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

Okay. We are ready to get started. Welcome, everyone, to Moleculin Biotech's AML Clinical Day. My name is Jenene Thomas. I will be the moderator for today's event. At this time, I would like to remind our audience that remarks made during this webcast may state management's intentions, beliefs, expectations or future projections. These are forward-looking statements and involve risks uncertainties. Forward-looking statements on this event are made pursuant to the safe harbor provisions for the federal securities laws and 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 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 leaves these third-party resources to be reliable. As of the date of this presentation, it does not independently verify and makes no representation as to the adequacy 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. So with that, we are going to talk about on today's agenda. So we are going to start with opening and introductions. And then Mr. Klemp will introduce Annamycin. Then we'll go into the AML, the unmet need. Annamycin for the treatment of AML, a data review. Then we'll go to the Annamycin opportunity in AML and then driving towards the pivotal study for the company, and we will end with a Q&A session. Okay. So joining us from the Moleculin management team, we have Walter Klemp, the Chairman and CEO. We have Dr. John Paul Waymack, who's Senior Chief Medical Officer; and we have Jonathan Foster, Chief Financial Officer. Okay. And we are pleased to have with us a key opinion leader, Dr. Martin Tallman, who will be joining us. Could we start with an introduction with you, Dr. Tallman?

Yes. Thank you. Most recently, I've served on the -- as a member of the Robert H. Lurie Comprehensive Cancer Center of Northwest University. I have also recently served as Chief of the Leukemia Service at Memorial Sloane Kettering Cancer Center and Professor of Medicine at Weill Cornell Medical College. I was a Professor of Medicine at Northwestern. I had a privilege in 2001 of serving as the President of the American Society of Hematology. And I have served as the Chair of the Leukemia Committee of the Eastern Cooperative Oncology Group. I was meeting a past Chair of the National Comprehensive Cancer Network AML panel. And I'm very pleased to be a member of the Moleculin Scientific Advisory Board.

Well, certainly, it is a privilege to have you join us today. Okay? So we also have Dr. Michael Andreeff. He will -- likely will be joining us. He is attending to some patient needs at the moment. So we're hoping that he will be able to join us throughout today's discussion. And at that time, we'll have him provide his background as well. Okay? Okay. So I will now turn it over to Mr. Klemp to provide the corporate overview. Wally?

Thanks, Jenene. One of our core beliefs is that anthracyclines continue to be among the most important treatments for AML patients, not to mention numerous other indications. The fact is that despite all the advances in targeted and immunology-based therapies, the majority of successful cancer treatments still rely on chemotherapy. And Annamycin, we believe is, for the first time, going to make critical anthracycline therapy safer and more accessible to a majority of patients. And many more lives will be saved because of it. Now this is perhaps one of the most important opportunities in the history of Moleculin. The data we will discuss today are significant. And I would argue vastly more significant than the investing public understands. And that's why we have invited the world's foremost experts on AML on the call with us, so that our listeners can finally begin to grasp just how significant this is. Annamycin is now Phase III-ready. The data we are discussing to date are stronger than any asset ever approved for use in AML. And this is a space where we believe lesser assets have delivered billions in value to shareholders. Now the press release we just put out this morning added 2 more patients to our results, increasing the overall N in this study to 20 and improving an already fantastic performance from Annamycin. Now we'll hear more about these data from Dr. Paul Waymack, our Senior Chief Medical Officer in a bit. But the bottom line here is that Annamycin's performance to date is truly remarkable, and it's beginning to turn heads in the AML community. For those of you who are new to the Moleculin story, it's important to understand that we aren't just pushing some incremental tweak in a me-too effort for a highly specific niche. Annamycin is about shifting the entire paradigm for how anthracyclines are used. And as one of the first indications of that shift, we believe we're on the verge of creating a new standard of care in second-line AML. This has been a long, hard struggle. Since we licensed this discovery in 2016, we've invested close to $150 million improving to people that what was believed to be impossible is now happening. Four clinical trials and more than 80 patients later, we're only weeks away from presenting history-making data to the FDA in order to finally launch a pivotal approval clinical trial by the end of this year. Now Annamycin is truly a next-generation drug. It features major structural changes from existing anthracyclines and then enables radically improved uptake with a patented lipid-based delivery system. That results in something that no one thought possible, and that is a truly non-cardiotoxic anthracycline. And it turns out that it's not just non-cardiotoxic. It is generally less toxic than currently prescribed anthracyclines, while it avoids cross-resistance with other anthracyclines and it's more potent than doxorubicin in most tumor models. But the absence of cardiotoxicity, we believe will be a true game changer that currently used anthracyclines are so cardiotoxic that the FDA stipulates lifetime maximum exposure levels. In fact, if a patient is dosed beyond the 550-milligram per square meter limit, there's a 65% chance of a cardiac event. And if that patient goes beyond 850 milligrams, this risk is 100%, and there's an 8% chance of outright heart failure. We believe those risks can now be eliminated with the use of Annamycin. In fact, in the gold standard animal test for chemotherapy cardiotoxicity where doxorubicin has shown 100% cardiotoxicity. Annamycin is 0% cardiotoxic. But Annamycin gives up nothing in terms of efficacy compared with the most-commonly used anthracycline doxorubicin. Annamycin outperforms tox head-to-head in a highly aggressive AML at mouse model. And when you combine with cytarabine in the same model, we see significant synergies with the combination outperforming in cytarabine alone by over 240%. It's this combination and we call this AnnAraC that has been the focus of our latest AML clinical trial, MB106. And as we are discussing today, that trial has produced some impressive results, especially in second-line patients. Now we think this is particularly important given the magnitude of the unmet need for second-line therapies in AML. And here to talk a bit more about that unmet need and the opportunity in AML is Professor Martin Tallman, Dr. Tallman, would you mind kicking things off with a brief overview of AML and the significant unmet need?

