Q1 2024 Moleculin Biotech Inc Earnings Call
Okay.
Operator: Hello and welcome to the Moleculin Biotech first quarter 2024 quarterly update conference call and webcast. The 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, Jenene Thomas, Investor Relations. Please go ahead, Jenene. Thank you.
Speaker Change: Hello, and welcome to the my Lucky with biotech first quarter 2024 quarterly update conference call and webcast.
Speaker Change: A 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. Please go ahead Tony.
Jenene D. Thomas: Thank you, Daryl. Good morning and welcome, everyone.
Jenene D. Thomas: Thank you Darryl good morning, and welcome everyone. At this time I would like to remind our listeners that remarks made during this webcast may state managements 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 our base.
Jenene D. Thomas: 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 Moleculin's current expectations, and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements.
Jenene D. Thomas: Some of the factors that could cause actual results to differ materially from those contemplated by such forward-looking statements are discussed in the periodic reports that Moleculin files with the Securities and Exchange Commission. These documents are available in the Investors section of the company's website and on the SEC's website. 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.
Jenene D. Thomas: On molecular and its 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 those contemplated by such forward looking statements are discussed in the periodic reports molecular and files with the securities and exchange can.
Jenene D. Thomas: 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 web cast relates to or its based on studies publications surveys and other data obtained from third party sources and the company's own.
Jenene D. Thomas: While the company believes these third-party sources to be reliable, as is the state 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 has verified any information obtained from third-party sources. Any data discussed regarding clinical trials and progress are considered preliminary and subject to change.
Jenene D. Thomas: The message research while the company believes these third party sources to be reliable as of the date of this presentation. It does not independently verify it 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.
Speaker Change: Ada discuss regarding clinical trials in progress are considered preliminary and subject to change joining us on today's call from molecular and his leadership team are Walter Clements, Chairman and Chief Executive Officer, Dr. John Paule way back Senior Chief Medical Officer, and Jonathan Foster Executive Vice President and Chief Financial Officer, I would now like to turn the call.
Jenene D. Thomas: Joining us on today's call from Moleculin's leadership team are Walter Klempp, Chairman and Chief Executive Officer, Dr. John 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 Walter Klempp, Chairman and CEO. Wally, please proceed.
Walter V. Klemp: Well, calling 2024 transformational for molecular biology would be a massive understatement. We've now been able to lock in composition of matter patent protection for anamycin, giving us market exclusivity at least through 2040. This is the gold standard for intellectual property, and it's also underpinned by orphan drug designation in both the US and the EU. But all of this proprietary protection would be meaningless if we didn't have the safety and efficacy we need to be approved and to be useful for patients. Well, now we've treated over 80 patients and counting with zero cardiotoxicity, something that no currently approved anthracycline can claim. But most importantly,
Walter V. Klemp: We've now shown a 60% CRC rate in second-line patients, and key opinion leaders are beginning to weigh in on what they think of this level of performance. In fact, you can hear what they're saying by checking out the clinical day video by clicking on the banner on the homepage of our website at Moleculin.com. Simply put,
Speaker Change: Over to Walter Clements, Chairman and CEO Walid. Please proceed.
Walter V. Klemp: Thanks, Jamie.
Walter V. Klemp: Call in 2024 transformational for molecular.
Walter V. Klemp: Would be a massive understatement.
Walter V. Klemp: We've now been able to lock in composition of matter patent protection for animation, giving us market exclusivity at least through 'twenty 40.
Walter V. Klemp: This is the gold standard for intellectual property and it's also underpinned by orphan drug designation in both the U S and the EU.
Walter V. Klemp: Of course, all of this proprietary protection would be meaningless, if we didn't have the safety and efficacy we need to be approved.
Walter V. Klemp: And to be useful for patients well now we've treated over 80 patients and counting with zero cardio toxicity something that no currently approved anthracycline can claim.
Walter V. Klemp: But most importantly.
Walter V. Klemp: We've now shown a 60% CRC rate in second line patients and key opinion leaders are beginning to weigh in on what they think of this level of performance in.
Walter V. Klemp: In fact, you can hear what they're saying by checking out the clinical data video by clicking on the banner on the homepage of our website at <unk> Dot com.
Walter V. Klemp: Simply put.
Walter V. Klemp: Our efficacy results in our clinical trials to date are better than any drug ever approved for use in AML, period, and with a game-changing safety profile. It's impossible for me to overstate the importance of our latest data. The greatest unmet need in AML is for an effective second-line therapy. Accordingly, we prioritized recruitment of second-line patients in our latest AML clinical trial, and as you can see, we had a 60% CRC rate. Not only that, but we had a 50% CR rate. Nobody does that in second line, no one.
Walter V. Klemp: Our efficacy results in our clinical trials to date are better than any drug.
Walter V. Klemp: Ever approved for use in AML period.
Walter V. Klemp: And with a game changing safety profile.
Walter V. Klemp: Look.
Walter V. Klemp: It's impossible for me to overstate the importance of our latest data.
Walter V. Klemp: The greatest unmet need in AML is for an effective second line therapy.
Walter V. Klemp: Accordingly, we prioritized recruitment of second line patients and our latest AML clinical trial and as you can see.
Walter V. Klemp: We had a 60% CRC rate.
Walter V. Klemp: Not only that but we had a 50% CR rate.
Speaker Change: Nobody does that in second line nobody.
