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Edited Transcript of BPTH earnings conference call or presentation 15-Aug-19 12:30pm GMT

Q2 2019 Bio Path Holdings Inc Earnings Call

Ogden Aug 16, 2019 (Thomson StreetEvents) -- Edited Transcript of Bio Path Holdings Inc earnings conference call or presentation Thursday, August 15, 2019 at 12:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Anthony Price

Bio-Path Holdings, Inc. - VP of Finance & Accounting

* Peter H. Nielsen

Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer

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Conference Call Participants

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* Laura Shelmire Engel

Stonegate Capital Markets, Inc., Research Division - Director of Research

* Yi Chen

H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst

* Will O’Connor

Stern Investor Relations, Inc. - Associate

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Presentation

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Operator [1]

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Good morning, ladies gentlemen, and welcome to Bio-Path Holdings Second Quarter 2019 Earnings Conference Call. (Operator Instructions)

I would now like to turn the call over to Will O'Connor of Stern Investor Relations. Please proceed.

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Will O’Connor, Stern Investor Relations, Inc. - Associate [2]

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Thank you, operator. Welcome to the Bio-Path Holdings conference call and webcast to review the company's second quarter 2019 earnings results and to provide an update on recent pipeline and corporate developments. Earlier, we issued a press release, which outlines the topics that we plan to discuss on today's call. The release is available at biopathholdings.com.

With me today from Bio-Path are President and CEO, Peter Nielsen; and Vice President of Finance and Accounting, Anthony Price.

Before we begin the call, I'd like to remind you that today's discussion will contain forward-looking statements that involve risks and uncertainties. These risks and uncertainties are outlined in today's press release and in the company's recent filings with the Securities and Exchange Commission, which we urge you to read. Our actual results may differ materially from what is discussed on today's call.

With that, I'll now turn the call over to Bio-Path's CEO, Peter Nielsen.

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [3]

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Thanks, Will. Good morning, everyone, and thank you for joining us today. Throughout the second quarter, we continued to build our DNAbilize platform and to execute on our clinical development plans for our innovative RNAi nanoparticle therapeutics. As I'll describe in more detail later in the call, we have initiated amended cohorts of our Phase II study of prexigebersen. There will be 2 cohorts of patients. The first in untreated acute myeloid leukemia, or AML, and high-risk myelodysplastic syndrome, or MDS patients. And the second cohort in refractory/relapsed AML and high-risk MDS patients. Safety will be evaluated with prexigebersen, decitabine and venetoclax. The final step will be to evaluate the efficacy of the triple combination of prexigebersen, decitabine and venetoclax in both cohorts of patients.

I'll begin my discussion with a review of our platform technology. As you know, the DNAbilize platform is our proprietary antisense RNAi nanoparticle technology, which we use for the creation of nucleic-acid therapeutics. DNAbilize therapeutics integrate with the cellular membrane because of their unique structure, allowing the antisense drug to be delivered to the disease cells with high uptake into the cells via incorporation into the lipid layers.

There has been no evidence of toxicity associated with our technology. We're extremely enthusiastic about the potential of our DNAbilize platform for developing novel treatments for patients suffering from disease with high unmet medical need.

Let's review the progress we've made advance our lead product candidate, prexigebersen. Prexigebersen is being studied in a Phase II clinical trial for the treatment of AML. As a reminder, this trial is a multicenter study that originally studied prexigebersen combination with low-dose cytarabine, or LDAC, in de novo patients with previously untreated AML, who are not otherwise eligible for standard or high-intensity chemotherapy regimens or who have elected a low-intensity regimen. The trial is open-label with a 2-stage design to assess the safety profile, pharmacokinetics, pharmacodynamics and efficacy of prexigebersen. The primary endpoint of the study is complete remission, including patients who achieve incomplete hematology recovery and complete remission with incomplete platelet recovery. Secondary endpoints will assess the safety and efficacy of prexigebersen, including overall survival, time to response, duration of response and adverse events as evaluated by physical examination findings, vital signs and clinical laboratory tests.

In April 2019, we presented exciting interim results from our Phase II study. And during the first quarter 2019, we were pleased to report additional analysis from this study. In our original interim analysis from this ongoing Phase II study, our results showed 47% of the evaluable patients showed some form of response to the combination treatment, including 4 patients with complete remission, or 24%, and 4 patients with stable disease, including 1 patient who had achieved a leukemia-free status and 1 patient who had significantly reduced bone marrows. As you may recall, during the first quarter of 2019, we announced updated interim results for this study. The updated interim results showed that the efficacy profile had improved to where 11, or 65%, of the 17 evaluable patients had a response, including 5, or 29%, who achieved CR, including a CRi, and 1 morphologic leukemia-free state and 6 stable disease responses, including 2 patients who had greater than 50% reduction from bone marrow blasts. Importantly, through investigation by the principal investigators, it was observed that 68% of these patients were secondary AML patients, an extremely difficult class to treat.

