Q3 2024 Moleculin Biotech Inc Earnings Call
Emily Beynon: © transcript Emily Beynon Greetings, and welcome to the Moleculin Biotech quarterly update conference call and webcast. At this time, all participants are in a listen-only mode. If anyone should require operator assistance, please press star zero on your telephone keypad.
Greetings and welcome to the electrical biotech quarterly update conference call and webcast. At this time all participants are in a listen only mode. If anyone should require operator assistance. Please press star zero on your telephone keypad.
Operator: A question and answer session will follow the formal presentation. You may be placed into question queue at any time by pressing star 1 on your telephone keypad. As a reminder, this conference is being recorded.
A question and answer session will follow the formal presentation.
You may be placed in the question queue at any time by pressing star one on your telephone keypad. As a reminder, this conference is being recorded.
Jenene Thomas: It's now my pleasure to introduce your host, Jenene Thomas, Investor Relations.
Speaker Change: Now my pleasure to introduce your host Janine Thomas Investor Relations. Please go ahead your name.
Jenene Thomas: Please go ahead, Jenene.
Janine Thomas: Thank you Kevin Good morning, and welcome everyone. At this time I would like to remind our listeners that remarks made during this webcast may state managements intentions beliefs expectations or future protection. These are forward looking statements and involve risks and uncertainties forward looking statements. On this call are made Christy I think the safe Harbor provisions under Federal Securities Law.
Unknown Executive: Thank you, Kevin.
Unknown Executive: Good morning and welcome, everyone. At this time, I would like to remind our listeners that remarks made during this webcast may state management's intentions, beliefs, expectations, or future projections. These are forward-looking statements 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. 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.
Janine Thomas: And based 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 these contemplated by such forward looking statements are discussed in the periodic reports Lucky one files with the securities and exchange commit.
Janine Thomas: These documents are available in the investors section of the company's website and on the Securities and exchange Commission's website.
Unknown Executive: These documents are available in the investor section of the company's website and on the Securities and Exchange Commission's website.
Unknown Executive: We encourage you to review these documents carefully. Additionally, certain information contained in this webcast relates to or is based on studies, publications, surveys, and other data obtained from third-party sources and the company's own estimates and research. While the company believes these third-party sources to be reliable as of the date of this presentation, it does not independently verify and makes no representation as to the adequacy, fairness, accuracy, or completeness of that any independent source or verified any information obtained from third-party source. Any data discussed regarding clinical trials and progress are considered preliminary and subject to change.
Janine Thomas: Heard you to review these documents carefully. Additionally, certain information contained in the webcast relates to was based on studies publications journeys. Another data obtained from third party sources and the company's own estimate the 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.
Janine Thomas: As to the adequacy fairness accuracy or completeness Oh.
Janine Thomas: That any independent Georgia, there, but any information obtained from third party source any data discussed regarding clinical trials in progress are considered preliminary and subject to change. This morning, joining on our call from molecular and his leadership team are Walter Smith, Chairman and Chief Executive Officer, Dr. John Paul Me Matt.
Jenene Thomas: This morning, joining us on our call from the Moleculin's leadership team are Walter Klempp, Chairman and Chief Executive Officer, Dr. John Paul Rehmack, Senior Chief Medical Officer, and Jonathan Foster, Executive Vice President and Chief Financial Officer.
Senior Chief Medical Officer, and Jonathan Foster Executive Vice President and Chief Financial Officer, I would now like to turn the call over to Mr. Clinton Walid. Please proceed.
Walter Klemp: I would now like to turn the call over to Mr. Klempp.
Walter Klemp: Wally, please proceed. Thank you, Jenene. Well, investors who've been following our presentations are not new to this, but we are resolute in our belief that our current market cap is nowhere close to reflecting the value of a phase three company like Moleculin, especially in light of how much risk we believe we have removed from the pathway to approval. Ultimately, we believe that just creates more opportunity for investors today. And I'm confident that as our miracle trial unfolds. The magnitude of this opportunity will become more apparent.
Speaker Change: Thank you Janine.
Clinton Walid: Investors who've been following our presentations are not new to this but we are resolute in our belief that our current market cap is nowhere close to reflecting the value of a phase III company like molecular especially in light of how much risk. We believe we have.
Clinton Walid: Moved from the pathway to approval.
Clinton Walid: Ultimately, we believe that just creates more opportunity for investors today, and I'm confident that as our miracle trial unfolds.
Clinton Walid: Gets you to this opportunity will become more apparent.
Walter Klemp: If you're new to Moleculin and asking why this opportunity even exists. We believe that for nearly a decade now, the AML space has been betting on a big payoff from targeted therapies. But the reality is that these new targeted therapies simply haven't delivered. In fact, they've been a big disappointment. And it's evidenced by the fact that venetoclax, which is a non-targeted chemotherapy. has created far more value in the last five years than all of the targeted therapies combined in AMS. Now, the fact is that anthrocytes. continue to be among the most used and most effective cancer therapies available.
Clinton Walid: If you're new to molecular and asking why is this opportunity even exist.
Clinton Walid: We believe that for nearly a decade now the AML space has been betting on a big pay off from targeted therapies.
Speaker Change: Excuse me.
Speaker Change: But the reality is that these new targeted therapies simply haven't delivered in fact, they've been a big disappointment and.
Speaker Change: And it's evidenced by the fact that they need a class which is a non targeted chemotherapy is.
Speaker Change: Has created far more value in the last five years now all of the targeted therapies combined in anvil.
Now the fact is that Anthracycline <unk> continue to be among the most used and most effective cancer therapies available.
Walter Klemp: They're used in 32% of breast cancers, half of all AML patients. 70% of lymphomas and actually 60% of all childhood cancers.
Speaker Change: They're used in 32% of breast cancers half of all AML patients.
Speaker Change: 70 per cent of lymphomas, and actually 60% all childhood cancers. So if you're looking for a true disruptor opportunity.
Walter Klemp: So if you're looking for a true disrupter opportunity, The Anamycin story deserves your attention. What we believe we have is a safer, more effective anthracycline than has ever been possible. And it's enabling clinicians to treat with higher dosages and for a greater number of cycles than was ever thought feasible. And we aren't just filling an unmet need for more than half of AML patients. We're talking about potential uses far beyond just AML.