Walter V. Klemp: Again, we've never seen a performance like this high from any approved AML therapy, and that's why the leading experts in leukemia are beginning to take notice. Since we closed the clinical trial to additional second-line patients, We've now added a few more first patients in first line and third line, and we've seen more complete remissions, driving the overall performance up for the trial in total and putting us now at a total of 20 patients. We'll continue this type of recruitment, especially in first line, so that we can learn as much as possible before kicking off our registration trial.
Speaker Change: Again, we've never seen a performance like this high from any approved AML therapy, and that's why the leading experts in leukemia are beginning to take notice.
Speaker Change: Since we closed the clinical trial two additional second line patients with.
Speaker Change: We've now added a few more first Ah patients in first line and third launch and we've seen more complete remissions driving the overall performance for the trial and tool and putting US now at a total of 20 patients.
Speaker Change: We will continue this type of recruitment, especially in first line. So that we can learn as much as possible before kicking off our registration trial.
Walter V. Klemp: But let's be clear, we don't believe we need any more data before proceeding with the registration enabling trial in second line. And that's why we're about to have our end of phase two meeting with the FDA. And clearly, the next point of information is determining how the FDA views it all. As a point of reference, our Senior Chief Medical Officer, Paul Waymack, worked for the FDA, and he has a pretty well-informed point of view on it.
Speaker Change: But let's be clear, we don't believe we need any more data before proceeding with the registration enabling trial in second line and that's why we're about to have our end of phase two meeting with the FDA.
Speaker Change: And clearly.
Speaker Change: The most important next point of information is determining how the FDA views all this.
Speaker Change: As a point of reference our senior Chief Medical Officer, Paul Way Mac worked for the FDA and he has a pretty well informed point of view on this.
Walter V. Klemp: On that basis, we're requesting the FDA agree to an open-label single-arm trial of around 100 to 150 patients as our pivotal approval trial. This trial will be in second-line patients where there is a clear unmet medical need, as confirmed by the key opinion leaders on last week's conference call, and where we are confident that our most recent results, if repeated in this larger population, would be more than sufficient to achieve approval. In fact, we estimate we should be able to achieve approval with a performance level much lower than the one we've recently reported.
Speaker Change: On that basis, we're requesting the F. D. A agreed to an open label single arm trial of around 100 to 150 patients as our pivotal approval trial.
This trial will be in second line patients, where there is a clear unmet medical need as confirmed by the key opinion leaders on last weeks conference call and where we are confident that our most recent results. If repeated in this larger population would be more than sufficient to achieve approval in.
Speaker Change: In fact, we estimate we should be able to achieve approval with a performance level much lower than the one we've recently reported.
Walter V. Klemp: So what does this mean for shareholders? In recent discussions, I've made no secret about the fact that we believe molecular is significantly undervalued. This chart on slide seven helps explain why we believe that.
Speaker Change: So what does this mean for shareholders.
Speaker Change: In recent discussions I've made no secret about the fact that we believe molecular is significantly undervalued.
Speaker Change: This chart on slide seven helps explain why we believe that.
Walter V. Klemp: If you've been following the AML space, you have undoubtedly heard about Jazz Pharma paying $1.5 billion in 2016 for Vixios, and that's a drug that is really only relevant to the AML space and has a relatively limited share market. And that deal was cut pre-approval. And now you have Ave's Venetoclax, which is generating $2 billion a year in revenue, which at typical revenue multiples implies that Venetoclax could be valued at over $10 billion as a standalone drug.
Speaker Change: If you've been following the AML space you have undoubtedly heard about jazz pharma paying $1 $5 billion in 2016 for VIX use and that's a drug that is really only relevant to the AML space and has a relatively limited share market and that deal was cut pre approval.
Speaker Change: And now you have abbvie has many of the coax, which is generating $2 billion a year in revenue, which a typical revenue multiples implies that the need of clocks could be valued at over $10 billion as a standalone drug.
Walter V. Klemp: What's even more illuminating, though, is how some of the gene-targeted therapies are being valued. For example, you've got Servier, a French mid-pharmacy company paying nearly $2 billion for two niche-focused AML drugs, IDFA and Tidsolo. We estimate their combined impact on the AML population is to potentially produce complete remission in about six percent. Six percent, of the overall AML population Then you have companies like Cura and Syndax, whose drugs are relevant to a fraction of the AML population and whose companies are being valued in billions.
Speaker Change: What's even more illuminating though is how some of the gene targeted therapies are being valued for example, you've got servier.
Speaker Change: A French mid pharma company paying nearly $2 billion for two niche focused AML drugs I deeper and to do so.
Speaker Change: Well, we estimate their combined impact on the AML population is to potentially produce complete remission in about 6% 6%.
Speaker Change: Of the overall AML population.
Speaker Change: Then you have companies like Cura, and syntax, whose drugs are relevant to a fraction of the AML population and who are being valued in the billions.
Walter V. Klemp: In fact, let's drill down on Cura for a bit. They're roughly at the same stage as we are, with phase two results, and looking to start a pivotal trial. But by the way, their reported performance is significantly lower than ours. And yet, Cura has a $1.5 billion market cap. To show you how ridiculous this disparity is, If we had their market cap, our stock would be trading above $600 per share. And I firmly believe we have a better drug candidate that will save many more lives.
Speaker Change: In fact, let's drill down on cure for a moment.
Speaker Change: They are roughly at the same stage as we are phase II results and looking to start a pivotal trial, but by the way they're reported performance is significantly lower than ours and yet sure of has a 1.5 billion dollar market cap.
Speaker Change: To show you how ridiculous. This disparity is if we had their market cap or stock would be trading above $600 per share.