These updated interim data from stage 1 of our Phase II study of prexigebersen in de novo AML patients only increased our confidence in the safety and efficacy profile of prexigebersen and underscore its potential to treat AML patients. The complete response rate for LDAC treatment alone for the class of patients in this study was benchmarked at 7% to 13%, whereas prexigebersen treatment with LDAC showed a 29% CR rate with a highly favorable safety profile.

The recent approval of the frontline therapy venetoclax provides an opportunity for combining prexigebersen with the combination of venetoclax plus decitabine for the treatment of de novo AML patients. As we have said before, we view prexigebersen as an ideal combination candidate with frontline therapy. Our aim is to match prexigebersen with the leading frontline therapies to improve treatment options for patients.

As the treatment landscape evolves, we will continue to respond to those advances. The plans for our registration-directed clinical development program for prexigebersen as a treatment for AML reflects these changes. Firstly, we have amended the existing stage 2 clinical trial. The key change in the amended Phase II study is the inclusion of patients with high-risk myelodysplastic syndrome, or MDS, and refractory/relapsed AML patients. The restructured Phase II clinical trial now has 2 cohorts of patients. The first being untreated AML patients as existed in the pre-amended trial, but with the addition of high-risk MDS patients. And the second cohort comprised of refractory/relapsed AML patients and high-risk MDS patients.

The amended Phase II study will continue evaluating the safety of prexigebersen in combination with decitabine in both cohorts of patients at a dose of 60 milligram per square meter in combination with decitabine. The study will include a total of 6 evaluable patients for a study assessment of prexigebersen and decitabine. To date, the company has enrolled 5 patients, of which 3 are evaluable, 3 untreated AML patients who received therapy prior to amending the trial and 2 patients who are now being treated under the amended Phase II trial. Assuming a successful completion of this study assessment, this study will then modify testing of both cohorts of patients to add venetoclax to the prexigebersen, decitabine combination treatment.

After a 6-patient study assessment of the prexigebersen, decitabine, venetoclax combination, the efficacy segment of this trial will commence. It is anticipated each cohort will include an interim assessment at 19 evaluable patients that would assess whether the treatment efficacy of the combination of prexigebersen, decitabine, venetoclax exceeds the efficacy of the current standard-of-care therapy with statistical significance.

Upon such favorable data, Bio-Path would petition the U.S. Food and Drug Administration, or the FDA, for accelerated approval. The efficacy segment of the trial is expected to be conducted at up to 10 clinical sites in the United States. Moving forward, the company intends to evaluate potential clinical sites in Europe with an emphasis on patient approvals.

Overall, these transformational steps will result in 2 registration-directed cohorts of our Phase II clinical trial in AML. Both cohorts will study prexigebersen plus decitabine plus venetoclax, one for untreated AML and MDS, the other for relapsed/refractory AML and MDS.

Before turning to our additional programs, I'd like to briefly touch on our planned Phase I clinical trial of prexigebersen in patient with advanced solid tumors, including ovarian and uterine, pancreatic and potentially hormonal refractory breast cancer. This trial is expected to be conducted at several leading cancer centers and is planned initially to evaluate the safety of prexigebersen in combination with standard of care for each tumor type. We expect to file an IND by the end of the third quarter and to initiate this trial in 2020.

Next, let's review the clinical -- preclinical data recently presented from our third drug candidate, BP1003, which targets the STAT3 protein. We are studying BP1003 for the treatment of pancreatic in a patient-derived tumor model. Previous models have shown the drug to successfully penetrate pancreatic tumors and enhance the efficacy of standard frontline treatments. The results from our preclinical studies of BP1003 were highlighted in a poster presentation at the American Association of Cancer Research Annual Meeting, or the AACR, in Atlanta in April.

We are excited to be targeting STAT3 for a number of reasons. Signal transduction and activator transcription 3, or STAT3, though typically inactive in normal cells, is aberrantly active in cancer cells. The ability of tumor cells to proliferate uncontrollably, resist apoptosis or cell death, induce vascular formation and invade distant organs are well-recognized hallmarks of cancer. STAT3 is a regulator of the genes involved in these cancer processes. More recently, the capability of tumors to evade immune surveillance and avoid destruction by the immune system has also gained significance -- significant acceptance in the cancer research field. STAT3, which is a point of convergence for many oncologic pathways, has emerged as a critical mediator of tumor immune evasion at multiple levels.

