Moleculin Biotech, Inc. (NASDAQ:MBRX) Q4 2023 Earnings Call Transcript
Moleculin Biotech, Inc. (NASDAQ:MBRX) Q4 2023 Earnings Call Transcript March 25, 2024
Moleculin Biotech, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings, welcome to the Moleculin Biotech 2023 Year-End Conference Call and Webcast. [Operator Instructions] Please note, that this conference is being recorded. I'd now turn the conference over to Jenene Thomas, Investor Relations. Thank you. You may begin.
Jenene Thomas: Thank you, Gerald. 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.
These documents are available in the Investors section of the company's website and on the Securities and Exchange Commission's website. We encourage you to review these documents carefully. Additionally, certain information contained in this webcast relates to or is based on studies, publications, surveys and other data obtained from third-party sources and the company's own estimates and research. While the company 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 or that any independent source of verified any information obtained from third party source. Any data discussed regarding clinical trials and progress are considered preliminary and subject to change.
Joining us on the call from Moleculin's leadership team are Walter Klemp, 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 Klemp, Chairman and CEO. Wally, please proceed.
Walter Klemp: Thanks, Jenene, and welcome, everyone, to our year-end recap and pipeline update. We have some very exciting progress to talk about today. And because of that, we will primarily focus on our AML second line strategy and the significant opportunity we believe this represents. As we review the activities of 2023 and the data that we are just now announcing, it becomes increasingly clear that anthracycline that is, remain perhaps the most critical component of treatment for AML and STS. For too long, though, the limitations of anthracyclines have prevented a majority of patients from benefiting. Annamycin has changed that and for the first time ever, we're showing a viable pathway to enable that underserved majority to benefit from anthracyclines.
It's for this reason that we won't be focusing on the rest of our development pipeline today, other than to say that preclinical work continues to position both our stat 3 inhibitors and our metabolic inhibitors for continued outside investment that only helps Moleculin investors. The primary focus of this call and the updates we expect to provide over the coming months are squarely on Annamycin and even more specifically on the treatment of relapsed or refractory AML. And for good reason, a lot of small biotechs frankly, would give anything to have the data we just announced. Annamycin was able to generate a 60% CRC rate in second line patients. And that includes a 50% CR rate in combination with another 10% CRi. Our conservative estimate says that Annamycin should be able to more than double the number of patients achieving complete remission, as compared with all of the approved targeted therapies combined.
This is possible in part because of Annamycin's complete lack of cardiotoxicity. We've treated 82 subjects so far across multiple studies and have yet to see any indication of cardiotoxicity What is important here is that all of this puts us on course to begin a pivotal registration study this year with the potential for securing an accelerated approval pathway from regulators. Look, this is a fundamentally different company than most of you on this call invested in. Candidly, even compared with just a few short months ago, we are now Phase 3 ready. We have data that outperforms every asset approved in AML and in a space where lesser assets have sold for billions. And we have established what we believe is a pathway to approval. Annamycin is a remarkable next generation treatment.
Its lack of cardiotoxicity combined with its greater potency and lack of cross-resistance with currently prescribed anthracyclines truly puts it in a class by itself. And while this is true for a wide range of potential indications, it's especially meaningful in AML. The AML treatment landscape is complicated. And it's easy to lose sight of just how big the unmet need remains. We estimate that currently in the US, almost 60% of AML patients remain without a viable treatment option that could cure their disease or provide lasting remission. And that's despite all of the recent advances in targeted therapies. While we don't have time to explore this in detail today, it's very important for investors to understand why and how significant the unmet need still is.
This is so important, in fact, that we produced a short video taking you through this analysis. The link to that video is shown here. And it's also right on the landing page of our website. If you are currently an investor or considering investment in Moleculin, you owe it to yourself to watch this short six minute video. And because the unmet need is so great, a lot of recent new drug approvals have been allowed on the basis of some pretty low performance numbers. Of the five targeted therapies that have been approved, they've done so on the basis of an average 21% CR rate. What we just announced is more than double that number but the difference is even greater than that. The average 21% CR rate only applies to the few patients that have - that happen to have the required targeted gene mutation.
And that leaves 53% of AML patients out in the cold. In comparison, we've been treating all comers with Annamycin, regardless of gene mutation or prior therapy. And this is where Annamycin really shines compared with all of the currently approved second line therapies. The orange bars on this chart show the CR rates documented for each existing therapy. The blue bars weight those CR rates for the actual percentage of AML patients that can benefit because they happen to have the required gene mutation. And when you add them all together, it reveals that only 13% of all second line patients will achieve a CR as a result of current targeted therapies. But since Annamycin is an all comers drug, there's no reduction from weighting. Instead, 100% of the CR rate should be expected for all second line patients.