Speaker Change: And I firmly believe we have a better drug candidate.
Speaker Change: That will save many more lives.
Walter V. Klemp: This kind of disparity simply cannot continue, and we believe it's only a matter of time before the market wakes up. In the meantime, this is an earnings call, so I need to give our EVP and CFO, John Foster, a chance to weigh in. Okay, John?
Speaker Change: This kind of disparity simply cannot continue and we believe it's only a matter of time before the market wakes up to this.
Speaker Change: In the meantime, this is an earnings call. So I need to give our EVP CFO, Jon Foster a chance to weigh in John.
Jonathan P. Foster: Thanks Wally.
Jonathan P. Foster: For the quarter, R&D expense was $4.3 million. For the quarter versus $5.7 million, same period a year ago, the decrease of $1.4 million is mainly related to the clinical trial activity decrease, as we're winding down NB106 and NB107 trials as compared to a year ago.
Jonathan P. Foster: For the quarter R&D expense was $4 3 million for the quarter versus $5 7 million same period a year ago.
Jonathan P. Foster: The decrease of one $4 million is mainly related to the clinical trial activity decreases.
Jonathan P. Foster: As you are winding down and be 106, MB 107 trials as compared to a year.
Jonathan P. Foster: G&A expense was $2.4 million for the quarter, less than the $2.6 million in the same period last year. However, the use of cash was higher in this period as we made some expenditures on drug supply previously accrued, leaving us with roughly $17 million in cash on hand for the court. The market cap is at roughly $13 million, taking into account the 2.5 million shares outstanding, which includes pre-funded warrants. [inaudible] Daily trading volume is at 30,000 shares per day. And we have moved some planned expenditures from 2024 into 2025, and our cash runway now runs deeper into Q4 2024 than previously planned.
Jonathan P. Foster: G&A expense was two $4 million for the quarter.
Less than the $2 $6 million in the same period last year.
The use of cash was higher in this period as we made some expenditures on drug supply previously accrued, leaving us with roughly $17 million in cash on hand for the quarter.
Jonathan P. Foster: Our market cap is at roughly $13 million, taking into account a $2 5 million shares outstanding which includes pre funded warrants.
Jonathan P. Foster: Our average.
Jonathan P. Foster: Daily trading volume is at 30000 shares per day.
Jonathan P. Foster: And we have moved some planned expenditures from 2024, and the 2025 and our cash run way now runs deeper into Q4 2024 than previously planned.
Jonathan P. Foster: Wow.
Speaker Change: Thanks, John.
Walter V. Klemp: Well, if there's one takeaway from this call, I hope it's that we believe our clinical data is strong enough to warrant approval if repeated in the context of a pivotal trial. And that's exactly where we're heading. Assuming we receive a supportive response from the FDA, we should be kicking off that pivotal trial by the end of this year.
Well.
Speaker Change: If there's one takeaway from this call I hope it's that we believe our clinical data is strong enough to warrant approval if repeat it in the context of a pivotal trial and that's exactly where we're heading.
Speaker Change: Assuming we receive a supportive response from the FDA, we should be kicking off that pivotal trial by the end of this year and in our view.
Walter V. Klemp: And in our view... That means we are now entering the window that is typical for exits in our industry. Obviously, our stock price is not yet tracking this possibility, but we believe it eventually will. And if we're right about that, we believe shareholders will finally have an opportunity to see the kind of valuation they deserve.
Speaker Change: That means we are now entering the window that is typical for exits in our industry.
Speaker Change: Obviously, our stock price has not yet tracking with this possibility, but we believe it eventually will.
Speaker Change: And if we're right about that we believe shareholders will finally have an opportunity to see the kind of valuation that they deserve.
Walter V. Klemp: I challenge anyone considering an investment in Moleculin to just look at the data. Compare us with any other asset in the AML space. Listen to what key opinion leaders are saying about Anamycin, and I promise you, when you do, you will ask yourself, how can MBRX be valued so low? My answer is, we shouldn't be, and we won't be for much longer. Now, clearly, that's only my opinion.
Speaker Change: I challenge anyone considering an investment in molecular could just look at the data.
Speaker Change: Compare us with any other asset in the AML space.
Speaker Change: Listen to what key opinion leaders are saying about antibodies.
Speaker Change: I promise you when you do.
Speaker Change: You will ask yourself, how can M b Rx P value so low.
Speaker Change: My answer is we shouldnt be and we won't be for much longer.
Walter V. Klemp: But this isn't just talk on management's part. We've been investing our own after-tax dollars in Moleculin stock because of our confidence in this opportunity. So thanks for joining us today, and we look forward to the upcoming critical news flow on our progress.
Speaker Change: Now clearly that's only my opinion, but this isn't just talk on management's part we've been investing our own after tax dollars in molecular stock because of our confidence in this opportunity.
Speaker Change: So thanks for joining us today, and we look forward to the upcoming critical news flow on our progress.
Operator: Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the list. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the start key. One moment, please, while we poll for your question. Our first questions come from the line of Jonathan Aschoff with Roth MKM. Please proceed with your question.
Speaker Change: Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad.
Speaker Change: A confirmation tone will indicate your line is in the question queue.
Speaker Change: Press Star two if you would like to remove your question from the queue for participants using speaker equipment. It may be necessary to pick up your handset before pressing the star keys.
One moment, please while we poll for your questions.
Speaker Change: Our first questions come from the line of Jonathan Aschoff with Roth M. Kingham. Please proceed with your questions.