Speaker Change: The animation story deserves your attention.
Speaker Change: What we believe we have is a safer more effective anthracycline than has ever been possible and it's enabling clinicians to treat with higher dosages and for a greater number of cycles than was ever thought feasible.
And we aren't just filling an unmet need for more than half of the AML patients. We're talking about potential uses far beyond just a M L.
Walter Klemp: Now, in this presentation, we're focusing just on that latest update. So, if you're new to Moleculin, I urge you to review our online presentations and watch our explanatory videos. With that said, though, just to hit the high spots of the Moleculin opportunity, the key takeaways from this slide are that unlike currently available anthracyclines, anamycin was designed to be 100% non-cardiotoxic. It avoids cross resistance with the leading AML drugs, which means it has the potential to work when the others fail. and Anamycin is patent protected through 2040, which is a remarkably long remaining patent life for a Phase III cancer drug.
Speaker Change: Now in this presentation, we're focusing just on the latest update so if you're new to molecular and I urge you to review our online presentations and watch our explanatory videos.
Speaker Change: With that said, though just to hit the high spots of the molecular and opportunity. The key takeaways from this slide are that unlike currently available Anthracycline animation was designed to be 100% non cardio toxic.
Speaker Change: It avoids cross resistance with the leading AML drugs, which means it has the potential to work when the others fail.
Speaker Change: My son is patent protected through 'twenty 40, which is a remarkably long remaining patent life for a phase III cancer drug.
Speaker Change: And in part because targeted therapies have been such a disappointment.
Walter Klemp: And in part because targeted therapies have been such a disappointment. We still have almost 60% of the AML population without an acceptable treatment option. There is still an incredible unmet need in AML.
Speaker Change: We still have almost 60% of the AML population with out an acceptable treatment options.
There is still an incredible unmet need in AML.
Speaker Change: So let me now ask our senior Chief Medical Officer, Paul what Dr. Paul way back to provide an update on patient data and our startup of the phase III Miracle trial Paul.
John Waymack: So let me now ask our Senior Chief Medical Officer, Dr. Paul Waymack, to provide an update on patient data and our startup of the Phase III Miracle Trial.
John Waymack: Paul. Thank you, Wally. Well, as Wally said, there is an incredible unmet need in AML, and specifically, it is for those patients who either don't respond or quickly relapse after first-line induction therapy. As you can see from our most recent Phase 2 data, this is where anamycin excels. As previously reported, we saw a 50% complete remission rate in these second-line patients. which is more than double the performance you would expect from existing therapies. Since our last update, the bone marrow transplants in subjects with a response have increased to four of the nine patients. This is remarkable for second line patients.
Thank you Wally.
Well as Wally said, there is an incredible unmet need in AML.
Speaker Change: Specifically it is for those patients who either don't respond or quickly relapse. After first line induction therapy.
Speaker Change: As you can see primero, most recent phase two data.
Speaker Change: This is where <unk> excels.
As previously reported we saw a 50% complete remission rate.
Speaker Change: These second line patients.
Speaker Change: Which is more than double the performance you would expect from existing therapies.
Speaker Change: Since our last update.
Speaker Change: The bone marrow transplants in subjects with a response have increased to four of the nine patients.
Speaker Change: This is remarkable for second line patients.
John Waymack: as bone marrow transplants is the key to potentially long-term durability, as you will see in the next slide. And the durability of these responses just keeps getting better. We're now up to a median of eight months and still climbing. In addition, these responses are considered high-quality complete responses by the hematology community, with 78% of them recorded as negative in terms of measurable residual disease. And now with 44% of our responders bridging to a potentially curative bone marrow transplant. Again, for second line subjects, we believe that our durability is shaping up as truly a game changer.
Speaker Change: As bone marrow transplant is the key to potentially long term durability.
Speaker Change: As you will see in the next slide.
Speaker Change: And the durability of these responses just keeps getting better.
Speaker Change: We're now up to a median of eight months and still climbing.
Speaker Change: In addition, these responses are considered high quality complete responses by the hematology community with 78% of them recorded as negative in terms of measurable residual disease.
And now with 44% of our responders bridging.
Speaker Change: Potentially curative bone marrow transplant.
Speaker Change: Again for second line subjects, we believe that our durability shaping up is truly a game changer.
John Waymack: Of course, it's this remarkable response rate that led FDA to encouraging us to use an adaptive trial design for our Phase III Approval Trial, as we call it, the Miracle Trial. For those new to this trial, it begins with a Part A, which is designed to establish an optimum dose for antamycin, and then it expands that dose into additional subjects in Part B. This trial design is responsive to a new FDA initiative called Project Optimist. The purpose of which is to avoid simply defaulting to the maximum tolerated dose and instead seeks a balance between safety, tolerability, and efficacy.
Speaker Change: Of course, it's this remarkable response rate.
Speaker Change: F D a to encouraging us to use an adaptive trial design for phase three approval trial.
Speaker Change: As we call it the Miracle trial.
Speaker Change: For those new to this trial.
Speaker Change: It begins with a party.
Speaker Change: Which is designed to establish an optimum dose randomized soon.
And then it expands that dosing two additional subjects in part B.
Speaker Change: This trial design is responsive to a new FCA initiative called project Optimus.
Speaker Change: The purpose of which is to avoid simply defaulting to the maximum tolerated dose.
Speaker Change: And instead seek a balance between safety Tal.
Speaker Change: Tolerability and efficacy.
John Waymack: It's worth clarifying, though, that we don't view this dose optimization process as resulting in any increased risk in approval risk. To the contrary. The FDA actually specified the two doses they would prefer to see compared as the two doses in the MV106 trial that demonstrated both efficacy and safety. And they're leaving it up to us as the sponsor. to ultimately choose between the 190 milligram per meter square and the 230 milligram per meter square dosing regimen. Also. Our initial PK analysis, that is pharmacokinetic analysis, showed that there is no correlation between area under the curve or concentration maximum and the change from the 190 to the 230 dosing regimen.
It's worth clarifying, though that we don't.
Speaker Change: Do you this dose optimization process is resulting in any increased risk and approval risk.
Speaker Change: To the contrary.
Speaker Change: The FDA actually specified the two doses they would prefer to see compared as.