Yes. Thank you, Wally. For those of you that aren't familiar with the disease, AML is a type of cancer, specifically a hematologic malignancy that starts in the blood-forming cells in the bone marrow leading to the rapid growth of abnormal, generally immature white blood cells. And this occurs to the detriment of normal blood formation. And you can't form normal red blood cells, white blood cells and platelets, it is manifest as symptoms, including profound fatigue, frequent infections and easy bruising and bleeding. There are about 160,000 cases worldwide and about 20,000 newly diagnosed patients each year in the United States. And unfortunately, the 5-year survival overall remains at less than 30%. So AML represents a significant unmet need for more effective and tolerable therapies particularly in older adults and also in the relapsed and refractory setting. Next slide. This is a slide where we -- which we call the AML patient journey. It's a very, very simplified slide. And we start with patients newly diagnosed patients. And for many years, for about 40 years, from 1973 when 7 and 3 or conventional induction chemotherapy was described until 2017, when the first targeted therapy [ medostorim ] was approved by the FDA. At 44-year period, we had no new drugs approved in AML. And our major decision was is the patient fit or not. If they were fit for intensive chemotherapy, they got 7 and 3, 7 days of cytarabine and 3 days of an anthracycline. We tend to use doxorubicin. And if they were not fit, we really didn't have anything to offer them. Now today, we still ask as an early question, is the patient fit for intensive chemotherapy? But now we can say they are fit for intensive chemotherapy or lower-intensity therapy with either a targeted agent or azacitidine venetoclax? And we ask a second question, which is important to that is do they have a molecular target for which we have a drug that will be effective? Patients who achieved remission, many of whom undergo bone marrow transplant and those who don't, undergo consolidation chemotherapy. But despite this progress, a favorable outcome as an above 40% or less of patients. So that leaves about 60% of patients who still succumb to this disease and that indicates that it remains a significant unmet need. Next slide, please. Now the unmet need in AML is manifested in several ways. First of all, second-line patients that don't respond to first-line therapies represent a significant proportion of patients, and side effects limit the ability to use intensive treatments in older patients or those with other health issues, comorbidities. And many patients don't have the genetics for targeted therapy, and some don't respond even if they do have the target. Next slide. So on this slide, we show you the targeted therapies that have had limited benefit. They hold a great promise, and there's been a lot of excitement about them. And when you really look at the data, they have limited benefit to date. This shows you that the bar for approval for 5 of the recent approved targeted agents has been relatively low at about 20%. On the right-hand side of the slide, you can see that in the pie graph that if you exclude patients who have the targets of IDH1 or 2 or 3 mutation, that leaves about 53% of patients who are ineligible for targeted therapy -- for approved targeted therapy. Next slide. And I think I'll turn it over to, Wally.

So if you don't mind, before we get into Dr. Waymack's portion, we are very pleased to see that Dr. Andreeff has joined us. So welcome, Dr. Andreeff.

Okay. So I'm very happy to help. And I think you heard a fantastic introduction on where we are with leukemia therapy. My own involvement with the drug goes back over 20 years. And if we can talk about it later, I guess, but it's a very exciting compound. There is no competition and no equal to it. So yes. So introduce myself. I'm a physician at MD Anderson Cancer Center, I run a large research group. And we have developed a number of new treatments for AML, in particular, including venetoclax and FLT3 inhibitors. So Dr. Tallman gave you a very nice introduction and background where we are today. The so-called targeted therapies are, in a way, too targeted because we are sometimes eliminating 1 single clone of leukemic cells, but other clones grow out. So I'm in favor of more generic approaches. For instance, the BCL2 inhibitors, venetoclax are active in many leukemias to a degree, and we know the limitations by now. But they are not super selective like the IDH inhibitors that you just heard about. Okay. With that background, I'm very happy to be part of this discussion.

Well, we certainly appreciate it, and we know that you have a hectic schedule. So we're going to keep things moving right on. Now we're going to turn it to Dr. Waymack. Thank you.

