Moleculin Biotech, Inc. (MBRX) Earnings Call Transcript & Summary

Hello, and welcome to the Moleculin Biotech Quarterly Update Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Jenene Thomas, Investors Relations. Please go ahead, Jenene.

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 that 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 Moleculin's current expectations, and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. 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 of Moleculin and filed 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, publication, 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 of the date of this presentation, it does not independently verify and makes no representation as to the advocacy, fairness, accuracy or completeness of/or that any independent source of verified any information obtained from third-party source. Any data discussed regarding clinical trials and progress are considered preliminary and subject to change. Joining us on the call today from the Moleculin's management team are Walter Klemp, Chairman and Chief Executive Officer; Dr. Don Paul Waymack, Senior Chief Medical Officer; and Jonathan Foster, Executive Vice President and Chief Financial Officer. I would now like to turn the call over to Mr. Klemp, Chairman and CEO, Wally, please proceed.

Thanks, Jenene, and thanks to everyone on today's call for your interest in Moleculin. We reiterated our commitment on our last 2 quarterly calls that 2023 would be our year of data. And now the data from our priority pipeline programs are coming into view. We've now completed the Phase Ib portion of our MB-106 trial. That's the AML trial in Europe, studying the combination of annamycin with cytarabine or Ara-C. Importantly, that means we've now established our Phase II dose and have commenced Phase II recruitment. In the meantime, the preliminary CR rate or complete response rate for the Phase Ib portion of our AML program, looks to be 33%. And as our senior CMO, Dr. Paul Waymack, will discuss, that's already well above the benchmark used for approval in the class of patients we're targeting. In our other lead indication of soft tissue sarcoma, we're now seeing 73% of subjects exhibiting stable disease after 2 cycles of treatment. Again, this is above expectations at this stage of STS lung metastases and indicative of an encouraging efficacy signal. As always, I should stress that these data are preliminary and subject to change, but so far, we are very encouraged by what we're seeing. So when we look at the milestones we've set out for this year with annamycin, we've already delivered on the first 3, and we have more to come. Specifically, we expect to be announcing Phase II data for AML and more Phase II data for STS, which we intend to do with each quarterly and year-end call. And let's not forget that there's ongoing development work in our other 2 technologies, and that should be generating news flow yet this year. But we know that the main focus for most investors is on annamycin, and here to discuss that in more detail is our Senior Chief Medical Officer, Dr. Paul Waymack. Paul?