Speaker Change: As the two doses in the M. B one of those six trial that demonstrated both efficacy and safety.
Speaker Change: And they're leaving it up to us as the sponsor.
Speaker Change: Who ultimately choose between the 190 milligram per meter square.
Speaker Change: And the 230 milligram per meter squared dosing regiments.
Speaker Change: Also.
Speaker Change: Our initial PK analysis that its pharmacokinetic analysis showed that there is no correlation between area under the curve for concentration maximum.
Speaker Change: And the change from the 192, the 230 dosing regiments.
Speaker Change: Or in layman's term.
John Waymack: or in layman's terms, The increase in dosage doesn't appear to increase the amount of drug in circulation. And this corroborates our clinical findings to date as we have seen strong efficacy at both dose levels. So, to be clear, we don't see the optimization process. resulting in any increased risk in this trial. In fact, it's just the opposite. To facilitate the dose selection, the data must be unblinded early, which we believe dramatically reduces risk for our investors.
The increase in dosage doesn't appear to increase the amount of drug in circulation.
Speaker Change: And this cora brakes or clinical findings to date.
Speaker Change: As we have seen strong efficacy at both dose levels.
Speaker Change: So to be clear.
Speaker Change: We don't see the optimization process.
Speaker Change: Resulting in any increased risk in this trial.
In fact, it's just the opposite.
Speaker Change: To facilitate the dose selection the data must be unblinded early which we believe dramatically reduces risk for our investors.
Speaker Change: Yes, that's that's absolutely right Paul remember.
Walter Klemp: Yes, that's that's absolutely right, Paul. Remember, most phase three approval trials leave investors and prospective big pharma partners in the dark for years until the data can finally be unblinded. And our ability to unblind early because of this adaptive design means we won't have to wonder whether our phase 3 trial is tracking with endpoint expectations. And by the way, we're still looking at additional ways to improve early visibility in this trial, so stay tuned for additional updates. Now, this becomes even more meaningful when you look at the end point we need to hit. Look, let's face it, biotech is a high risk business, which is why the potential upside returns can be astronomical.
Speaker Change: Most phase III approval trials leave investors and prospective big pharma partners in the dark for years until the data can finally be unblinded.
Speaker Change: Our ability to unblinded early because of this adaptive design means we won't have to wonder whether our phase III trial is tracking with endpoint expectations.
Speaker Change: And by the way, we're still looking at additional ways to improve early visibility in this trial. So stay tuned for additional updates on this.
Speaker Change: Now this becomes even more meaningful when you look at the endpoint we need to hit.
Speaker Change: Look let's face it biotech is a high risk business, which is why the potential upside returns can be astronomical.
Walter Klemp: In oncology, it's estimated that only about 40% of phase, 45% of phase three trials will succeed. And the vast majority of those that fail, do so because of a lack of ethica. That's why it's so critical for investors to understand just how much we have derisked our phase three trial. The FDA is asking us to compare to one of the few standards of care that is approved for use in second-line patients. It's called high-dose ARA-C or HIDAC. Now, this is great news for us. because the efficacy of HIDAC in this class of patients is well documented and very consistent with a CR rate of around 17 to 18 percent.
In oncology, it's estimated that only about 40% of phase <unk> 45 per cent of phase III trials will succeed and the vast majority of those that fail do so because of a lack of efficacy.
Speaker Change: That's why it's so critical for investors to understand just how much we have derisked our phase III trial.
Speaker Change: The F D. A is asking us to compare to one of the few standards of care that is approved for use in second line patients, it's called high dose Ara C or high Tech.
This is great news for us.
Speaker Change: The efficacy of high Tech in this class of patients is well documented and very consistent with a CR rate of around 17% to 18%.
Speaker Change: That means the performance of an Iraq, that's what we call the combination of anti <unk> plus high deck.
Walter Klemp: That means the performance of ANIRAC. That's what we call the combination of anamycin plus HIDAC. is almost three times greater than HIDAC alone. As a comparison, one of our key opinion leaders in the AML space recently commented that the new drug approvals in AML are justified if the new drug is at least 30% better than the standard of care comparison. Well, by this standard, we are over 280% better. But there is likely less risk than even this massive disparity in performance suggests. That's because of how HIDAC was measured in these prior large studies. In the MIROS study you see on the left, patients were allowed two cycles of treatment in order to reach a CR, and in the CLASSIC-1 trial, they were allowed even more, up to 120 days of treatment before reaching their end point.
Speaker Change: Is almost three times greater than hijack alone.
Speaker Change: As a comparison.
One of our key opinion leaders in the AML space recently commented that the new drug approvals in AML are justified.
Speaker Change: If the new drug is at least 30% better than the standard of care comparison well.
Speaker Change: Well by this standard we are over 280% better.
Speaker Change: But there is likely less risk than even this massive disparity in performance suggests.
Speaker Change: That's because of how high that was measured in these prior large studies.
Speaker Change: In the mirror marrow study you see on the left patients were allowed two cycles of treatment in order to reach a CR and in the classic one trial. They were allowed even more up to 120 days of treatment before reaching their end point.
Walter Klemp: In contrast, our CRs were accomplished in less than 49 days with just one cycle of treatment. What this means is that the performance delta between test and control could be even greater than we're predicting. So now let's look at the potential impact this endpoint could have on the timing of approval.
Speaker Change: In contrast, our see ours were accomplished in less than 49 days with just one cycle of treatment.
Speaker Change: What this means is that the performance delta between test and control.
Speaker Change: Could be even greater than we're predicting.
Speaker Change: So now let's look at the potential impact this endpoint could have on the timing of approval and let me caveat. This is not the plan is just to look at some potential upside.
Walter Klemp: And let me caveat, this is not the plan, it's just a look at some potential upside. We had an investor recently challenge us on our trial design. Now, he had a decent understanding of statistics and said, if your performance is expected to be so much better than HIDAC, why do you have 330 patients in the total trial? Shouldn't you be able to achieve statistical significance with closer to 100 patients? The answer is that this is what Big Pharma has asked us to do. In our discussions with prospective partners, we have heard more than once that these players have been burned by buying into a phase three trial, only to end up having the trial miss its endpoint because they didn't have sufficient subjects to power the trial, because the delta between test and control ended up being closer than management estimated.