And that means our 50% CR rate is multiple times greater than the expected benefit from all targeted therapies combined. And if you're thinking that the relatively low performance bar set by targeted therapies means they don't have much market value, well, think again. In 2021, Servier, a French mid pharma company, paid $2 billion for the combination of [IDHIFA] and TIBSOVO, two drugs that together are expected to produce complete responses in just 4% of the entire population of second line AML patients. We are currently showing a performance from Annamycin that is more than 10 times that number. And if you think that's an outlier, consider that our performance numbers in second line are better than Venetoclax's numbers in first line patients where you would expect higher performance.
Yet, Venetoclax generates $2 billion a year in revenue for AbbVie. And let's not forget that Jazz Pharma paid $1.5 billion for VYXEOS where, again, we believe our performance numbers are much greater. Any way you look at it, we believe the efficacy numbers we are sharing with you today support an eventual exit for Moleculin shareholders that will be measured in the billions. And again, this is just AML. As we said before, our preclinical data suggests Annamycin should also be beneficial in a wide range of other indications, potentially addressing 10 times as many patients as both AML and STS combined. Now keep in mind our opening slide. Anthracyclines remain a cornerstone of chemotherapy in many of the worst cancers. And an anthracycline that has demonstrated a lack of cardiotoxicity could be a game changer for these cancers, especially in children where the current anthracyclines may cure their disease only to limit their lives because of the damage done to their hearts.
With that as an overview, let me now hand the call over to Dr. Paul Waymack, our Senior Chief Medical Officer, to dive a bit deeper into the data. Paul?
Paul Waymack: Thank you, Wally. The next slide summarizes the three clinical trials we have conducted in patients with AML. In our MB-104 clinical study, we dosed six patients with Annamycin at either 100 or 120 milligrams per meter square. The reason for the low dosing was FDA's concern about possible cardiotoxicity. We identified no cardiotoxicity in the study, but we did achieve one CRi despite the extremely low dose of Annamycin. Our next clinical trial MB-105, treated refractory and relapsed AML patients who had an average of four prior treatment regimens. They were treated with Annamycin as monotherapy in the study in cohorts with dosages ranging from 120 to 240 milligrams per meter squared dosing regimen, plus efficacy we had seen in our animal studies, when Annamycin was combined with and Cytarabine.
We elected to stop dose escalation, and to proceed to our current trial, which would combine Annamycin with and Cytarabine. Our combination Annamycin plus Cytarabine clinical trial, that is MB-106, has now enrolled 20 patients. This includes three patients for whom this is first line, 10 patients for whom it is second line therapy, and seven patients for whom it is third line or beyond. Among all patients enrolled in the study, 18 are now available for efficacy. Among these evaluable patients, the rates of CRc, that is combined CR plus CRi, is 39%. But the remaining two patients, one only began treatment last week and thus should not be undergoing bone marrow efficacy evaluations for at least two more weeks. And the other has a bone marrow with too little post chemotherapy, repopulation of the marrow to be currently evaluable.
But he is currently being evaluated for possible bone marrow transplantation. Now we also have an 11% PR rate in this population. But most importantly, among patients for whom combination therapy is used as second line therapy, the CRc rate is 60% and the PR rate is 10%. The next slide, describes all the patients who achieved a CR or CRi to-date in our MB-106 study. As you can see, six of the seven patients received Annamycin as second line therapy, since we don't count maintenance therapy as a second line therapy. You will also note that we have one death from pneumonia, which occurred in the CRi patient. This unfortunate case occurred at a site, where they did not follow the accepted standards of care, for antimicrobial prophylactic therapy in leukemia patients.
As soon as we identified this problem, the site was informed of this issue, and they are now utilizing the standard of care threatened by leukemia medical societies. I would next like to discuss the cardiotoxicity issue with anthracyclines in more detail. The FDA has set limits for the total amount of anthracyclines that a patient may receive over a lifetime. This ranges from 450 to 550 milligrams per meter square, depending upon the anthracycline utilized. As you can see from the slide, among patients who reach this level, the risk of any cardiac event is 65% and the risk of developing heart failure, that is the heart's pumping ability being significantly impaired, is 3.8%. Among patients who receive from 600 to 850 milligrams per meter square, the risk of any cardiac event rises to 100%, and the risk of developing heart failure is 8.3%.