Jonathan Matthew Aschoff: Thank you guys and good morning. I was curious, you know, whether there has been anything else even remotely akin to allergic reactions or is it just as reported, you know, several weeks ago for the, I think, one patient. Well, there's no new information, Jonathan, but I want to give Paul a chance to sort of weigh in. That's an important point as, as you know, it actually, we think, has mathematically the potential to cause our numbers to be currently, actually slightly understated. But Paul, would you like to explain why that is?
Jonathan Matthew Aschoff: Thank you guys and good morning, I was curious you know has there been anything.
Jonathan Matthew Aschoff: Even remotely akin to allergic reactions or is it just as was reported.
Jonathan Matthew Aschoff: Several weeks ago for the I think one patient.
Well.
There's no new information, Jonathan, but I want to give Paul a chance to sort of weigh in because that's an important point as it.
Paul: As you know.
Paul: It actually we think has mathematically the potential to cause our numbers to be.
Paul: Currently actually slightly understated, but Paul do you want to explain why that is.
John Paul Waymack: Yes. First, to answer your question, that case was a typical allergic reaction where when the drug infusion began, the patient began to have a little wheezing, and cutting back on the rate did not stop it. It's been the only patient in whom this has happened in over 80 patients whom we have treated, so it appears to be a relatively rare event. We say unfortunate because that patient was one of the 10 patients who received second-line therapy.
Paul: Yes first of your question.
Paul: The case was a typical allergic reaction where and when the drug infusion began the patient.
Paul: <unk> began to have a little wheezing.
Paul: And coming back on the rate did not stop it it's been the only patient in whom this has happened in over 80 patients, whom we've treated what appears to be a relatively rare event.
Paul: So unfortunate because that patient was one of the 10 patients who receive second line therapy and of course in an intent to treat analysis. He counts even though he never was going to get a response since we never received more than the micro amount of a drug.
John Paul Waymack: And, of course, in an intent-to-treat analysis, he counts even though he was never going to get a response since he never received more than a micro amount of the drug. So of the 10 patients, we had six CRs, and one PR. Of the three people who had no response, he was one of the three where that was because
Paul: So of the 10 patients we had the six Crs one PR of the three people who had no response. He was one of the freeware that was because he never got the drone.
John Paul Waymack: But then we also had another one that was allergic to Cytarabine.
Speaker Change: Okay. Thanks, but then we also had another one I'm sorry allergic to cytarabine.
Speaker Change: Correct correct.
John Paul Waymack: Yeah, that was not a second line one, though. But yes, we had one allergic reaction to cytarabine.
Speaker Change: Yes that was not a second line one of them, but yes, we had one allergic reaction to cytarabine.
Walter V. Klemp: Okay. And I was thinking about the, uh, what should be this quarter, the end of phase two meeting, you know, when you say one half 25 to start the trial, are you just being conservative? And maybe it's more like the beginning of the first half, like, or do you really need a year? You know, with that decent CRC rate, you start a trial after that meeting. We are trying to, I mean, Jonathan, we've interacted with you for a long time. I think you know we're fairly conservative, and we always like to leave room for the unforeseen.
Okay, and I was thinking about the.
Speaker Change: What should be this quarter or the end of phase two meeting when you say one half 'twenty five to start the trial are you just being conservative and maybe it's more like the beginning of the first half.
Speaker Change: Or do you really need a year.
Speaker Change: With that decent CRC rate started trial after that meeting.
Speaker Change: We are trying to Jonathan.
Speaker Change: We've.
Speaker Change: Interacted with you for a long time I think you know, we're fairly conservative and we always like to leave room for the unforeseen.
Walter V. Klemp: Technically speaking, we should be in a position to start the trial even before the end of the year, but inevitably in clinical trials, there's always one last thing that has to be ironed out. So we're describing it as one half of 25 to give ourselves a bit of leeway. But I agree with you. It should be right at the beginning of 25. Okay, and then not to nitpick, but in that same little list of future events, there's, you know, this quarter, there should be the meeting, like I said, the EOPT, but then there's another line item, second half of 2026 for feedback from the EOP2 meeting. I don't really understand. That's supposed to be something that happens after your single-arm trial. I know that sounds like a typo.
Speaker Change: Technically speaking, we should be in a position to start the trial, even before the end of the year, but inevitably in clinical trials. There's always one last thing that that has to be ironed out so what.
Speaker Change: We're describing it as one half 'twenty five to give ourselves a bit of leeway, but I agree with you. It's it should be right at the beginning of.
Speaker Change: 25.
Speaker Change: Okay, and then not to nitpick, but in that same little list of.
Speaker Change: Future events, there as you know this quarter there shouldn't be the meeting like I said the O P. T. But then there is another line item.
Speaker Change: Second half of 2026 for feedback from the op two meeting.
Speaker Change: I don't really get that.
Speaker Change: So, let's say something that happens after your single arm trial.
Speaker Change: No.
Speaker Change: Sounds like a typo.
Speaker Change: No I'm looking at the slot right now.
Walter V. Klemp: Yeah, I'm looking at the slide right now. It's the end of phase one meeting for SAP 2024, initiating for 2025. The feedback will be in the third quarter of this year.
Speaker Change: In the phase one meeting Bruce out 24 before initiate 2025, what's the feedback in the third quarter of this year.
Walter V. Klemp: It says H2-2026 in the press release.
Speaker Change: It says H 2026 in the press release.
Speaker Change: Yes.
Speaker Change: Include the pivotal trial.
Walter V. Klemp: Okay, and I think... We'll check that. Thank you, John.