Speaker Change: We had an investor recently challenge us on our trial design now he had a decent understanding of statistics and said if your performance is expected to be so much better than hijack why do you have 330 patients in the total trial shouldn't you be able to achieve statistical significance with closer to.
Speaker Change: 100 patients.
Speaker Change: The answer is that this is what big pharma has asked us to do.
Speaker Change: In our discussions with prospective partners, we have heard more than once that these players have been burned by buying into a phase III trial only to end up having the trial missed its endpoint because they didn't have sufficient subjects to power the trial because the delta between test and control ended up being.
Closer than management estimated.
Walter Klemp: In essence, Small biotech teams facing tight budgets and timelines get lured into overly optimistic assumptions that result in underpowered studies. Big Pharma would much rather buy into a longer, more expensive study that they believe has a higher likelihood of success, and that's what we've tried to do here. But what happens if our numbers play out closer to what history? What if, at the unblinding of 90 patients, we're really outperforming HIDAC by 280 percent? Well, under those circumstances. Assuming drug safety is also in line with our experience to date, it's very likely that our independent data monitoring committee could conclude that continuation of the control arm of the trial would be considered unethical.
Speaker Change: In essence.
Speaker Change: Small biotech teams facing tight budgets and time lines get lured into overly optimistic assumptions that result in under powered studies.
Speaker Change: Big pharma would much rather buy into a longer more expensive study that they believe has a higher likelihood of success and that's what we've tried to do here.
Speaker Change: But what happens if our numbers play out closer to what history suggests what if at the unblinded of 90 patients, we're really outperforming hijacked by 280%.
Speaker Change: Well under those circumstances.
Speaker Change: Assuming drug safety is also in line with our experience to date, it's very likely that our independent data monitoring committee could conclude that continuation of the control arm of the trial would be considered unethical.
Walter Klemp: And at that point, we would likely request a Type A meeting with the FDA to discuss converting Part B of our trial into a smaller, single-arm study designed to complete the safety analysis and satisfy DEI requirements. Essentially, it could take a year or more off of the approval timeline and virtually eliminate any remaining efficacy-related approval risk.
Speaker Change: And at that point, we would likely request a type a meeting with the FDA to discuss converting part b of our trial into a smaller single arm does this study designed to complete the safety analysis and satisfy dei requirements essentially it could take a year or more off of.
Speaker Change: The approval timeline and virtually eliminate any remaining efficacy related approval risk now in no way are we asking investors to plan on this but we want to make sure you understand how dramatic the upside could each year.
Walter Klemp: Now, in no way are we asking investors to plan on this, but we want to make sure you understand how dramatic the upside could be. What we are saying is if you want something to worry about regarding moleculin, it shouldn't be the traditional efficacy risk associated with most phase three trials.
What we are saying is if you want something to worry about regarding molecular and it shouldn't be the traditional efficacy risk associated with most phase III trials.
Speaker Change: Our biggest focus right now needs to be on recruitment.
Walter Klemp: Our biggest focus right now needs to be on recruitment. because the pace of recruitment is going to drive our data milestones. We are in a race to open sites and start recruiting patients just as quickly as we can to ensure that we get to the interim data readouts that everybody wants to see. To date, we have 60 sites interested and 17 more sites we're targeting. And you can see by this map that this is happening on a global scale. But Paul and I are committed to ensuring these sites are engaged and productive. To that end, we are actively, physically visiting any of these sites that we think could be big producers to make sure their facilities and systems are up to the task.
Speaker Change: Because the pace of recruitment is going to drive our data milestones.
Speaker Change: We are in a race to open sites and start recruiting patients just as quickly as we can.
Speaker Change: To ensure that we get to the interim data readouts that everybody wants to see.
Speaker Change: To date, we have 60 sites interested and 17 more sites, we're targeting and you can see by this map, but this is happening on a global scale.
Speaker Change: But Paul and I are committed to ensuring these sites are engaged and productive.
To that end, we are actively physically visiting any of these sites that we think could be big producers to make sure their facilities and systems are up to the task.
John Waymack: and that the principal investigators understand the science and the protocol and are truly bought in to the importance of this trial. It takes a lot of effort to meet face-to-face with every one of these investigators, but we believe it will pay off in terms of delivering the data readouts.
Speaker Change: And that the principal investigators understand the science and the protocol and are truly bought in to the importance of this trial.
Speaker Change: It takes a lot of effort to meet face to face with every one of these investigators.
But we believe it will pay off in terms of hardwood line. The the data Readouts Wally hold on I know youre going to Youre going to skip this part, but I'm sorry to interrupt.
John Waymack: Wally, hold on. I know you were going to skip this part, but I'm sorry to interrupt. Look, I got to point out to everybody on this call, what you and Paul did the last few weeks. I know I know you weren't going to do it, but look, they believe in animizing so much they went into a country at war. and another where they were experiencing riots, war and riots, Ukraine and Georgia. Wally and Paul spent two nights in a bomb shelter in Keeve, just to be able to meet the investigators face to face. They went from there to Tbilisi, right in the middle of the rioting in the streets, I think over the contested presidential election.
Speaker Change: I got to point out to everybody on this call what you wouldn't fall did the last few weeks.
Speaker Change: I know I know you weren't going to do it but what.
Speaker Change: They believe in antibodies and so much they went into a country at war.
Speaker Change: And another where their experience and riots warned riots, Ukraine, and Georgia, Wally and Paul spent two nights in a bomb shelter and Keith.
Just to be able to meet the investigators face to face.
Speaker Change: They went from there to believe see right in the middle of the writing in the street. So I think over the contested presidential election, but I ask the analysts and the people on this line how many senior management teams do you know.
Walter Klemp: But I ask the analysts and the people on this line, how many senior management teams do you know that would do this all at their own personal risk to ensure the success of a cancer drug? Think about it. Sorry, Wally. Thanks, John.
Speaker Change: That would do this all up in her own personal risk to ensure the success of our cancer drugs think about alright, well.
Speaker Change: [laughter], Thanks, John well. The fact is my wife wasn't very happy about it.
Walter Klemp: Well, the fact is my wife wasn't very happy about it. And look, maybe it was a little extreme, but... But as you said, John, we believe deeply in antamycin, and we are all committed to doing what has to be done to get this drug approved. This is a fight worth winning, and we believe we're going to win. Now, we've been focusing 100% on AML today, but we should never forget that antamycin has potential applications far beyond AML. In fact, the growth potential is probably in the range of 20 times that which would come just from AML.