Thank you, Martin. And I would like to say that I am very pleased to be able to present our latest data to you. These data will show efficacy for Annamycin when used in second-line therapy in AML patients that greatly exceeds that time with all FDA-approved medications. As can be seen in this slide, when used in combination with cytarabine, Annamycin achieved a 50% CR rate, a 60% CRc rate. And as Wally and Martin previously showed, these rates are double that seen with all the currently approved drugs. And this was accomplished without a single patient in a single clinical trial showing any evidence of cardiotoxicity. It is also important to note that unlike the clinical trials that got the 5 currently approved drugs on the market for refractory and relapsed AML, trials in which enrollment was only in patients with certain genetic mutations, our study nonselectively enrolled all patients with refractory and relapsed AML. Thus, our data indicates that 60% of the entire refractory and relapsed AML population could benefit from Annamycin. On the next slide, I would like to review the chronology of our clinical trials. Our first clinical trial, MB104 was a study conducted in the U.S. in patients with refractory and relapsed AML. The patients in this study received either 100 or 120 milligrams per meter square of Annamycin as monotherapy. This limitation in dosing was due to FDA concerns about potential cardiotoxicity. Our second clinical trial was conducted in Europe in patients with refractory and relapsed AML using a dose escalation design. And this study, the dosing cohorts reached 240 milligrams per meter square of Annamycin. Our third and ongoing clinical study, MB106, treats patients with AML with a combination of Annamycin plus cytarabine. We anticipate our fourth and pivotal Phase III clinical trial will commence sometime early this coming year. The next slide, please. In MB104, 7 patients were treated with either 100 milligrams or 120 milligrams per meter square of Annamycin as monotherapy. The Annamycin was found to be very well tolerated and to exhibit no evidence of cardiotoxicity. One patient in the 120-milligram per meter squared dosing cohort achieved a morphologic leukemic-free state despite the extremely low dose of Annamycin. The next slide, we'll review our MB105 study, which was conducted in Europe since they did not share FDA's cardiotoxicity concerns. This trial also tested Annamycin in refractory and relapsed AML patients as monotherapy and doses ranging from 120 to 240 milligrams per meter square. Once more, this study found no evidence of cardiotoxicity. Regarding efficacy, the highest dosing cohort, that is the 240-milligram per meter square cohort demonstrated an 80% overall response rate. In light of the efficacy seen in this study -- moving on to the next trial as well as the preclinical data Wally previously showed, we moved on to our third clinical trial in AML patients, MB106. In this study in an attempt to improve durability of responses, Annamycin was combined with 2 grams of cytarabine and patients were allowed up to 3 cycles of this combination. This slide shows the top line efficacy data. The second column from the left shows all patients enrolled in the study. That is 20 patients. And you will see that we have a 40% CR rate, a 45% CRc rate, and when you add in the [ PR ] patients, a 55% overall survival rate. The column that is second from the right is probably the most important of the columns. This is in second-line therapy patients. And as you can see, there are 10 patients who received Annamycin as second-line therapy. These patients achieved a 50% CR rate, a 60% CRc rate and a 70% overall response rate. You will notice that there are 2 other columns, the per protocol columns. We'd exclude 2 patients who dropped out because they did not even complete their first dose of study drugs. One was due to an allergic reaction to Annamycin and one due to an allergic reaction to the cytarabine. I would again like to point out that these efficacy data document response rates that are more than twice those reported for the other drugs approved for treating refractory and relapsed AML. If we can move on to the next slide. This slide details the 9 patients who achieved a CR or a CRi in MB106. To the far right, you will see that among the 7 patients who were treated as third line and beyond. We had a single patient who developed a CR. That patient has now undergone a bone marrow transplant, is alive and is doing well. The next 2 columns to the left are in our first-line therapy patients who received -- who achieved a CR, 2 of the 3 patients achieved the CR, which is, of course, a 67% CR rate. But admittedly, currently, the number of patients is limited, However, we continue to recruit patients, and these 2 CRs are alive and doing well. The final 6 columns to the left are the second-line therapy patients who achieved a CR or a CRi. You will note that 4 of the 6 are alive and doing well. And in fact, the one to the far left, that 78-year-old patient who is rapidly approaching 80, not only alive and doing well. He lives in Italy. And 2 weeks ago, he went on vacation outside of Italy because he was doing so well. You will also notice that we have a couple of patients who did not do as well, one developed pneumonia and died and one relapsed because they were unable to continue receiving therapy because of an ongoing infection. We noted that both of these patients were treated at the same study site, and after investigating, we found that this site was not following generally accepted antimicrobial prophylaxis and treatment guidelines. This situation has now been corrected through counseling. My final slide plots out the durability of responses in the 9 patients who achieved a CR. You will note that the current median duration of response is 4.9 months. However, since 7 of the 9 patients are alive and doing well, this number will continue to grow over time. To summarize these data, in patients with relapsed and refractory AML who require a second-line therapy, we are achieving a 60% CRc rate. This is double the efficacy rate with drugs currently approved for treating refractory relapsed AML. We have achieved these results while failing to identify any cardiotoxicity in any patient in any clinical trial. In light of these facts, we intend to proceed to the initiation of a pivotal Phase III study by early next year, with the goal of generating clinical data that will support the submission of an NDA for the initial indication of treating second-line AML patients. Thank you, and I will return the microphone back to Martin.