Speaker Change: Okay.
Speaker Change: And I think we'll check that thank you John.
Speaker Change: Yeah have you seen.
Speaker Change: Enrolment recruitment ease I guess, let's call it.
Walter V. Klemp: Yeah, have you seen enrollment, you know, recruitment fees, I guess, let's call it? go become more easy, commensurate with the additional responses you've been showing over time? How are you faring against the other clinical stage AML competition? Because there is a decent amount of... Well, there's no, yeah, there's no question that
Speaker Change: Go.
Speaker Change: Become more easy commensurate with the additional responses you've been showing overtime. You know how is how are you stand against the other clinical stage AML competition, because there is a decent amount of that.
Speaker Change: Sure.
Speaker Change: Yes, Theres no question that.
Walter V. Klemp: Once, we started to see complete remissions in second-line patients.
Speaker Change: Once once we started to see complete remissions in second line patients.
Speaker Change: There is a.
Walter V. Klemp: There's a regular conference call where all the investigators have a chance to participate and share in the information that's going on with the clinical trial. Once that happens, and so that information gets out pretty quickly. And once that started to happen, you can just see it; all of a sudden, more and more people started recruiting, and recruiting picked up. I mean, we saw recruitment probably triple in pace when that started to happen.
Speaker Change: There's a regular <unk>.
Speaker Change: Conference call, where all the investigators have a chance to participate in share in the information that's going on with clinical trial once that and so that information gets out pretty quickly and once that started to happen. It was you can just see it all of a sudden more and more people start recruiting and recruiting.
Speaker Change: Picked up I mean, we saw recruitment probably triple pay in pace when that started to happen.
Walter V. Klemp: I can't really comment relative to other competitive trials. Other than to say... clinicians. Every one of these clinicians, when you when you sit down with them, you know, and really talk, you know, about the reality of clinical trials, it becomes glaringly apparent that what they care most about is the welfare of their patients, as they should.
Can't really comment relative to <unk>.
Other competitive trials.
Speaker Change: Other than to say.
Speaker Change: Yeah.
Speaker Change: Clinicians.
Speaker Change: All every one of these clinicians when you when you sit down with them.
Speaker Change: Talk about.
Speaker Change: The reality of clinical trial, it becomes glaringly apparent what they care most about is the welfare of their patients as they should.
Walter V. Klemp: So even though there are clinical trials out there for targeted therapies, I mean, let's face it, the performance of targeted therapies has been kind of dismal. I mean, it's just enough to get them approved, but it really sets a low bar, you know, 20% CR rates, that kind of thing.
Speaker Change: And so even though there are.
Speaker Change: Clinical trials out there for targeted therapies, I mean, let's face it the performance of targeted therapies has been kind of dismal.
Speaker Change: It's just enough to get them approved but it really sets a low bar.
Speaker Change: 20% CR.
Speaker Change: CR rates that kind of thing and clinicians are not blind to that and so if.
Walter V. Klemp: And clinicians are not blind to that. And so if they see that their patient, you know, might line up for FLT3 or might line up for another mutation for which there are currently clinical trials. But now that they realize they can achieve a 60% CR rate with anamycin, it puts a lot of pressure on them to take our trial over somebody else. At least that's been based on the nine clinical sites that we have right now.
Speaker Change: If they see that they've got let's say their patient.
Speaker Change: Mike lineup for flip three or might lineup for another mutation that are.
Speaker Change: Is that work for which there are currently clinical trials.
Speaker Change: But now that they they realize they can they can achieve a 60% CR rate.
Within <unk> it is.
Speaker Change: It puts a lot of pressure on them to pick our trial over somebody else at least state that's been based on our.
Speaker Change: The nine clinical sites that we have right now we're going to obviously have more clinical sites for the pivotal trial.
Walter V. Klemp: We're obviously going to have more clinical sites for the pivotal trial, and I think one of the most important jobs we're gonna have is making sure all of those sites really understand the data so they have the same level of enthusiasm as our current sites. Great, that sounds like it bodes well for Phase 3. Thank you. Yeah, yeah. Thanks, Jonathan.
Speaker Change: And I think one of the most important jobs, we're going to have is making sure all of those sites really understand the data. So they have the same level of enthusiasm that our current sites too.
Speaker Change: Great It sounds like it bodes well for phase III. Thank you yeah. Thanks, Jonathan.
Operator: Thank you. Our next questions come from the line of Jason McCarthy with Maxim Group. Please proceed with your question.
Speaker Change: Thank you. Our next question is coming from the line of Jason Mccarthy with Maxim Group. Please proceed with your questions.
Jason Wesly McCarthy: Hi guys, this is Chad answering for Jason. Thanks for taking the questions. So can you give an idea of the end values and the pivotal trials for the, you know, five approved second-line drugs? And how would that compare to the upcoming potential pivotal design?
Speaker Change: Hi, guys. This is trevor on for Jason Thanks for taking the questions.
Trevor: So could you give us an idea of.
Speaker Change: You know the end values in the pivotal trials for the five approved second line drugs and.
Trevor: And how would that compare to the upcoming potential pivotal design.
Walter V. Klemp: So I'm going to let Paul comment on the impact of the pivotal design, but just as a point of information. In fact, our corporate deck on the website that's available on the website has a slide dedicated to this question about, you know, the approval rates for the five currently approved drugs. And just for the record, there are five. Drugs that are approved for use in second-line AML in the U.S. Not all of them are approved in the EU, and that has a lot to do with, frankly, the relatively poor performance levels and the fact that many of these drugs were approved on the basis of a single-arm open-label trial, which the EU categorically will not utilize for drug approvals for marketing authorizations.