Speaker Change: And look maybe it was a little extreme but.
Speaker Change: But as you said, Jon we believe deeply in animation and we are all committed to doing what has to be done to get this drug approved this is a fight worth winning.
Speaker Change: And we believe we're going to win.
Speaker Change: Now we've been focusing 100% on AML today, but we should never forget the animation has potential applications far beyond AML. In fact, the growth potential is probably in the range of 20 times that which would come just from AML and successful drugs in the AML space.
Walter Klemp: And successful drugs in the AML space are often valued in the billions.
Speaker Change: Are often valued in the billions.
Jonathan Foster: So John, you know, let's go back to you and ask you to wrap things up here with the review of the financial situation. Sure, Wally. We ended the quarter with $9.4 million in cash on hand, enough to reach into Q1 of 2025. Using our fully diluted shares outstanding, which includes the pre-funded warrants, our market cap is roughly $15.9 million. Our stock has about 40,000 shares traded on average each day.
Speaker Change: So John you know what.
Speaker Change: Let's let's go back to you and ask you to wrap things up here with a review of the financial situations.
Speaker Change: Sure Wally.
Speaker Change: We ended the quarter with $9 $4 million in cash on hand enough to reach into Q1 of 2025, using our fully diluted shares outstanding which includes the pre funded warrants or market cap.
Speaker Change: Is roughly $15.9 million our stock has about 40000 shares traded on average each day.
But I really got to go back to the Miracle chart, where we have some key inflection points coming and is why we said what he said where we're looking to add more.
Jonathan Foster: So we got to go back to the miracle chart where we have some key inflection points coming. And as Wally said, we're looking to add more. Shown on the scant chart, let's discuss the key milestones in our plan. First of all, a look for more information on contracting and recruitment of sites later this year. And then the first subject treated in Miracle should occur in the first quarter of 2025. Then we'll have a look at the overall CR rate and recruitment update in the second half of 2025. This should allow us to interpret the CR rate on possible sets of the trial north of 20-25% given the historical CR rate of HIDAC as Wally mentioned.
Speaker Change: Jonathan Gantt chart, let's discuss the key milestones in our plan first of all.
Speaker Change: So look for more information on contracting and recruitment of sites later this year.
Speaker Change: And then the first subject treated a mer miracle should occur in the first quarter 2025.
Speaker Change: Then we'll have a look at the overall CR rate and recruitment update in the second half of 2025. This should allow us to interpret the CR rate on possible assess what that trial north of 20, 25% given the historical CR rate of buyback is why we mentioned.
Jonathan Foster: should indicate the efficacy of antimicin as it were. It'll take us approximately $50 million to get to this point. Then, the big data readout in mid-2026, interim primary efficacy and safety data on the first 75-90 pages. That readout, in my opinion, will really show people the possibility and the risk associated with the success of this trial. This should, I'm sorry, mid 2026 is is the interim data readout. And then that, you know, that cascades into a lot of action, as we finish Part B, and we start enrollment of Miracle 2. for third-line subjects, and then in 2028, we have the primary efficacy data point for second-line subjects.
Speaker Change: Would indicate the efficacy of animation as it worked well.
Speaker Change: Approximately $15 million to get to this point.
Speaker Change: Then the big data read out in mid 2026 interim primary efficacy and safety data on the first 75 to 90 patients.
Speaker Change: That readout in my opinion will really show people, the the possibility and the risk associated with the success of the trial.
Speaker Change: This should I'm, sorry mid 2026.
Speaker Change: The interim data readout and then.
Speaker Change: You know that cascades into a lot of action as we finished part b and we we start enrollment of Miracle too.
Speaker Change: For third line subjects and then in 'twenty 28, we have the primary efficacy data point for second line subjects and having that final primary efficacy data for the second line subjects will allow us in the second half of 2028.
Jonathan Foster: And having that final primary efficacy data for those second line subjects will allow us in the second half of 2028 to begin submission of a rolling NDA for the treatment of relapsed refractory for accelerated approval on the primary endpoint of CR from this miracle trial.
Speaker Change: To begin submission of a rolling NDA for the treatment of relapsed refractory for accelerate approval on the primary endpoint of CR from this miracle trial.
Speaker Change: So to conclude as Wally has already described the Miracle trial is unlike any other phase III trials, but I know it is substantially derisked and provides many informative key data points along the way.
Jonathan Foster: So to conclude, as Wally has already described, the MIRACLE trial is unlike any other phase three trial that I know of. It is substantially de-risked and provides many informative key data points along the way. And we're looking to improve that visibility, as Wally mentioned.
Speaker Change: And we're looking to improve that visibility as Wally mentioned Wally.
Walter Klemp: Wally? Yeah, yeah, thanks, John.
Wally: Yeah, Yeah. Thanks, John.
Jenene Thomas: Before we conclude, let's see if we can address questions from the analyst community.
Speaker Change: Before we conclude let let's see if we can address questions from the analyst community gene Jeanine.
Jenene Thomas: Jenene? Great.
Kevin can you. Please open up for Q&A, certainly will not be conducting a question and answer session. If you'd like to be placed in the question queue. 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 he would like to remove your question.
Operator: Kevin, can you please open up for Q&A? Certainly. We'll now be conducting a question and answer session.
Operator: If you'd like to be placed in the question queue, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1.
Speaker Change: From the Q4.
Speaker Change: For participants using speaker equipment, it may be necessary to pick up your handset before pressing star one one moment. Please hold your poll for questions. Our first question today is coming from Jonathan Aschoff from Ralph Your line is that life.
Operator: One moment please while we poll for questions.
Jonathan Aschoff: Our first question today is coming from Jonathan Aschoff from Royalty Line is now live. Thank you. Good morning, guys. And I have four questions for you. The first is, you last, hey there, you last reported a median OS of greater than or equal to six months in 10 second-line patients, but I don't see an updated number there.
Speaker Change: Oh. Thank you good morning, guys and I have four questions for you. The first is John you that hey, there.
Speaker Change: You are last reported a median OS of greater than or equal to six months and 10 second line patients, but I don't see an updated number there is there any update to that.