Thanks. Dr. Waymack. I want to talk a little bit about the opportunity that we see for Annamycin. Next slide. Dr. Waymack went over some of these data, but I'd like to emphasize to make a few points. In the 104 trial, the monotherapy trial and the lower dose is still with a 17% CRi weight and the drug was well tolerated. In the 105 trial, the second monotherapy study at the higher doses that was an 80% overall response rate, the 240-milligram per meter squared cohort and there was apparently a positive correlation between response rate and dose, and the drug was, again, as you heard, safe. Finally, in the 106 combination study of Annamycin and cytarabine, when one looks at all patients, 45% CR -- composite CR rate. And then second line, 60% composite CR rate with the durability up to 12 months and that should only increase. So the addition of cytarabine in this study, we think supported -- is supported by compelling preclinical data showing improvement over monotherapy, Annamycin monotherapy. Next slide. Now this shows you the results of Annamycin versus current therapies and there are 5 of the targeted therapies listed here, but the black bar is showing complete remission rate and the purple bar is showing the prevalence weighted benefit, that is the CR rate times the eligibility. And despite the excitement and promise of these targeted agents, you can see that the remission rates are still reasonably low, and the impact is also quite low. 5.8% benefit overall in the [ gilteritinib-treated ] patients, 2.3% in the [ itacitinib-treated ] patients, abrocitonib patients, 1.7%, [ lutacedenab ], the other IDH1 inhibitor, 2.4%, and gemtuzumab ozogamicin or MYLOTARG, only 1.3%. And that compares to 50% CR rate and the prevalence-weighted benefit of 50% for the combination of Annamycin and Ara-C. Next slide. And this shows you Annamycin versus current and upcoming therapies. And you can see in first line for Vyxeos or CPX-351 or Ven-Aza, CR rates are, in first line, this is 38% for Vyxeos and 37% for venetoclax-azacitidine. And in the blue, you see second-line therapies. You can see -- the second line, you can see the CR rates vary, where IDHIFA and [ difsovo ], 19% and 25%, respectively. For the 3 menin inhibitors, respectively, 35%, 18% and 24%, and that's compared to 50% in second line complete remission rate for Annamycin. Next slide, please. And we discussed this slide before, shows you the current AML treatment paradigm. And again, you want to make that despite the development of venetoclax-azacitidine and targeted therapy, there's still a large potential candidate population of about 60% that we think may benefit greatly from Annamycin. Next slide.

So that's -- Marty, thank you so much for that overview. Because Michael had to join us late here, I just wanted to offer, Michael, is there anything about the results that Paul discussed or the overview that Marty gave that you'd like to add to?

Yes. So this is very striking data. And what's interesting is it holds up for patients who had venetoclax-based treatments, but also patients with chemotherapy, I guess. So there is nothing -- now we are involved in a large number of new agents. And the data has shown here is always inferior to these really incredibly high response rates to Annamycin. I could maybe add some mechanistic thoughts about it. One reason why Annamycin is so effective is that it is independent of e-flux pumps. So sales have pump out Xenobiotics, so drugs. One famous pump is MDR1 P-gp. Another one is MRP. And we have shown in the past, together with other investigators that Annamycin is independent of these pumps. So the drug stays in the cells and does its job killing the cells and is not subject to this e-flux pump. It's just one thought that may, in part, explain why Annamycin is so effective.

Great. Perfect. I'll just sort of kind of wind up the prepared part of this presentation because I know we're probably eager get to answering some questions from the analyst community. The -- all of today's discussion is really a prelude to the eventual approval of Annamycin. And of course, for that to happen, we are driving toward a pivotal clinical trial in second-line AML patients, as Paul mentioned. We also think from an investor perspective, what is about to unfold has potentially massive value inflection potential. And the reason for this is that we believe the next major events, the FDA feedback, the triggers of pivotal clinical trial, the output from the pivotal trial and the potential for an NDA submission, they all represent the opening of an exit window for our shareholders. And since I know it may be of interest to the analysts on the call today, I did want to quickly outline what we are targeting for in the upcoming pivotal trial that Paul mentioned. We're going to be meeting with the FDA soon and we expect that meeting will provide clarity on our pathway for new drug approval. Specifically, we're looking to conduct a pivotal registration trial in second-line AML patients. Our goal is to have this trial structured similarly to the current MB106 trial. The main difference will be to focus only on second line to the exclusion of first line and third line and beyond. And the primary endpoint will be durable composite complete remission. Now ideally, this would be another open-label single-arm trial, and that would allow us to report results on an interim basis. In general, this proposed trial design is consistent with several recent new drug approvals. So we think there's good precedent for the design. So Jenene, back to you and maybe time to open up for some questions.

Absolutely, okay. So we are ready for the Q&A. And we're going to start first with those that have raised their hands. So we have Jonathan Aschoff of ROTH Capital.

Can you hear me?

We can, wonderful. Thank you for joining.

So I'm curious, what do you intend to have to hit with enrolling 100 to 150 regarding CRc durability in that trial? There's no comparator group, so there's no differential. So what is it that you have to hit here?