Activation of STAT3 has been found in many types of cancers, including non-small cell lung cancer, AML and pancreatic cancer. Activation of STAT3 correlates with poor clinical outcome, high-grade disease and metastasis and has been linked with resistance to chemotherapy, including gemcitabine, considered a standard of care for advanced pancreatic cancer. Therefore, inhibition of STAT3 combination with chemotherapy is expected to produce enhanced clinical benefit. The poster at AACR highlighted 4 antisense oligo sequences directed against STAT3 messenger RNA, identified by Bio-Path and manufactured using DNAbilize antisense RNAi nanoparticle technology. Cell viability tests and Western blots were conducted to determine the inhibitory effects of liposome-incorporated STAT3 antisense oligo on non-small cell lung cancer and AML cells. An ex vivo live tissue sensitivity assay was performed with a panel of 20 pancreatic patient-derived xenografts to study the overall activity of BP1003 alone and in combination with gemcitabine. Using previously defined criteria, tissue slice variability inhibition greater than 30% with a P value of less than 0.05 was a response. For validation of ex vivo results, pancreatic cancer patient-derived xenografts of tumor-bearing mice were administered BP1003 and gemcitabine twice a week for 28 days. Tumor volumes were monitored for up to 49 days.

In the live tissue assay, BP1003 at a dose of 10 micromole significantly inhibited the tissue slice variability -- viability at 9 out of 18 pancreatic patient-derived xenografts by more than 30%, with a P value of less than 0.05. The combination of BP1003 and gemcitabine further enhanced ex vivo efficacy of BP1003 in a subset of patient-derived xenografts. In the in vivo study with pancreatic cancer patient-derived xenograft models, the combination of BP1003 and gemcitabine caused tumor regression during the 28-day treatment period. This anticancer activity was maintained for another 21 days even when drug treatment had ceased. These very encouraging data were well received in AACR, where we had a very positive response.

We are particularly excited to launch this program as it will be our first-in-human validation of this cutting-edge therapy in an especially challenging cancer indication that has limited treatment options. In addition, BP1003 was selected as the most liposome-incorporated STAT3 antisense sequence in decreasing non-small cell lung cancer cells viability. Further validation in AML cells demonstrated that BP1003 inhibited cell viability and STAT3 protein expression.

We're excited by these preclinical data and to be tackling solid tumors with our proprietary technology platform. We look forward to continuing our IND-enabling studies for BP1003 in 2019 with a goal to enter a first-in-human trial with this very promising product candidate next year.

Finally, we have also updated our plans for BP1002, our second therapeutic candidate, which targets BCL2. Venetoclax has also shown activity against the antiapoptotic protein BCL2 and works by neutralizing the protein's BH3 domain. It is an improved treatment for chronic lymphocytic leukemia, or CLL, patients and untreated AML patients in combination with decitabine. However, with the exception of some patients treated with cell transplantation, disease relapse invariably incurs oftentimes due to BH3 domain mutation over time. BP1002 also targets the BCL2 protein. However, BP1002 activity is based on blocking the BCL2 messenger RNA and not the BH3 domain. As a result, we believe that BP1002 can provide an alternative to venetoclax patients who have relapsed. Further, we believe there will be AML patient relapses from venetoclax treatments representing an additional opportunity for Bio-Path to treat those patients with BP1002.

As a result, we believe we will be able to file for registration with BP1002 for the treatment of venetoclax relapses in both CLL patients and AML patients. The planned modification of our Phase II clinical program in AML to include venetoclax combination treatments with prexigebersen will give us early experience with treating BCL2-driven antiapoptosis in these patients. And as always, we continue to evaluate opportunities to expand our DNAbilize technology platform in other oncology indications.

Finally, I'd like to briefly highlight that we successfully raised $21 million in the first quarter along with 2 smaller offerings. This financing enables us to execute on our clinical development plans for our 3 promising therapeutic candidates. With these additional funds, we now have the resources to achieve a number of key milestones that we believe should significantly enhance shareholder value.

With that, I'll now turn the program over to Anthony Price for a brief review of our second quarter financials along with balance sheet highlights. Anthony?

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Anthony Price, Bio-Path Holdings, Inc. - VP of Finance & Accounting [4]

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Thanks, Peter. The company reported a net loss of $2.5 million or $0.87 per share for the 3 months ended June 30, 2019, compared to a net loss of $1.7 million or $2.96 per share for the 3 months ended June 30, 2018.

Research and development expenses for the 3 months ended June 30, 2019, increased to $1.5 million compared to $0.8 million for the 3 months ended June 30, 2018, primarily due to the commencement of activities related to stage 2 of our Phase II clinical trial in AML to include venetoclax combination treatment with prexigebersen and 2 cohorts of patients.

General and administrative expenses for the 3 months ended June 30, 2019, increased to $1.0 million compared to $0.9 million for the 3 months ended June 30, 2018, primarily due to increased legal fees and insurance costs.

As of June 30, 2019, the company had cash of $17.1 million compared to $1.0 million at December 31, 2018.

