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

We are thrilled to kick off the final part 3 of the what this means series with Wally Klemp, CEO of Moleculin Biotech so if you miss part 1 and 2, we encourage you to watch them at your convenience by going to virtualinvestorco.com. So Wally, when we finished Part 2, we left off with an understanding of just how strong management believes annamycin's performance is in its current AML clinical trial, especially relative to the competition. In wrapping up the series, we're hoping to now dig deeper into how you intend to win approval for annamycin and hopefully attract the kinds of partnerships that eventually lead to a liquidity event for Moleculin shareholders. So before we get started, I just want to inform our audience that Moleculin is listed on NASDAQ and trades under the ticker MBRX and during today's discussion, the company will be making forward-looking statements, and actual results could differ materially from these 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 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, and we do encourage you to review these documents carefully. So Wally welcome back. To start with, what is the overall pathway and timeline you envision for annamycin approval in the AML indication.

So Jenene, our intended pathway is designed to track with the multiple approvals we've recently seen for targeted therapies directed toward relapsed and refractory AML patients. And just like annamycin these other drugs showed promising CR data in early-stage trials and then proposed a simple single-arm pivotal trial design with complete response as the primary efficacy end point. Most of these trials were in the range of 140 to 200 patients with protocols that were discussed in advance with the FDA and the EMA. And it gives us what we believe is a solid road map for an accelerated approval pathway for annamycin. With this approach, we believe we can receive approval to begin selling annamycin based on the results of our next pivotal clinical trial. We expect that to be a single-arm open-label trial in the range of 100 to 200 patients. This means a relatively quick approval trial that we think can begin by year-end and complete within 18 months of initiation. And because it's open label, it also means we can report progress as the trial unfolds on a regular basis rather than having to wait for a big reveal 2 years from now. Now the way accelerated approvals typically work in this case is that if annamycin is approved based on the pivotal trial that I just described, we would have to agree to conduct a confirmatory Phase III trial after new drug approval. By that time, annamycin is already generating revenue and may have resulted in the kind of larger pharma partnership that constitutes an effective exit opportunity for Moleculin shareholders.

Wally you sound pretty confident in your belief that annamycin will succeed in winning approval, can you discuss why that is?

When you look at the data we shared in part 2 of this series, and we'll show it here again, you can see that we're already generating a higher CRI level than any of the prior second-line drug approvals. And when you then weight those performance numbers with the percentage of AML population that actually each therapy is designed to address. AnnAraC has the potential to help twice as many patients as all of the targeted therapies combined. But to be frank, we believe we're actually being conservative here. Before this trial even began, we told investors that we expected results in second line or better patients to be stronger than third line and worse. Now that's just common sense since with every passing month, and every additional therapy, AML patients chances for success go down. Well, we're seeing all of this unfold. And once the database review is complete, we believe we'll look at the stratified results for second-line subjects will actually reveal an even stronger performance than we're showing here today. The point is that we believe our numbers in our pivotal trial will likely be better than the all-comers results that we're currently generating, and it's why we're so confident in our belief that anemic will be approved.

So Wally, can you walk us through what you expect to happen and when as this accelerated approval process unfold?

Sure. To begin with, we need to close out the second line patient portion of our current clinical trial. And I'd like to clarify something in that regard. We designed this trial deliberately, so it could be stratified by the number of prior lines of therapy each subject has had. Our target is to enroll a total of 28 patients, although we could choose to close the trial short of that number. But the ideal have approximately 1/3 of the subjects come in as second line. Another 1/3 as third line or greater. And the final 1/3 as first-line patients. But since our intent is to structure our pivotal trial focused just on second-line patients. As soon as we have enough second-line patients, we can go straight to the FDA and the EMA with that data and negotiate our pivotal trial design. In other words, we don't need to wait to fill out the cohorts of first line and third-line patients before starting the pivotal trial process. And as of the end of January, we've now recruited enough second-line patients to meet our goal and by the end of this month, we should have the necessary second-line patient data. So based on this, we've already started the internal process of requesting a meeting with the FDA, and we expect to have the results from that meeting late this summer or early fall. Our goal is to conduct a pivotal trial in both the U.S. and the EU to facilitate approvals in both jurisdictions and also to increase our access to high recruiting sites.

So given this approach, why are you enrolling first-line patients in the current trial?

It's a good question. But remember that the accelerated approval process requires a follow-on confirmatory Phase III trial after your drug is approved. By definition, these Phase III trials really have to be 2-arm trucks. So that's comparing AnnAraC. Again, that's the combination of annamycin and Ara-C to an existing standard of care. But it would be pretty unreal to position against another second-line therapy that is only targeting a specific gene mutation. So a better trial design may be to position against first-line therapy, but we can't be sure about that until we actually generate some performance data in first line patients.

Okay. So given all this, what do you see as communication milestones for investors over the coming months and quarters?

Well, thinking sequentially here, we'd like to host an R&D day with key opinion leaders from around the world to discuss these results and weigh in on their clinical significance. And we're targeting to host that sometime in March or April, depending on scheduling. We expect to be filing our request for an end of Phase II meeting with the FDA about that same time, but keep in mind that there are established time lines for their response and our eventual conclusion of the pivotal trial design process. So that probably translates into our ability to signal FDA feedback, let's say, sometime in Q3. Although we don't think it's likely, if it turns out that we can't reach agreement with the FDA on this pivotal trial design. We always have the option of just continuing our development in the EU. But again, we don't think that, that's likely. If all of this falls into place, we should be starting the pivotal trial before the end of this year or early in Q1 of '25 and as we have in the past, we will periodically communicate progress against this targeted time line to the investing public.

This has been extremely informative, Wally. Thank you for your time on this such an exciting moment in the evolution of Moleculin and biotech. Are there any final thoughts you want to leave with investor?

Well, as I have said repeatedly in recent months, I consider our current share value to be significantly lower than it should be given the significance of the data that we're now coming out with and I think I've demonstrated in this -- what this means serious why I believe that. Remember, the last major advancements in AML resulted in Jazz Pharma paying $1.5 billion for Vyxeos. A drug that marginally increased the CR rate for first-line patients only in AML. And venetoclax that is now generating $2 billion in annual revenue for AbbVie. Now more recently, Servier, a regional pharma company based in France, paid $2 billion for the oncology portfolio of the company that created 2 of the targeted therapies recently approved for second-line AML therapy. Those 2 drugs combined are expected to achieve CRs in a little over 3% of second-line AML patients. Our preliminary data support our belief that annamycin could produce CRs in over 10x as many patients. But honestly, the opportunity is really bigger than that. We haven't focused on it in this series. But annamycin has the potential for use in a much wider range of indications. Our ongoing MB107 clinical trial in soft tissue sarcoma is demonstrating activity in that indication. As well, our preclinical data points to similar opportunities in enough other indications. Frankly, we believe the ultimate opportunity for annamycin is 10x greater than that it is for drugs like Vyxeos. We believe the ultimate value of annamycin will be expressed in billions. And we believe we're now on the verge of demonstrating that to the world.

So Wally, I really appreciate you joining us for the 3-part series, so happy to have you with us, definitely an exciting time for a Moleculin and biotech and a lot for investors to follow. This does conclude Part 3 of our 3-part series. For our viewers, and we appreciate your time and attention. As a reminder, you can access all 3 parts of the 3-part series at virtualinvestorco.com. Wally, thanks again for joining us. And as a reminder, Moleculin biotech trades on Nasdaq under the ticker MBRX. Wally, lots going on this year for you, can't wait to have you back, hopefully, you'll have some more updates for us in the near future.

Thanks so much, Jenene. Can't wait to speak about this again.