Trevor: So.
Trevor: I'm going to let Paul comment on the impact on the pivotal design, but just as a point of information in fact, there is a.
Paul: Our corporate deck on the website and it's available on the website has a slide dedicated to this question about the approval rates for the.
Paul: The five currently approved.
Paul: Drugs and so it's just just for the record.
Paul: There are five.
Paul: Drugs that are approved for use in second line AML in the U S.
Paul: Not all of them.
Paul: Our approved in the EU.
Paul: And that has that has a lot to do with.
Paul: Frankly, the relatively poor performance levels.
Paul: And the fact that many of these drugs were approved on the basis of our.
Paul: A single arm open label trial, which the EU categorically.
Paul: We'll not utilized for.
For drug approvals for marketing authorizations.
Walter V. Klemp: But that slide in our corporate deck lists out both the CR and the CRE, HRC, or I the additional component that makes up the CRC composite CR rate. And, you know, what you'll see is the CR rates on average are 21 percent. Some below, some above, and you get a little bit better performance because these drugs can produce CRIs or CRHs. But no matter how you look at the data, we're double that performance, basically. So that's why we're so. Paul, you want to weigh in here relative to the impact on approval?
Paul: But that that slide in our corporate deck lists out the both the CR and the C.
Paul: C R H or cri, the additional component that makes up CRC composite CR rate.
Paul: And what Youll see is the CR rates.
Paul: On average or 21%.
Paul: Some below some above.
Paul: And you get a little bit better performance because these drugs tend to produce a CR is for CRH is.
Paul: But.
Paul: No matter, how you look at the data.
We're double that performance basically.
Paul: So that's you know that's why we're so.
Speaker Change: Frankly bullish about our capability to Paul you want to you want to weigh in here.
Paul: Relative to <unk>.
Paul: The impact on approval.
John Paul Waymack: Sure. To answer the question, for the five drugs that were approved as second-line monotherapies, the number of patients varied from around 100 to 300. Now, I think it's important to always recognize who your audience is, what they want, and the answer is the FDA. And for the FDA, the average response is not as important as the 95% confidence interval. And the CR rates for these drugs were from around 15% to 30%, which does not give you overwhelming confidence in the 95% confidence interval with low numbers of patients. So when you're getting low response rates, you're going to need more patience.
Paul: Sure to answer the question for the drugs that were approved in second line monotherapy. The number of patients vary from around 100 to 300 now I think it's important to always recognize who is your audience what do they want and the answer is the FDA and for the FDA.
Paul: The average response is not as important as the 95% confidence intervals.
Paul: The CR rates for these drugs was from around 15%, 30%, which does not give you overwhelming confidence from the 95% confidence interval with low numbers of patients, but when youre getting low response rates, you're going to need more patients. You reason, we've proposed only a hunter.
John Paul Waymack: The reason we proposed only 100 patients is that if we're getting anywhere near a 60% response rate. When you do 95% confidence intervals for that, you don't need a lot of patience to show you're getting a big effect because the FDA is going to worry about the lower limit of the 95% confidence interval. So although this would be a rather low number of patients from the perspective of other drugs, because our response rates are so unprecedented, we can propose a lower rate.
Paul: <unk> patients is if we're getting anywhere near.
Paul: 60% response rate when you do 95% confidence intervals or that you don't need a lot of patients to show you're getting a big effect because the FDA is going to worry about the lower limit of the 95% confidence interval.
Paul: Although this would be a rather low number of patients or from a perspective of other drugs.
Paul: Our response rates are so unprecedented we can propose the lower rates.
John Paul Waymack: To be full disclosure, the only concern we have is that we are combination therapy as opposed to those other four drugs, and that might cause the FDA to say, well, we generally want a randomized trial for combination therapy. But again, and true in the past, there has never been a drug with this response rate. This is just unprecedented. So we think we therefore have a case to say that when it's that high, you have to do a different general plan for the final clinical trial of the drug.
Paul: The full disclosure the only concern we have is we our combination therapy.
Paul: As opposed to those other four drugs in that might cause the FDA to say well, we generally want a randomized trial for.
Paul: <unk> combination therapy, but again went through in the past, but there has never been a drug with this response rate.
Paul: This is just unprecedented so we think we therefore have a case to say when it's that high.
Paul: You have to do a different general plan for the final clinical trial of the drug.
Walter V. Klemp: Got it. Okay, thanks. That was really helpful. And then... While, of course, Second Line's the focus now, can you maybe just speak a bit about the plan, you know, eventually for First Line and sort of the opportunity there?
Speaker Change: Got it okay. Thanks that was really helpful.
Speaker Change: And then.
Speaker Change: Well of course second line, but the focus now could you maybe just speak a bit to the plan essentially for first line and sort of the opportunity there.
Walter V. Klemp: Yeah, again, let me maybe kick that off, but then Paul will weigh in. We mentioned in the prepared remarks here that we're continuing to recruit first-line patients into the existing MB-106 trial. And the reason we're doing that is maybe twofold. But in general, we just want additional data, we want additional knowledge. As Paul said, the response in second line is unprecedented.
Speaker Change: Yeah again, let me maybe kick that off with them.
Paul Wang: I have Paul Wang.
Paul Wang: Hi.
Paul Wang: We mentioned in the prepared remarks here that we are continuing to recruit.
Paul Wang: First line patients.