Thank you, Wally. I'll get right into it. For our lead compound, L-annamycin, we continue to generate favorable clinical data from our ongoing Phase Ib/II clinical trials of annamycin in patients with soft tissue sarcoma with lung metastases and in patients with acute myelogenous leukemia, that is AML. We believe we are positioned to complete both trials early next year. Our soft tissue sarcoma trial, MB-107, is a combined Phase Ib and Phase II trial for the combined Phase Ib and 2 components. We have enrolled and treated a total of 26 patients with at least 2 cycles of therapy. I should note that completion of 2 cycles occurs every 6 weeks and is immediately followed with a CT scan to assess tumor status. Now among these 26 patients, we have achieved a 73% rate of stable disease. And similar results have been seen in the 15 patients who are being treated in the Phase II component of the study wherein we have a 67% rate of stable disease after the first 2 cycles. And during the remainder of the second half of this year, we anticipate reporting additional interim data, including top line progression-free survival data and overall survival data. In our ongoing Phase Ib/II MB-106 clinical trial, which is in patients with refractory and relapsed AML, we have had 6 patients complete the dose escalation Phase Ib portion of the study. This 1B portion of the study has identified 230 milligrams per meter square as the dose to be used in the Phase II portion of the study, and we are now enrolling patients in the Phase II portion of the study. We should note that the Phase II portion of the study is enrolling not only patients with refractory and relapsed leukemia but also patients for whom annamycin will be the first-line therapy. We were not only pleased that the Phase Ib portion of the study identified the dose of annamycin to be used in the Phase II part of the study but that it also resulted in 2 of the 6 patients achieving a CR or a CRi. That is a 33% CR plus CRi success rate. Again, we want to stress that these data are preliminary and subject to change, but I would also add for perspective that we have seen recent new drug approvals in AML and based on lower levels of complete response. So we are very encouraged by the data so far. Finally, let me note that we continue to monitor closely for evidence of any cardiac toxicity in all patients treated with annamycin. And yet, we have still not had a single patient in any of our trials exhibit any signs, symptoms, lab results, EKG results or imaging results that have shown evidence of heart damage. During the second half of this year, we anticipate presenting the study report from our prior successful MB-105 monotherapy with annamycin in patients with AML study. We also anticipate presenting updates on our ongoing 106 study. I am very encouraged by what we are seeing and for the potential annamycin for both of our lead indications. Moving on to our immune transcription modulator, we continue to make progress in creating an intravenous formulation of our 1066 drug. Simultaneously, we are having discussions with multiple academic institutions to initiate investigator-sponsored clinical trials or programs for the treatment of adult and pediatric tumors of the brain. During the second half of this year, we hope to report top line results from an investigator-initiated Phase I study in pediatric brain tumors. We will also continue to seek external funding opportunities for investigator-initiated clinical trials and we'll provide updates on our IV formulation development. So regarding our 1122 glycosylation inhibitor, we have opened an IND to initiate a Phase I study for the treatment of glioblastomas, that is brain tumors, brain cancers. We have also been granted orphan drug designation from FDA for the treatment of glioblastoma type brain tumors. During the second half of this year, we hope to report preliminary findings of the National Institute of Health under the NIH funded animal testing in studies with the Tacaribe arenavirus, and we will continue to seek external funding opportunities for an investigator-initiated clinical trial. Jon, on to you.

Thanks, Paul. Based on our current Phase Ib/II activities and ramping up for future programs are $32 million of cash on hand at the end of Q2 should take us into the third quarter of 2024. The planned funded activities include our current trials and also beginning Phase III tox studies and other preparations for future possible AML and STS trials with annamycin. We continue with our financial focus on advancing annamycin in clinical studies in finding an IV formulation for WP1066. R&D expense declined slightly in the second quarter versus the prior year quarter as we were running 3 clinical trials, MB-106, 107 and 301 last year. Now we are focused on MB-106 and 107 and moving annamycin forward in future clinical studies. G&A expense decreased as a result of reduced legal expenses. In our last shareholder meeting process, we spoke with numerous shareholders and they voiced their concern over potential naked short selling and stock price manipulation. We heard you, we are aligned and we agree that we should do everything possible to guard against this. Recently, we engaged share intelligence services to monitor trading activity in our stock, stock ownership and significant movement of ownership to provide us with more knowledge on our trading activity. Wally?

Thanks, John. Well, I'm sure from our discussion today, it's clear that we are laser focused on clinical execution right now. And the payoff should be in important data readouts over the coming quarters. These data will play 2 critical roles: Continuing to communicate efficacy in both STS and AML as well as informing the pivotal clinical trial designs that we will begin negotiating with regulatory authorities. And as Jon mentioned, we are in a solid position of having sufficient capital to reach what we believe are key data and regulatory milestones along the way. But perhaps most importantly for shareholders, we believe the data rolling in over the balance of the year will begin to address the disconnect we see between our current share price and what we believe is the real potential value of Moleculin. Well, Jenene, that covers our prepared slides for today's call, but we'd be happy to answer any questions that people may have.

Thank you, Wally. Kevin, please proceed.

[Operator Instructions] Our first question today is coming from Jonathan Aschoff from ROTH MKM.

Jon, just a fast one for you first. Is this R&D run rate real? Or is this kind of temporarily low like last year?

It should be low this quarter and gradually increasing as we move into the fourth quarter and the first quarter of next year as we prepare for future clinical trails, as I've discussed, we'll have another batch of annamycin being produced. So that's where we get to the $32 million taking us into the third quarter of next year.