John Waymack: Is there any update to that median OS currently?
Speaker Change: You know esque currently.
John Waymack: Yeah, so Paul, do you want to just re-summarize what's in the swimmers chart, because we've made a lot of progress since that last report. Our overall median survival now is over seven months in this population, which again is far greater by almost a factor of two than what the literature would suggest. Yeah. Yeah, it's a highly conservative trial, I think, given what you have to hurdle. I think it's well-designed, yeah, a miracle trial.
Speaker Change: Yes. So so so Paul do you want to summer just re summarize what's in the swimmers chart.
Speaker Change: Because we've made a lot of progress since that last that last report.
Speaker Change: Our overall median survival now has over seven months.
Speaker Change: In this population, which again is far greater.
Speaker Change: By almost a factor to them what the literature would suggest.
Speaker Change: We predict yeah, yeah, yeah, it's a highly conservative trial, I think giving what you have to hurdle I think it's well designed a miracle trial anyway, So why wouldn't miracle enrollment bumped and maybe you've explained this before in a different for them you know from from 40 to 45 for the first look you said 75.
Jonathan Aschoff: Anyway, so why was miracle enrollment bumped? And maybe you've explained this before in a different forum, you know, from 40 to 45. First look, you said 75 before, but now you're saying, you know, 90, like the 10Q says 90, the PR says 75 to 90. And then I had in a prior note that after that, when you determine the optimal dose, I had 120 and, you know, 120 is now 240 to be enrolled. And I'm just kind of curious, you know, what specifically led to that increase at all three of those levels.
Before but now you're saying.
Speaker Change: 90, like the 10-Q says 90 the P. R. C 75 to 90, and then I had in the prior note that after that.
Speaker Change: When you determine the optimal dose I had 120 and you know 120th now 240 <unk>.
Speaker Change: To be enrolled and I'm just kind of curious you know what specifically led to that increase at all three of those looks.
Speaker Change: Yes, there's I think there's several fat.
John Waymack: Yeah, there's I think there's several factors at work here.
Speaker Change: Factors at work here, let me start backwards and say that the issue about $1 20 versus 240, I think has to do with the specific paragraph descriptions it's always been.
John Waymack: Let me start backwards and say that the issue about 120 versus 240, I think has to do with the specific paragraph descriptions. It's always been 120 per treatment arm, but we're always afraid that people will read that as 120 in total, so we've tended to default to describing it as 240. So we haven't doubled the size of the trial, we've just made sure that people aren't being misled between 120 per treatment arm and 240 in total for part B. So that's what's going on there.
121, 20 per treatment arm, but were always afraid that people will read that as 120 in total so we've tended to default to describing it as 240. So it's we're not we haven't increased we haven't doubled the size of the trial. We've just made sure that people arent.
Speaker Change: Being misled between 120 per treatment arm and 240 in total for the for part B. So that's that's what's going on there.
John Waymack: As it relates to the number in part A, it has been moving around. And part of what's been moving it around is optimizing statistics. One of the things that, I mean, the reality is, In order to, I mean, you know this, Jonathan, global clinical trials like this are extremely complex. When you've got 60 to 90 treatment sites and on six different continents, it gets complicated fast. And so you can get buried in all the startup requirements because every one of those hospitals has to have a contract negotiated. There's ethics review boards. There's a lot of lead time.
Speaker Change: As it relates to the to the number in part a it has been moving around and in part of what's been moving it around is optimizing statistics.
Speaker Change: One of the things that I.
Speaker Change: The reality is.
Speaker Change:
Speaker Change: In order to I mean, you know this Jonathan global clinical trials like this are extremely calm complex. When you got 60 to 90 treatment sites and on six different continents. It gets complicated fast and and so you can get buried in all of the startup requirements because every.
Speaker Change: One of those hospitals has to have a contract negotiated there's ethics review boards.
Speaker Change: It gets there is a lot of lead time and so in none of those processes can happen until you have until you put a stake in the grant and say here's our protocol.
John Waymack: And so none of those processes can happen until you have, until you put a stake in the grand state. Here's our protocol. Well, the biostatistics analysis goes on and on and on for a long time, because there's a lot of refinement in what if analysis, but we didn't want to wait for all of that what if analysis in order to get start to get the the contracting and ethics reviews started. And so we put a stake in the ground and said, this is good enough for now, but we'll continue to refine the actual numbers of the trial as we get closer to the starting line.
Speaker Change: Well the the bio statistics analysis goes on and on and on for a long time, because theres a lot of refinement and what if analysis, but we didn't want to wait for all of that what if analysis in order to get start to get to the contracting and ethics reviews started and so we put a stay.
Speaker Change: On the ground and said this is good enough for now, but we'll continue to refine the actual numbers in the trial as we get closer to the starting line, so and and and and that's still that work is still ongoing so we could have some minor tweaks.
John Waymack: So, and that's still, that work is still ongoing. So we could have some minor tweaks as this gets closer to the start. But if anything right now, and we kind of embedded this in the presentation, we're expecting that if anything, we've got, we may have some opportunities for even earlier visibility than is currently expected. So just stay tuned as we get that completely refined.
Speaker Change: As as this gets closer to the start.
Speaker Change: But if anything right now and it's yet and we kind of embedded this in the presentation.
Speaker Change: We're expecting that if anything we've got we may have some opportunities for even earlier visibility than is currently expected. So just just stay tuned as we get that completely refined.
Jonathan Aschoff: Yeah, it's definitely wise to do everything you can to not, you know, swing and miss at that accelerated approval. Absolutely. A lot of lead time, more than waiting for Q40.
Speaker Change: Yeah, it's definitely wise to do everything you can to not swing and Miss it that accelerated approval opportunity. It's absolutely a lot of lead time, you have more than waiting for Q4 are the last one is just I mean, the third one's a little nitpicky.
Jonathan Foster: The last one, I mean the third one is a little nitpicky, is the 3Q24 R&D, is that a new run rate or does that include a lumpy slug of anamycin production?
Speaker Change: It is the <unk> 24, R&D is that a new run rate or does that include a lumpy slug of that in mice in production.
Speaker Change: I'm going to lateral that Amazon so.