Paul Wang: Into that the existing and be one of six trial and the reason we're doing that is is maybe two fold, but in general we just won additional data and we want additional knowledge.
Paul Wang: As Paul said the response in second line is unprecedented.
Walter V. Klemp: You would expect, generally speaking, an even better response in first-line patients. And, in fact, so far, that's what we're seeing. Now, it's on a small ant.
Paul Wang: You would expect generally speaking an even better response in first line patients and in fact, so far that's what we're seeing now.
Paul Wang: It's on a small and we won't have three first line patients. So far so you need to be careful with that but as expected.
Walter V. Klemp: We only have three first-line patients so far, so you need to be careful with that. But, as expected, we're seeing a slightly better response rate. It becomes important, I think, on two levels. One, from an approval standpoint. If we're successful in negotiating a single-arm trial with the FDA, then it undoubtedly means we will have to eventually run a confirmatory phase 3 post-approval. That's a high-class problem because at that point, you're already generating revenue and running a trial in parallel. But when we think about the trial, the phase three trial design, we would most prefer It turns out it's probably a first-line trial where you're comparing it head-to-head against, let's say, the existing 7 plus 3 therapy.
Paul Wang: We're seeing a slightly better response rate.
Paul Wang: That it becomes important I think on two levels one from an approval standpoint, if we're successful in it.
Paul Wang: And negotiating a single arm trial with the FDA.
Paul Wang: Then it undoubtedly means we will have to eventually run a confirmatory phase III.
Paul Wang: Post approval.
Paul Wang: That's a high class problem, because you're at that point, you're already generating revenue and and running a trial in parallel.
Paul Wang: But when we think about the the trial the phase III trial design, we would most prefer.
Paul Wang: It turns out it's probably a first line trial, where you're comparing head to head against let's say the existing seven plus three.
Walter V. Klemp: And so the more we know about our drug's performance in the first line before we run that trial, the better we are at structuring that trial. That's, let's say, one important factor. The other important element here is in terms of the exit opportunity for big pharma. You know, they're already looking. We know they're already looking at us and watching what we do. And once you start to understand the drug, you realize it's not just another treatment for AML.
Paul Wang: Therapy.
Paul Wang: And and so.
The more we know about our drugs performance in first line before we run that trial the better we are at structuring that trial.
Paul Wang: Let's let's say one important factor the other important element here is in terms of exit opportunity for big pharma.
Paul Wang: There are already looking we know theyre already looking at us and watching what we're doing.
Paul Wang: And.
Paul Wang: Once you start to understand the drug you realize it's not just it's not going to be simply a second line treatment for AML, that's our pathway for approval and we love that pathway, but the drug is going to be so much more than that in our view it will be become a standard of care most likely display.
Walter V. Klemp: That's our pathway for approval, and we love that pathway. But the drug's going to be so much more than that. In our view, it will become a standard of care, most likely displacing all other anthracyclines, not just in AML but in many indications, which, again, goes back to why the comparison to drugs with companies like Cura is so ridiculous, because anamycin is going to be so much more important to the medical community at large. But Paul, do you want to comment at all on the strategy behind the first line versus the second line? Oh, sure.
Paul Wang: <unk> all other anthracycline not just in an L. But in many indications.
Paul Wang: Again goes back to why the comparison to drugs with companies like curious so ridiculous.
Paul Wang: Because <unk> is going to be so much more important.
Paul Wang: Due to the medical community at large.
Paul Wang: But Paul do you want to you want to comment at all on the.
Paul Wang: Strategy behind first line versus second line.
John Paul Waymack: Sure. And I would agree fully that first-line therapy is the ultimate indication because everybody at some point is first-line. Only some patients progress to second-line therapy. However, again, focus on your audience, focus on FDA. FDA looks and sees that there are lots of drugs that have been approved to treat first-line therapy for AML. However, the five drugs for treating second-line therapy are all for subsets of the population, for patients with flip-free mutations, with isocitrate dehydrogenase mutations. But that's combined less than half of the population.
Paul Wang: Oh sure.
Paul Wang: And I would agree fully first line therapy is the ultimate indication because everybody at some point as first line only some patients progress the second one.
Paul Wang: However, again focus on your audience focus on FDA FDA looks and sees there are lots of drugs that have been approved to treat first line therapy.
Paul Wang: For AML.
Paul Wang: Over the five drugs for treating second line therapy are all for subsets of the population for patients with flip three mutations with Isocitrate dehydrogenase mutations, but that's combined less than half of the population a majority of patients who just need second line therapy. There was no FDA drug.
John Paul Waymack: A majority of patients who get, who need second-line therapy, there is no FDA drug approved and indicated for that. And that is the FDA definition of an unmet medical need, which lowers the bar dramatically as far as patient numbers, trial design, and the like. So, recognizing that that's the easiest, quickest way to an approvable NDA, that's where we're going first. But we have not given up on first-line therapy. Indeed, although we have shut down enrollment in our 106 trial for second-line because we have enough data to power a second-line pivotal trial, we are continuing to enroll first-line therapy patients so that we will eventually have enough data to power a first-line study, because that will be our second phase three study.
Paul Wang: Proved and indicated for that and that is the FDA definition of an on met medical need which lowers the bar dramatically as far as patient numbers trial design and the like.
Paul Wang: Recognizing that that's the easiest quickest way to an approvable NDA, that's where we're going first but we have not given up on first line therapy and indeed, although we have shutdown enrollment in our 106 trial for second line, because we have enough data to power a second line pivotal trial, we are continue.