Okay. And I had some more defined timing for upcoming catalysts in my last quarterly note that I see now. And I was just wondering if you could shine a little light on that? Like are you slowing down to save some money? Or what's -- what might account for that?

So -- Jon, let me sort of hope to take the front end of that, but you might want to comment on our specific choice of disclosures. We don't necessarily see anything slowing down. I do feel like some of the progress that we want to make over the balance of the year, involves outreach to FDA. And as you know, Jonathan, that timing with regulatory authorities is really a guessing game. And so we want to be -- we want to make sure everybody understands that we're going to start the negotiating process with regulatory authorities, but we don't want to be too specific about the timing of when we're going to have that feedback because sure enough, if we put a stake in the ground, it will be wrong. So we're not -- we're seeing good recruitment in both trials. So we're not backing off the timing there, but we do want to try to be respectful of the fact that we can't dial in regulatory dialogues with any precision.

That's fair. And lastly, why do you think the SD rate was higher when you included the 31 evaluable patients at different doses? This is STS-LM than with just the 15 evaluable patients at the recommended Phase II dose. I was just curious why that SD rate was kind of flipped versus what I'd expect?

So Jon, you've been closest to crunching all those numbers on a regular basis, you want to tackle that one?

Yes. And I think Paul can add in here as well. When you look at the time from initial diagnosis of lung metastasis, we're getting very tired patients. And so you're seeing a little difference from the standpoint of the time from initial diagnosis to the time when they enter in our trial. The last time I looked at it, the median time from initial diagnosis of lung metastasis appeared to be around 20 months. So that's very tired patients from a lung metastasis standpoint. Paul, do you want to add some color?

I'll just add [ lack of ] color [indiscernible] statistician and say that when the numbers are 67% and 73%, unless you got a 10,000 patient study, those numbers statistically are just about the same. So I would not put any great emphasis on 67% versus 73%, except those are both, in our opinion, really good numbers to have when you look at the literature.

Your next question is coming from Jeff Jones from Oppenheimer.

Congratulations on the quarter. I guess you had mentioned updating on data and presenting data. Is there a plan to present at a conference? Or is this just going to be at the -- your typical quarterly updates?

So our reference here was really focused on the quarterly updates. Having said that, we're definitely expecting to have presentations at the upcoming ASH and other CTOS and other critical meetings. Certainly, the data will be interesting for those conferences, and we've got folks that we'll be presenting, but our reference in this call is really to make sure that people understand it, you can count on the fact that when we do our quarterly calls, we are going to provide a very thorough clinical update.

Great. Appreciate that, Wally. And in terms of the MB-107 STS lung met study, the -- in the patients being dosed at the RP2D, I believe you have 15 patients evaluable. Were there any PRs or CRs? Or do you anticipate sharing waterfall or swimmer plots, so we can get some more visibility to what's going on with individual patients?

So Paul, do you want to address this question?

Yes. Thank you. First, when we say the data are preliminary, that's definitely the case because at the -- the recommended Phase II dose, we still have a lot of patients who are ongoing who have not yet had progressive disease. So we have patients who haven't even had their 6 week -- initial 6-week follow-up scans yet. So these are very preliminary. We have not yet seen a patient with anything better than stable disease, but considering these are averaging about fourth-line therapy, we are not surprised and we are very pleased just with such late-stage patients to be able to get 67% to 73% of them who have stable disease at the time of the initial evaluation, especially in light of what the literature shows would be expected from this patient population.

Thank you. We've reached the end of our question-and-answer session. I'd like to turn the floor back over for any further closing comments.

Thank you. Again, thanks, everybody. Obviously, as we've said in multiple conference calls before this, the data is coming in, and so it's actually a pretty exciting time for us, and we're really looking forward to these -- especially these next 2 quarters just because of the timing of the additional data that's going to be coming in. So please stay tuned. We can't wait to report more data. Have a great day.

Thank you. That does conclude today's teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.