So Paul, I think you're probably the most qualified given that you designed the protocol with the help of a lot of input. So do you mind taking that question?

Yes. I guess the final answer is we will hit what the FDA demands. We proposed -- what we are proposing to them is, as Wally said, similar to 106 second-line therapy. As Wally and Martin have shown, the drugs that have been approved recently for second-line therapy, the 5 of them have CR rates of between 15% and 30%. So what we would propose to the FDA is that we will show that the lower limit of the 95% confidence interval for our durable CR rates is above 30% or somewhere 25% to 30%, we're above that, not the mean, but the lower limit of the confidence interval, which is readily doable if we are any way close to the 60% we're seeing now. If we're 45%, it is readily doable when you do the statistical calculations. So that would be our initial proposal. As Wally mentioned, the last 5 drugs to be approved, they've all been approved based solely or mostly on single-arm studies. We hope FDA will continue that acceptance rate, but we will learn more when we meet with them.

Okay. That was helpful. You guys have been recently, management, that is, recently strongly emphasizing not yet receiving the valuation you deserve. So maybe to understand that, can you help us out with what are the equity-potent doses of, let's say, Annamycin versus dox? And outside of the -- obviously, absent cardiotox, does that equipotent Annamycin dose give you any higher rate of any other toxicities? Or is it simply that investors want to see more second-line patients treated with AnnAra at the 20 mg per meter square dose?

Well, let me start by responding to some of the questions about the comparative toxicity and relative dosing levels, but then I'm going to invite doctors Tallman and Andreeff to weigh in with their thoughts on this, too. It's an important question Jonathan. As it relates to equipotent comparisons, typically speaking, if you look back in history, the conclusion was it takes about 1.7x Annamycin in most models to be the equipotent equivalent, if you will. But once you extend that to hard-to-treat tumor models, like the one that we showed the preclinical data for the -- I mean, Dr. Andreeff may want to comment on that model because he knows it well. But that's one of the most difficult-to-treat animal models for AML there is. And Annamycin substantially outperforms doxorubicin. And we see that in model after model. There are a few solid tumor models where doxorubicin appears to be superior, but it's the exception, not the rule. But what I will say is, in every instance, even at massive dosing of Annamycin, we don't see the toxicity in animal models that is seen from doxorubicin, not just cardiotoxicity, but other toxicities as well. There doesn't seem to be any offsetting or overweighted toxicity related to Annamycin. We haven't seen that in humans. What we have seen in our clinical trials is not only the absence of cardiotoxicity, when we would expect to see it, especially, we've taken some patients up to 3,000 milligrams per square meter of cumulative dosing without any instance of cardiotox. But also it's -- it doesn't have [ vasoreactivity ] like doxorubicin does. Interestingly, we see a dramatic reduction in alopecia in patients. Just across the board, Annamycin seems to be better tolerated by patients. Now let's be clear, we haven't done a head-to-head comparison in humans between doxorubicin and Annamycin. So this is all anecdotal comparison not a rigorous scientific comparison in a head-to-head trial. But I think that the data are somewhat overwhelming here. But doctors Andreeff and Tallman, what are your thoughts relative to Jonathan's question?

So if I may respond. When you look at the side effects in the table, the clinical trial, patients have neutropenia and fever and other cytopenias. That is all expected in a trial with acute leukemias. So I did not see any toxicity, let's say, in neurotoxicity and of course, not cardiotoxicity or anything else that would raise a flag. So I think the toxicities are mostly related to the disease and not to the drug treatment. Maybe Dr. Tallman has some thoughts about it?

I agree with you, Michael.

So I was just curious, on Slide 33, when you showed 5 other drugs and response rates around 15%, 20%, 30% or so, what are the ends, the average sort of end or the range of patients treated that contribute to that data to compare your MB106 data to?

So Paul, I know you've perused all of these trials in detail. Do you mind filling in on Jonathan's question there?

The numbers for the pivotal trials that got those drugs approved range from about 75 to a couple hundred who got the drug. It -- so when we are proposing to go in and say 100 to 150, we're in the ballpark. And again, we are not going in and saying mean, median, we're saying the lower limb of the 95% confidence that enroll, which sort of if you went there, the numbers don't matter, that's been factored into the confidence intervals.

Okay. My next question is, it seems like you have enough data to end Phase II, especially with your time line in the press release stating it's a 1H 2024 end of Phase II meeting. So are you done enrolling? It sounds like you are.

Paul, do you want to talk about the enrollment strategy here because I know it's somewhat confusing. We're going through a meeting with the FDA, and yet this trial is continuing. So can you mind explaining that for folks?