Because of these cardiac problems with other anthracyclines, we have serially monitored multiple parameters of cardiac function in all patients, in all of our anthracycline - Annamycin clinical trials. This has included serial EKGs, troponin concentrations, and troponins are a blood marker for acute cardiac toxicities, and ejection fractions, which is a measure of how efficiently the heart is pumping blood. These data have been reviewed by an independent cardiologist with expertise in the field of drug-induced cardiotoxicities. To-date, he has found no evidence of any cardiotoxicity in any of the patients treated with Annamycin. Finally, I would like to move on briefly to discuss our soft tissue sarcoma data. Our MB-107 study, is a dose escalation study in patients with soft tissue sarcoma with pulmonary metastases, in patients who have had at least one prior therapy.
We finished enrollment in this study some time ago. However, we are continuing to follow these patients since most of them are still alive. As you can see in the column on the far right, among patients treated using the dosing regimen of 330 milligrams per meter square or less, which we believe will be our dosing regimen for any pivotal trial, and who had one or two prior therapies, our median progression-free survival, is now over three months. And we have not yet reached our median overall survival since the majority of the patients who were treated are still alive. We will continue to follow these patients, until we reach our median overall survival. Thank you. And I will now turn the presentation over to Jon.
Jonathan Foster: Thanks, Paul. We ended the year with roughly $24 million in cash on hand, sufficient to take us into the fourth quarter of this year. Keep in mind that this takes into account significant cash outlay, specifically in Q3, in Q4, for preparation to commence our AML pivotal registration study, which Paul and Wally have just discussed. On a post-split basis, our market cap as of mid-March was roughly $20 million, 22 million, with a weekly average trading volume of 55,000 shares with approximately 2.2 million shares outstanding, including pre-funded warrants that number increases to 2.4 million shares. Regarding the reverse split, given our clinical and regulatory progress, it is critical we meet the minimum $1 bid price to keep our NASS active.
As we work wholeheartedly, we believe all such housekeeping items need to be in order as we prepare for a transformation into a pivotal stage development company. We continue to monitor the short positions by brokers, and we have reached out to one broker, notifying them of such shorting imbalances. A significant portion of our daily trading volume is shorting. We believe, we have the opportunity to successfully break this trading pattern with our progress in Annamycin, as we move forward in 2024. As you can see, 2024 is shaping up to be a very exciting year for Moleculin. As Wally and Paul have just discussed, we're moving forward in our clinical progress with Annamycin in 2024, with the following plans. Completing the MB-106 AML trial with first and third line subjects, and concluding the study.
Taking the second line data that Paul just discussed, and holding the end of Phase 2 meeting, with the regulatory bodies here in the U.S. and in Europe. Taking that feedback and initiating a pivotal study with Annamycin on AML. With STS, we're looking to close out the current trial, as Paul just mentioned, and then moving forward with an investigator led, and funded trial. As we have concluded 2023, our year of data, we look forward to moving Moleculin into a pivotal study during 2024. Wally?
Walter Klemp: Thanks, Jon. Well, I'd like to close, with where I began today's presentation. With the observation that the most important cancer therapy, for both AML and STS continues to be in Anthracycline. And we are now providing the data showing that Annamycin has the potential to finally bring the benefit of Anthracyclines, to a majority of these patients. As a bottom line summary, we are now Phase 3 ready. We have data that outperforms every asset approved in AML. And we're in a space where lesser assets recently sold for $2 billion. And we have what we believe is an established pathway to approval. In our view, the gap between these realities and where our market cap is today can no longer be justified. We believe once the market awakens to this new reality, a more appropriate trading range will be established.
And this isn't just talk. I've been investing my own after tax dollars in Moleculin stock, because of my belief in what I'm saying. In fact, I've personally invested over $300,000 over the last 16 months. And the rest of our management team has been investing right alongside me. We are believers and we are committed, to making this a success. From here, you can expect several things from us in the near future. One is, the formation of a larger and more focused science advisory board, to help guide our pathway to new drug approval. We've now shared this data with some of the most recognized and respected key opinion leaders in the global AML community. In every case, they have agreed with our assessment that there is a significant unmet need, that our efficacy numbers, if we produced in our pivotal trial, should support new drug approval, and that they would use Annamycin in their practice once approved.
We'll be announcing SAB appointments in the coming weeks, and I'm confident you will be impressed with their world-class credentials. Another is a formal presentation of the final data at a prestigious conference, which we expect to be announcing soon. Also, we continue to make progress in establishing the market exclusivity of annamycin and hope to release news on that subject as well. And finally, we are preparing to meet with FDA, to discuss this data and establish a concrete approval - pathway for Annamycin that we hope to announce this summer. Until then, I encourage everyone to dig into our data. Look, until now, there has been far too much speculation and not enough facts. That changed with our most recent announcement. We could not be more proud of what we have accomplished, and we couldn't be more excited, for what is about to unfold.
Thank you very much.
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