Jonathan Foster: I'm going to let her one on one. Yeah, yeah, sorry to jump in there. But, um, yeah, that was a slug of Anamycin production, as well as some sponsored research really accelerated at MD Anderson, we've had some additional programs going on there. So we we accelerated some sponsored Okay, and John, again, what's the what is the number of shares from prepaid warrants that's not in your 3 million November one share count? And I was kind of curious, roughly two Okay, and then the last part of that is why is that 3 million November one count so much lower than the average weighted for the third quarter?
Speaker Change: Yeah, Yeah, sorry to jump in there, but yeah that was a slug of antibodies and production as well as some sponsored research with accelerated at and M. D. Anderson.
Speaker Change: Some additional programs going on there. So we are we accelerated some sponsored research there as well.
Speaker Change: And then John again, what's the what is the number of shares from prepaid warrants that's not in your 3 million November one share count rough and I was kind of curious roughly two okay. And then the last part of that is why is that 3 million November one count so much lower than the average weighted for the third quarter of three points that.
Jonathan Foster: Well, because the warrants that we issued in August, as part of the August deal, are now... above water, and so they now the warrants count in the fully diluted.
Speaker Change: Because the warrants that we issued in August as part of the August deal are now.
Speaker Change: Above water and so then they now now the warrants counted in the fully diluted basis.
Jonathan Foster: Okay, that's all.
Okay. That's all thank you guys.
Speaker Change: Sure. Thank you Jonathan take care.
Unknown Executive: Sure.
Unknown Executive: Thank you, Jonathan.
Unknown Executive: Take care.
Speaker Change: Thank you as a reminder, that star one to be placed into question queue. Our next question is coming from Jason Mccarthy from Maxim Group. Your line is that life.
Unknown Executive: Thank you.
Operator: As a reminder, that's star one to be placed into question Q.
Jason Mccarthy: Our next question is coming from Jason McCarthy from Maxim Group. Your line is now live. Hi guys, thanks for taking the questions and congrats on the progress.
Speaker Change: Hi, guys. Thanks for taking my questions and congrats on the progress.
Unknown Executive: Hey, thanks, Jen.
Speaker Change: Hey, Thanks, Yeah.
John Waymack: Yeah, I was just wondering, how much do you expect the phase three to John, you want to tackle that? I'm afraid you're going to do that. Well, as Wally mentioned, even going into the recruitment, the number of sites you need for recruitment, you know, you really have to start off with a plan and keep refining it. As you saw on the chart, one of the key things into the cost of the trial is where are we performing the trial. per patient costs in the US are, you know, 10 times or more greater per patient, which you have to pay the institution in which you have an Eastern and Western Europe, I mean, Western Asia, Eastern Europe, Western Asia.
Speaker Change: Yeah I was just wondering how much do you expect the phase three to cost.
Speaker Change: John you want to tackle that.
John: I was afraid you're going to do that well as well.
John:
John: Well as Wally mentioned.
John: Even going into the recruitment the number of sites you need for recruitment.
John: You really have start up with a plan to keep refining it as you saw on the chart I'm one of the key things into the cost of the trials, where we where are we performing the trial her.
John: Her patient costs in the U S or 10 times or more greater per patient would you have to pay the institution than what you have in eastern and Western Europe, Western Asia Eastern Europe Western Asia.
John: I would say a good run rate run.
John: Runway rate is essentially outside of stated earlier.
Speaker Change: You're talking about.
Speaker Change: $15 million per for about every three quarters, you'll have some lumps in there for animation.
Speaker Change: Production.
Speaker Change: And so you just take that 2028, but if we're able to shorten it as Wally mentioned don't have a huge impact. So we're refining those numbers as we refine the sites.
Speaker Change: What areas were going to you'll note.
Speaker Change: We do have south Korea on that map, but really not participating in a lot of sites and the Pacific rim really helps the budget from a standpoint of of having P. R as in that area and and drug.
Speaker Change: Drug inventory in that area as well so.
John Waymack: More visibility as we move forward. Got it.
Speaker Change: A more visibility as we move forward.
Yeah.
Got it and then just as far as the S. T. S programs. So that's likely final data in first half 'twenty five.
Unknown Executive: Um, and then just as far as the STS program, so that's likely final data in first half 25.
Unknown Executive: Moving to a pivotal after but is this something you guys would look forward to doing your own or or seek apart?
Speaker Change: Moving to a pivotal after but is this something you guys would look forward to doing your own ore or seek a partner.
Speaker Change: So [laughter] we've.
John Waymack: So we've. We've really committed to the notion that we would like to find a partner for that project. Obviously, there's enough cost associated with the MIRACLE trial that that's where our focus needs to be in terms of our internal resources.
We.
Speaker Change: We've really committed to the notion that we would like to find a partner for that project.
Obviously, there's enough cost associated with the.
Speaker Change: The Miracle trial that that's where our focus needs to be in terms of our internal resources. So we basically said look any other major undertakings like a N S. T. S. A pivotal trial, we're going to we're going to want to work with an outside funding source maybe in that.
Unknown Executive: So we basically said, look, any other major undertakings like an STS pivotal trial, we're going to want to work with an outside funding source, maybe in that case, an investigator-sponsored trial, that kind of thing. Okay, got it.
Speaker Change: <unk>, an investigator sponsored trial that kind of thing.
Speaker Change: Okay got it thanks for taking my questions.
Unknown Executive: Thanks for taking the questions. Thank you.
Speaker Change: You bet.
Speaker Change: Thank you next question is coming from Vernon Bernardino from H C. Wainwright Your line is that life.
Vernon Bernardino: Next question is coming from Vernon Bernardino from HC Wainwright. Your line is now live. Good morning, Molly and John. Thanks for taking my question.
Good morning.
Molly and John Thanks for taking my question.
Vernon Bernardino: Just wondering, you've never met, hi, you've never mentioned this before, but I was wondering if you have pursued or perhaps intend to pursue discussion with the FDA on a special protocol assessment for the miracle.
Just I've.
Speaker Change: Hi, you've never mentioned this before but I was wondering if you have pursued or perhaps intends to pursue.
Speaker Change: Discussion with the FDA on this special protocol assessment for the medical Journal.
Speaker Change: So.