If you go and see the approvals for these drugs that were approved based on a single-arm study, they had generally in some way, shape or form, a confirmatory, randomized trial. We are, therefore, expecting that if they grant approval of the design of a single-arm study, will be accelerated approval with the randomized trial being required to follow. We don't want to do that in second-line therapy, we want to get something out of it. So we would therefore propose to FDA that the confirmatory trial be randomized first-line therapy. And now in order to design such a trial, we're going to need to be able to do power factor calculations. As I mentioned, we've enrolled 3 patients, 2 of them were CRs, which is 67%, but if you do the confidence intervals, they're above 100%, literally. It's -- the numbers are kind of weird. So we're going to have to get more patients in first-line therapy. So we intend to continue enrolling first-line therapy patients because even if the FDA were to say you don't need to do a confirmatory trial, we still want to do first-line therapy. That's the ultimate market. We think we work there. We have so far, so we're going to need adequate numbers to define power factor calculations for a subsequent pivotal first-line therapy study. So we will continue to enroll patients in first -- who are first-line therapy until we have adequate data from 106 to design such a study. In contrast, for second-line therapy, the 10 patients we have, that gives us more than enough power to design our pivotal second-line therapy study. And so we have ceased enrollment in second-line therapy, we don't need any more, and we're telling the sites to enroll first-line therapy patients, which we will continue to do until we have sufficient numbers to power a first-line therapy study.

Okay. And lastly, may we assume that the new CRs that we've seen since the first -- the 4Q '23 conference call, they're all from the newly evaluable patients rather than improvements in patients previously evaluable?

Paul, I think that's correct.

That is correct.

I will note that your question is important or it's meaningful, I think, to the audience for them to understand because John has pointed this out in previous conference calls that we've had some patients along the line that started out as CRis. So they had below 5% bone marrow blast but an incomplete recovery of blood counts. But then they turned into CRs with a subsequent -- it was just either with a passage of time or a subsequent dose of Annamycin and Ara-C. So we do have a history of CRis improving to CRs. But in this case, the data you saw from the previous announcement, everything that's been changed is just the addition of new patients.

So now we have Vernon Bernardino from H.C. Wainright.

Great. Most of my questions were asked. But one question I had is regarding the pivotal study. Given the activity of this drug and the results that could be really, really promising, would a pivotal study need to have, let's say, an early stopping point? And how many patients would you really need to see that the results are really promising so that you could start that? And what do you think that the point of view regarding an early stop end point would be considering, obviously, if you let some patients continue on therapy without stopping, it could be I guess, unethical because others could benefit if the drug could get approved sooner rather than later.

Understood. Understood. Paul, that's definitely your wheelhouse. Do you want to take that?

Yes. And the answer is it depends. If we are allowed to do a single-arm study, then it is very risky scientifically to stop it early. There have been instances in the past in other diseases where it was a single-arm study. They stopped early, and -- or they recommended, but when they refused and went on to the end, the difference disappeared. So it's -- when you know the results because everybody is getting the drug, it might be a temporary blip and you say stop it now. However, if we're allowed to do a single-arm study, again, based on the results from 106 and power factor calculations, 100 patients is more than enough to have the lower limit of the confidence interval way above what we're setting. So I don't think that would be too onerous. If we're doing a randomized trial, then obviously, we'll be having an independent committee look at unblinded data from time to time and make recommendations about whether or not it is ethical to continue the study, not only because of failure reasons, which we don't think there's futility with this drug from what we're seeing. But also because the results are so good, it would be unethical to continue denying the therapy to the control arm. But this will all be discussed at the meeting with FDA

And I've got to commit it to memory. When do you anticipate having end of Phase II meeting?

So we signaled to the market that we intend to have feedback from the FDA in the first half of this year. So the first half of this year is rapidly approaching. So you can even interpret from that confidence in that guidance that proper communications and the sequencing of notice periods is taking place. So John, is it -- do you want to embellish...

No. I would just say that we're sticking to the end of the year. And for that to happen, you know, as Wally stated, the communications and the letters all have been all have been going back and forth if we're going to stay on that time line, and we're very, very confident in that time line.

Yes. When you say the end of the year, we're sticking to the end of the year as a starting point for the pivotal trial.

I meant end of the first half for the FDA meeting. Thank you for that.

We do have another analyst, Kemp Dolliver from Brookline Capital Markets.

So a couple of questions. First, with regard to FDA guidance, your guidance -- and the endpoint. And this may be just a matter of semantics, but I want to be sure that the data look apples-to-apples with the way FDA looks at it. And there's the new term they're using of CRh, which relates to amount of [ ontological ] recovery or remission. So how should we think about the data you've generated so far relative to that measurement, assuming they're going to slice the data that way?

Paul, I think you're best qualified to comment on the definitions in the clinical trial design.

Well, let me say first that CRh is sort of equivalent to CRi. There's been a change in the nomenclature, but it's where cancer has gone from the marrow, but the blood is not returned to what it should be, but it's heading that way. FDA's position has been that CR is better than CRi or CRh. And that's established in the literature. You CRi or CRh, whichever you want to call it, is better than a nonresponse. It's not as good as a pure CR. So FDA generally puts more value in a CR, which is fine with us because if you go back and look at the data, we are 50% CR, 60% CRi. The other drugs, they're more split half and half for CR, CRh. So if the FDA wants to say, just do CR, I'm fine, we can live with that. If we have to do a randomized trial, we would especially like to do that because we are even more ahead of the crowd with that than the combined CR/CRi.