Paul Wang: You're going to enroll first line therapy patients. So that we will eventually have enough data to power a first line study because that will be our second.
Paul Wang: <unk> phase III study.
Chad: Okay, awesome. Thanks for taking the questions and congrats again on all the progress. Thanks.
Speaker Change: Okay awesome, thanks for taking the questions and congrats again on all the progress.
Speaker Change: Thanks, Chad.
Operator: Thank you. Our next questions come from the line of Vernon Bernardino with HC Wainwright. Please proceed with your question.
Speaker Change: Thank you our next questions come from the line of Vernon Bernardino with H C. Wainwright. Please proceed with your questions.
Vernon Tolentino Bernardino: Hi everyone. Thanks for taking my question and congratulations on the progress as well. So, given the date, today's date, and the milestones we expect to see in the first half of this year, obviously, other than announcing the conclusion and then having an EOP meeting with FDA, what can we expect as far as additional results from the MD-106 trial and as well as the end of phase two meeting? And do you anticipate announcing what you're going to announce with MD-106 before the end of phase two meeting? at the end of the Phase 2 meeting, or will you actually also announce perhaps some details of the discussion with the FDA? Thanks.
Vernon Tolentino Bernardino: Hi, everyone. Thanks.
Vernon Tolentino Bernardino: Taking my question and congrats on the progress as well.
Vernon Tolentino Bernardino: So.
Vernon Tolentino Bernardino: The date.
Vernon Tolentino Bernardino: Today's date.
Vernon Tolentino Bernardino: The milestones or where you expect to see first half of this year.
Vernon Tolentino Bernardino: Obviously other than.
Vernon Tolentino Bernardino: And I think the conclusion and then having conducted.
Vernon Tolentino Bernardino: Going with the FDA.
Vernon Tolentino Bernardino: Well, what can we expect as far as additional results from the Embraer 100 <unk> trial.
And as well as the end of phase two meeting and do you anticipate.
Vernon Tolentino Bernardino: I'm, saying.
Vernon Tolentino Bernardino: What you're going to announce with that'd be one of six before.
Vernon Tolentino Bernardino: The end of Phase II meeting.
Vernon Tolentino Bernardino: <unk>.
Vernon Tolentino Bernardino: Having conducted the phase two or were you just announced the end of phase II meeting or will you actually also announce perhaps.
Some of them.
Vernon Tolentino Bernardino: So the discussion with FDA.
Vernon Tolentino Bernardino: Thanks.
Walter V. Klemp: Sure. You know, John, you're the kind of keeper of important dates and announcements. Let me, let me hand this off to you so you can kind of navigate.
Sure.
Speaker Change: John you're the you're the kind of the keeper of.
John Paul Waymack: Important dates and announcements let me let me hand this off to you see you can go to navigate this.
Jonathan P. Foster: Hey, Vernon. Hey, we're not going to announce when we're having the meeting. We're staying true with what we said earlier. We will have it by the end of June. We don't want to give this specific date out just because we don't want people calling around that date, be quite honest. And we'll have feedback in early, early Q3. And we'll share that with the public, and we're very excited about the potential for that feedback. And so we're, you know, as we said before, we think long and hard about our key events, and we try to be conservative.
John Paul Waymack: Sure.
Hey, Brian Hey.
John Paul Waymack: We're not going to announce.
John Paul Waymack: When we're having the meeting virtually and through with what we've said earlier, we will have it by the end of the.
Speaker Change: By the end of June.
Speaker Change: We don't want to give the specific data out just this.
Speaker Change: Just because we don't want people, calling around that date and bugging us.
Speaker Change: Quite on us.
Speaker Change: And we will have feedback and early early Q3, and we'll share that with the public.
And we're very excited about that potential what that feedback is.
Speaker Change: And so.
Speaker Change: As we've.
Speaker Change: <unk> said before we think long and hard about our.
Speaker Change:
Speaker Change: Key key events, and we try to be conservative and be sure we got it.
Speaker Change: Make those and we're going to make those two days.
Walter V. Klemp: I think it's important to add, because you asked about the MD-106 trial, yes, it's ongoing. But I think it's unlikely given the time span between now and when the FDA meeting will occur. I think it's relatively unlikely that we'll have additional MB-106 data to release between now and then. It's not impossible, but it's probably not likely.
Speaker Change: I think it should be.
Speaker Change: It's important to add because you did ask about the N. B 106 trial, yes, it's ongoing.
Speaker Change:
Speaker Change: It is I think it's unlikely given the time.
Speaker Change: Spanned between now and when the FDA meeting will occur I think it's relatively unlikely that we'll have additional MB one of six data to release between now and then.
Not impossible, but it it's probably not likely.
Jonathan P. Foster: Yeah, we'll probably announce and give an update on MB106 for first-line patients in August with our quarterly earnings. Okay, thanks.
Speaker Change: It will probably announce it.
Speaker Change: Given update of MB, what I was six on the first line patients.
Speaker Change: In August with our quarterly earnings.
Vernon Tolentino Bernardino: Okay, thanks for that fine detail. I appreciate it.
Speaker Change: Okay. Thanks for that fine detail appreciate it.
Speaker Change: Yes.
Operator: Thank you. We have reached the end of our question and answer session, and with that, that does conclude today's teleconference. We appreciate your participation. You may disconnect at this time and enjoy the rest of your day.
Speaker Change: Thank you we have reached the end of our question and answer session and with that that does conclude today's teleconference. We appreciate your participation you may disconnect at this time and enjoy the rest of your day.
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