you ask a scientist to to give you a time line for discovering something new, they'll give you a lecture on what it takes to discover something new. Right? We're we think we're beyond the having to discover something new stage and that we where we are now is is actually implementing a strategy for a new formulation that that satisfies the needs for IV delivery. So we we feel like we're now in blocking blocking and tackling and just getting the preclinical work done so that we can move this into clinic. And I I I feel like your your sort of estimate there for by the end of the year is is a is a decent target.

Speaker 2

But I do have to acknowledge things can always you know, you can always get speed bumps when you're developing a new formulation. So we don't wanna overpromise there, but I I think I think you you should expect to hear something from us before the end of the year.

Speaker 5

Okay. That's very fair. One for John, please. Is the, is that 3 and a half million sort of a fair run rate for r and d, for the rest of the year's quarters? Or is that I mean, that should go up, shouldn't

Speaker 4

Yeah. It it'll go up, especially as we head into 2026 when we bring on the GLP and some manufacturing expenses. Right now, we have enough drug for part right now, we have enough drug for part a. We'll have to start manufacturing drug for part b.

Speaker 5

Great. Thank you very much, guys.

Operator

Thank you. The next question is from the line of Jason McCarthy with Maxim Group. Please proceed with your questions.

Speaker 6

Hey, guys. Thank you for taking the questions. Good morning. You had mentioned the primary is the thirty five day CRA, call it one month, just for simplicity. Do you need any durability data for potential approval or is one month enough?

Speaker 6

And what are really the expectations for cytarabine alone? And if CRs are achieved with cytarabine, how long do they typically last? I'm trying to get a sense of, you know, what what the bar is going to be here when you get to that unblinded interim data and say, like, you know, this looks like this should carry through all the

Speaker 2

way to the end for an approvable drug. Well, the I'm gonna I'm gonna ask Paul to to sort of give you a a more thorough answer, Jason. But but the good news just to to to be really clear, the good news is durability is not a primary endpoint for approval here. It's a secondary objective. So our approval doesn't depend on that.

Speaker 2

But it's still an interesting topic, and I think it's important to talk about. So Paul, do you want to maybe give a more thorough response to Jason here?

Speaker 3

That's a good question. As Wally said, FDA said that's their primary endpoint. And these studies I quoted that had the seventeen to eighteen percent CR rate with high dose cytarabine, These were not small studies. These were studies where the control arm of cytarabine plus placebo had hundreds of patients. So we are therefore quite confident that in our trial, the CR rate with cytarabine is gonna be in the teens.

Speaker 3

It will as far as durability, it'll last for a few months, but that's the secondary endpoint. Of course, the ultimate arbitrator is FDA. But at our end of phase one, two meeting, they said that's our endpoint, and they understand that we are not powered to show statistical significance for, we're not reasonably powered to show statistical significance for these other ones. There should be a strong trend. This is because that's what the FDA asked for.

Speaker 3

And when you look at the recent approvals for AML drugs, CRR rate was the primary endpoint. The secondaries were overall survival durability. Those were trends. They never reached statistical significance for these drugs. So we think we're in good shape there.

Speaker 3

And certainly, if we are anywhere near the fifty percent CR rate, we're in great shape.

Speaker 2

There's a nuance here too, Jason, that I think is important to to feed in, and that is the the the, prior studies that Paul mentioned. The the two two specifically, the MIRROR's trial trial and the classic one trial. Both of those studies allowed multiple cycles of cytarabine before measuring for CR. So that's a that's a difference between that their trial designs and ours. In our trial, you only get one cycle.

Speaker 2

You only get that roughly thirty five days, and that's when we measure. So if the patient can't get a CR off of a single cycle of cytarabine plus placebo, then that they're out that that that they're that that that counts as not a CR. So what partly why why Paul said we we expect it to be in the teens, what he didn't say was our our instincts say it's probably gonna be lower than that seventeen and a half percent because those patients were allowed more than one cycle of cytarabine. In ours, they won't get more than one cycle. So logic says that we we should expect that number to be lower.

Speaker 2

Now we're not statistically planning on that, but it's it's what we expect.

Speaker 6

And I'd imagine that some of your results or could they be impacted by underlying factors like age and mutational genomic alterations? Are those things that will be considered when you announce the data?

Speaker 2

Well, for sure, we will, you know, we'll stratify by age and and by genetic mutations. But our primary endpoint isn't dependent upon it. And interestingly, when you look at the Phase II data that we've talked about, that Paul's talked about, we're pretty agnostic to what genetic mutations are and to what prior therapies were. So our view is, you know, we're we're glad for all comers. It's a funny just an anecdotal story.

Speaker 2

When Paul and I presented this protocol to a number of of practitioners, a common theme from the practitioner was, well, we assume you're going to exclude venetoclax failures because they're so difficult to treat. And our answer is no. Absolutely not. Bring them on. We we we are not excluding venetoclax failures.

Operator

In fact,

Speaker 2

we're hoping for them because the the results are so dismal for those patients. And our, you know, our phase two data says we deliver essentially the same CR rate for venetoclax failures as we do for anybody else. So we we're we are not sensitive to those those differentiations in terms of because, you know, the obviously, fitness for intensive chemotherapy is largely determined by age. So there's also the assumption that we are adverse to elderly patients, and that's just not the case. We our median age in the phase two data set was in the sixties.

Speaker 2

And so we're we're happy to have elderly patients, and we're happy to have mutational a abnormalities and and venetoclax failures.

Operator

Thank you, Wally. Thank you. Thank you. This will conclude today's question and answer session and will also conclude today's call. Thank you for your participation.

Operator

You may now disconnect your lines at this time. Have a wonderful

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