Great. And how might the inclusion/exclusion criteria in the Phase III differ from the Phase II?

Again, back to you, Paul.

As I said, in our study, we're taking everybody. We're taking -- whatever your mutation, we'll take you. Whatever your age, we took them all. In fact, as I mentioned, I think the our patient who -- our first person in the 106 trial, about to turn 80, doing great. We've had them down in their early 20s. We don't discriminate. The other 5 drugs approved, they are very selective in whom they take, now with good reason. Their drugs are defined to hit one particular mutation. We take them all, and we're doing better with them all. So we don't plan to exclude patients. We will be monitoring all of these mutations so that if we find a particular group that does really well or badly, that can go into labeling for our drug, but we don't plan to select out any particular group. Anybody with second line -- meaning second-line therapy, we propose to enroll them. Now within a few reasons. There's this exclusion, you can't be pregnant and a few other things, which is true of all studies. But the selectivity used by the companies getting their selective drugs approved will not apply to us. We will take everybody

Great. And the last question relates to sites because you referenced a pretty important problem at one site. And you will be running in trial sites in the U.S. in the Phase III. So when you think of Europe, how will that, I guess, complexion of your European sites differ from the 2 sites you're using now?

Yes. Paul, I think you're still -- you're on deck.

Well, obviously, we would have loved to have done 106 and 105 in the U.S., but the FDA had concerns about cardiotoxicity. And I'm not going to object. I mean, scientists can look at data in good faith and come to different decisions. They said, we're worried. European sites said, we' not. So we went to Europe. We had 9 sites we have utilized in Poland and Italy. All of them worked well, except one site did not follow what has been published as accepted normal. It's very unfortunate because those 2 patients who we've lost, they might still be durable if they'd follow the guidelines. They did not realize those guidelines were in place. We were suspicious why both failures were infections in that one site. So we sent a team out that monitored, identified the problem. The site apologized, said we will follow these guidelines from now on. And other than that, they were a great site. So we intend to use the sites in Europe we're using now. We have met with investigators in Germany who would like to participate in the pivotal trial. We will enroll sites in the U.S. also. If we're going to have to enroll 100 to 150 patients, we want to speed this process as much as possible, which means more sites. So we would anticipate doing this throughout Europe and throughout the U.S.

Do you have a range for the number of sites?

I think we're -- right now, we're assuming it's going to be on the order of magnitude of probably 25 sites, but possibly many more. I will say, Kemp, that predicting the willingness of sites is somewhat dangerous at this point until we know for sure what the trial design, the FDA is -- what trial design the FDA will accept. For example, if they insist on this being a randomized trial, the interesting question is, what's the comparator because there's technically -- other than the targeted therapies, there's technically no other drug approved for use in second-line patients. Historically, we've seen other companies default to cytarabine as the control arm even though it's technically not approved as a second-line therapy for AML, it's commonly used. So I think that's how they got there. But I can tell you, I've run into a lot of clinicians that they just shake their head and say, "I don't like that trial design. I don't -- I'm not sure it's ethical and I'm not sure we would participate in it." So we're cautious about predicting how many sites we're going to have until we know what the trial design is that will be accepted by the FDA.

Okay. So we have -- our next question comes from Jason McCarthy of Maxim Group.

Okay. Great. I have more of a kind of an abstract question, if you would. Because if you think about using something like Annamycin or we can call it a next-gen anthracycline, even up towards first-line. Can you talk a little bit about how chemotherapy historically has been administered with a week on, week off and a week for seeing how the patient did and you kind of cycle back around and how something like Annamycin may be able to change that narrative in how a chemotherapy could potentially be used by pushing the dose and changing how often it's used?

Certainly, Moleculin has a response to that, Jason. But I'd love to invite the independent clinicians on the call to comment on that. So Dr. Andreeff, do you have any thoughts there about how to position Annamycin that way?

Yes. So the standard treatment, as Dr. Tallman stated, is 7 plus 3. So we have 3 days of anthracycline, 7 days of Ara-C. And it all depends on PK. And I think the PK studies are still ongoing. This is not a week on, week off treatment. This is a onetime treatment over a week followed by a 3-week observation period that allows count recovery and assessment of response. So I'm not familiar with the latest PK data. But this -- I don't see a major change in this established regimen for 50 years, the combination of Ara-C and anthracycline. And the Ara-C dose used here 2 grams per meter square, that's on the high side. I think we can get the same or even better responses with 1.5 grams per meter square. That's what we are using. Dr. Tallman, any thoughts?

Like me having said that it may not change the logistics of delivery and administration of chemotherapy, I can tell you that we are very excited about the possibility of Annamycin substituting and even replacing the current anthracyclines because of its increased efficacy, its ability to avoid some resistance mechanisms. So we're very enthusiastic, as enthusiastic as we are about seeing what this drug will do in a larger trial in second line, I think we're very excited about its potential for first-line therapy.