John Waymack: So we've had a number of discussions about that, but let me hand this over to Paul to talk about our present thinking about special protocol assessment. Thanks for the question. Very insightful. And when we went to the end of Phase 1-2 meeting with FDA, we broached the subject of should we submit a protocol for special protocol assessment. And they advised not to do that. It was a very amicable meeting, and they advised not to do it because it takes time. You have to create the protocol, submit it. There's a review period, discussion period. It adds many months.
Speaker Change: And we've we've had a number of discussions about that but let me let me hand this over to Paul to talk about our our our present thinking about special protocol assessments.
Paul: Thanks for the question very insightful and when we went to the end of phase one two meeting with FDA, we broached the subject.
Speaker Change: Should we submit a protocol for special protocol assessment.
Speaker Change: And they advised not to do that it was a very amicable meeting and they advised not to do it because it takes time.
Speaker Change: You have to create the protocol submitted there was a review periods discussion period. It adds many months and they said they would be more than happy to review it but they recommended not doing it because at the end of the meeting we were all in agreement there were no contentious issues. So the thought was why delaying things for many months when we're in full agreement.
Walter Klemp: And they said they would be more than happy to review it, but they recommended not doing it because at the end of the meeting, we were all in agreement. There were no contentious issues. So the thought was, why delay things for many months when we're in full agreement? I see. So that's a very positive. There's also a factor, Vernon, and you've probably run into this before, but it tends to tie your hands a little bit. Because what, you know, in order for an SPA to be worth anything, to have any real intrinsic value, you cannot deviate from the strict confines of the protocol that's agreed to in that letter.
Speaker Change: Okay. So that's.
Speaker Change: Are very positive.
Speaker Change: There's also there's also a.
Speaker Change: Factor Vernon, you've probably run into this before but it it tends to tie your hands a little bit because what you know in order for an S. P. A to be worth anything to have any real intrinsic value.
Speaker Change: If you can't you cannot deviate from the the strict confines of the protocol that's agreed to in that letter.
Walter Klemp: And so the point Paul was really making was, there's a lot of additional delay and lead time to get to that. And then your hands are kind of tied because essentially anything you want to change in the future negates that SPA. And it's like starting over again. So there are circumstances where an SPA is probably in the very best interest of the company to protect themselves. But like Paul said, We sort of feel like we've got the FDA on our side here in terms of the trial design and how to get to approval, and so it just did not appear to be worth both the lead time and then the risk that if you want to tweak the protocol along the way, you've got a problem.
Speaker Change: And and so at the point, Paul was really making was there's a lot of.
Speaker Change: Additional.
Speaker Change: Delay and lead time to get to that and then your hands are kind of tied because.
Speaker Change: They essentially anything you want to change and the teacher negates that S. P. A and it's like starting over again so.
Speaker Change: But there are circumstances, where an S. P. A is probably in the very best interest of the company to protect themselves, but like Paul said.
Speaker Change: Well you know we sort of feel like we've we've got the F. D. A on our side here in terms of.
Speaker Change: The trial design and how to get to approval and so.
Speaker Change: It just it just did not appear to be worth both the lead time and then the risk that if you want to tweak the protocol you know.
Speaker Change: Along the way you've got a problem.
Speaker Change: Okay. Thank you I appreciate the additional insight into the phase III trial design process.
Vernon Bernardino: Okay, thank you.
Unknown Executive: I appreciate the additional insight into the phase three trial design process. You bet.
Speaker Change: You bet.
Speaker Change: Jeanine other questions. Thank you we've reached the end of our question and answer session I'd like to turn the floor back over for any further or closing comments.
Jenene Thomas: Jenene, other questions? Thank you.
Unknown Executive: We've reached the end of our question and answer session.
Walter Klemp: I'd like to turn the floor back over for any further or closing comments. Well, I, you know, I appreciate everybody making time for an update on Moleculin. I'd just like to leave you with this. AML drugs that are close to approval have consistently been valued in the billions of dollars. And we believe the only rational reasons to be bearish about an asset like anamycin that's in phase three are that A, you doubt the ability to hit the end point. B, you doubt the likelihood of approval if that endpoint is hit. or C, you doubt the marketability of the drug once it's approved.
Speaker Change: Well you know I.
Speaker Change: I appreciate everybody, making time for an update on molecular.
I just like to leave you with this.
Speaker Change: And all drugs that are close to approval have consistently been valued in the billions of dollars.
And we believe the only rational reasons to be bearish about an asset like antibody that's in phase III or that.
Speaker Change: Hey, you doubt the ability to hit the endpoint.
Speaker Change: B you doubt the likelihood of approval if that endpoint is hit.
Speaker Change: Or see you doubt the marketability of the drug once it's approved.
Speaker Change: What we've shown you the data that explains why we believe with a very high degree of confidence that we will hit the endpoint of this trial.
Walter Klemp: Well, we've shown you the data that explains why we believe with a very high degree of confidence that we will hit the endpoint of this trial. And we've explained that this is the endpoint that the FDA has requested for approval. And we have KOLs on record saying that just a fraction of our expected performance should be sufficient for approval. And finally, I can tell you without reservation that every single investigator we've met with, and we're now well into the dozens, has agreed that antamycin has the potential to fill a desperate, unmet need for AML patients.
Speaker Change: And we've explained that this is the endpoint that the FDA has requested for approval and we have kols on record, saying that just a fraction of our expected performance should be sufficient for approval.
Speaker Change: And finally I can tell you without reservation that every single investigator, we've met with and we're now well into the dozens has agreed that animation has the potential to fill a desperate unmet need for AML patients and to be clear they've all said they would expect to use it extensively in their practice.
Walter Klemp: And to be clear, they've all said they would expect to use it extensively in their practice. We simply need to execute on our strategy and that's exactly what we're doing. I can't wait for the next update. In the meantime, have a great one. Thank you.
Speaker Change: We simply need to execute on our strategy and that's that's exactly what we're doing.
Speaker Change: I can't wait for the next update in the meantime have a great week.
Speaker Change: Thank you that does conclude today's teleconference and webcast.
Unknown Executive: That does conclude today's teleconference and webcast.
Unknown Executive: You may disconnect your line at this time and have a wonderful day. We thank you for your participation today.
Speaker Change: Disconnect. Your line at this time and have a wonderful day.
Thank you for your participation today.
Speaker Change: Yeah.