And just lastly, what level of durability of response do you think you need to see in addition to what we've seen already, including the data this morning, to be clinically meaningful? And how do you look at that across the number of lines of therapy that patients may have gone through, whether it's second or now looking towards third line or possibly later than that? Can you kind of break down what would be meaningful in each of those lines?

Let me just remind for anybody that tuned in late, that the data we've shown today, which is new data. So we haven't disclosed durability up until now because we just -- we haven't had the passage of enough time. But in today's presentation, we're basically at 5 months, 4.9 months durability of response and that number is growing. So we're probably going to be better than that. But having said that, it's just a telling time where we are now, let me defer to the 2 independent clinicians to get their thoughts on durability.

So my take would be that this is not the most important endpoint. What we want is a complete remission, hopefully, MRD-negative followed by transplant. So if you relapse and you have the good fortune of achieving a second CR. The next step will be an allo transplant. And again, there is almost no age limit anymore for allo transplants. So the goal from my perspective would be to get the patient to transplant in the best possible shape, and that means MRD negativity at least by flow cytometry. Martin?

I agree. And it's -- you made a couple of important points. The best endpoint may not be overall survival for second-line patients because most, if not all, will go to a transplant -- not only is the age and -- well, not a limit anymore, but the identification of a suitable donor is also not a limitation. So most patients will get an allogeneic transplant. So complete remission emerges as the most important endpoint, I think.

Okay. That's -- just sorry, one last quick one because you just mentioned something about transplant. And we saw this in the Actinium trial, whose antibody radiotherapy is very different, but it was for in place of chemotherapy regimens to get relapsed/refractory patients with AML to a bone transplant. They were very successful. But if you have something like Annamycin that is in these later lines of therapy, and you are getting these CRs, does that open up the discussion as this is potentially a new standard of care to get people bridged to a transplant?

Yes. Let me -- again, invite our independent clinicians to comment on that, we'd love to hear your thoughts.

Yes, I think if Annamycin really replaces and I can certainly see that happening, has the potential to replace the current anthracyclines, more patients should get to a transplant. And in fact, more patients will get -- hopefully achieve a complete remission. And we say most patients will get to transplant, but it even raises the possibility that you may not need transplant as often if a durable MRD-negative CR is achieved at a higher rate with Annamycin.

So in patients with core binding factor leukemias, they today are being treated not with transplant, but they get Ara-C-based, Ara-C anthracycline combinations. In these patients, I could see in [ our queues ] increased cure rates with the Ara-C/Annamycin combination. And there will be one group that would not need a transplant.

Okay. This does conclude the Q&A. I think before we close the event, we'd like to do a quick around the table, so to speak, of parting comments. So we'd love to speak, have -- Dr. Tallman, maybe you go first. Do you have any closing remarks?

Just that I've appreciated the opportunity to participate today. And I was very excited to join the Scientific Advisory Board. I think this is a very exciting agent. I think it has great potential, not only for second line, as we've mentioned several times, but in first line.

Thank you, it was an honor having you. Dr. Andreeff, how about you? Any closing remarks?

No. I think Dr. Tallman really summed it up. The response rates are unprecedented in relapsed patients, very exciting. And the duration is also unusual. So I'm very optimistic about this agent.

It's a true privilege having you with us. Dr. Waymack?

I would also like to thank everybody for calling in. And we at Moleculin look forward to another such call next year as we give you an update on our hopefully ongoing Phase III pivotal trial.

Wonderful. Okay. Wally, we will end with you. Any closing remarks?

Well, I'm going to sound like the typical business guy. But first, I really want to extend a very hearty thanks to Doctors Tallman and Andreeff for joining us today. Your time is valuable, and this was really important for Annamycin and for AML patients. Look, as I have in other recent discussions, I want to emphasize that our current stock trading value is, frankly, nonsensical in light of this recent data. Look, we're now Phase III-ready. We have dramatically better data than any drug approved for second- use in AML and some of those other assets have recently been valued in the billions. I'm a recent buyer of our own stock. I'm putting my money where my mouth is, as are my senior management colleagues, Paul and Jon on this call. It's our belief that once enough of the right investors finally pay attention to what's been happening here, Moleculin stock could run up and quickly. And I believe when that happens for us, a lot of people are going to be asking themselves, how did I miss this? Now is the time for investors to filter out all the noise and look at the hard data. And hopefully, this discussion helps convince more investors to do just that, Jenene. So thank you.

Great. And Jon, I just realized I don't want to leave you out. You weren't on my screen, and I see you there, and I would love to hear your parting remarks. Thank you.

Well, first of all, I want to thank Dr. Tallman and Dr. Andreeff for joining us. It's such a great privilege to have you guys join the Science Advisory Board. I would just like to echo what Wally and Paul have both said, we have really set out a time line roughly 6 months ago, and we've stuck to that. And I hope that not only investors take stock in what Wally and Paul have said, but also that we've been able to deliver what we've said that we were going to deliver. So stick with us, and thanks for your time today.

Great. This does conclude the Moleculin AML Clinical Day. I want to thank everyone for joining. We will have a replay on the company's website at moleculinbio.com. Thank you.

Thanks.