Net cash used in operating activities for the 6 months ended June 30, 2019, was $4.2 million compared to $3.4 million for the comparable period in 2018. Net cash provided by financing activities for the 6 months ended June 30, 2019, was $20.3 million.

With that, I'll now turn the call back over to Peter.

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [5]

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Thanks, Anthony. In closing, throughout the first half of 2019, we have made meaningful progress advancing our clinical development pipeline. We are dosing patients in the new cohorts of the Phase II study of prexigebersen, and we are moving our preclinical candidates towards first-in-human clinical trials.

These are very exciting times at Bio-Path, and we are enthusiastic about the opportunities ahead throughout the balance of 2019 and beyond. We have a number of milestones ahead that we believe will be value-creating inflection points, and we look forward to achieving these goals in the coming months and year.

With that, operator, we are ready to open the call for questions.

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Questions and Answers

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Operator [1]

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(Operator Instructions) Our first question comes from Laura Engel with Stonegate Capital Markets.

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Laura Shelmire Engel, Stonegate Capital Markets, Inc., Research Division - Director of Research [2]

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Just -- really just 2 points of clarification. Peter, on BP1002, could you update or just clarify on the timing on the program lymphoma and CLL program filing an IND application for that? What's the timing looking like on that? And then just clarify on BP1003, could you be more specific as far as maybe first half, second half 2020 for moving that program along? Just a little bit more about the timing on this. Everything else is so detailed, we always appreciate it.

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [3]

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Okay. The BP1002, yes, that actually in my comments I have indicated that we've had that IND filed in the third quarter, and we're pretty close unless there's some additional information class that comes up but frankly, that IND, the files are prepared and it's in the process of electronic transformation into files that can be filed electronically with the IND. I think as you know you have to do that now. So it's in that process right now. I believe we have all of the additional CMC information that we gained with our experts we work with where needed. And these are additional things now that they want and drug substance in the incorporated-liposome. So that's additional little more complicated things. So we have that worked out. So we're in the process actually of doing that.

Now for BP1003, my memory, we have about 5 IND-enabling studies to do, one of which we've added and that's to -- because STAT3 is really a quite interesting protein that's affecting the immune system. We have to -- had to come up with another working with all -- some of our experts, PIs, for testings and in fact, we were having negative effect on the immune system. So -- and so we're -- have that study. The latest update I had, we would have all those studies underway by the end of the year and maybe just a month or so overlap on the finish of one, which I think is our immune sensitivity test. And then from there, it's simply compounding. Now that will be an all-new IND. So it will be one of those large documents. So I'd like to have that IND filed by the end of the first half of 2020, maybe faster. I mean we have the template with BP1002. So we don't have to embed anything new. So it's typically with these things now that -- some of these complicated indications, it's the protocol, and we have a lot of reviews, as you know, we have a lot of KOLs and they bring new insights. We have one with our solid tumor that came with FDA meetings that gave us some additional direction that we thought we needed to take advantage of and could help speed up. And so that's the thing. So we should be testing in humans in probably the second half of 2020.

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Laura Shelmire Engel, Stonegate Capital Markets, Inc., Research Division - Director of Research [4]

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Okay. Well, great, lot to look forward to. And we'll always keep an eye, cash looks good, costs were as expected, you all are moving along. So I just wanted to say good morning, and get those clarification. So appreciate that and I'll get back in the queue.

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Operator [5]

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Our next question comes Yi Chen with H.C. Wainwright.

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Yi Chen, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [6]

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My first question is, has the company completed the preclinical study of the triple combination?

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [7]

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Yes. We have. And it's shown on -- I think I'll -- well, I guess, I got a release coming. But, yes, we had -- we've done that and we've shown a significant benefit of combining the 2 in terms of reducing AML cell viability. So yes, we have that -- and so we have that groundwork to go forward with the testing in humans.

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Yi Chen, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [8]

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Do you plan to release the preclinical results anytime soon?

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [9]

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We will certainly indicate the benefit we saw. We probably -- I think we did the last time when we did this with prexigebersen and so many others. So I think we will, but I can't say that I've had that discussion but we typically want to put the information out there.

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Yi Chen, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [10]

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Okay. During the remainder of 2019, do you expect any data readout such as the -- from the cohort of prexigebersen plus decitabine?

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [11]

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Well, I think what we would normally do is we'll give a readout from the safety in decitabine and prexigebersen that 6 evaluable patients, as I indicated in my comments. We have 5 now, and 3 evaluable, 2 in process. So I'm pretty confident we'll have that sixth one. And when we do that, again, we follow the template of what we did when we did our original safety combination with LDAC and prexigebersen. We gave a readout on the safety and, of course, if we had any indications of the efficacy, we also put that out. So if we follow that template, which I'm sure we will, I would expect we'd have some kind of readout information in the fourth quarter, earlier than later.

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Yi Chen, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [12]

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Got it. Last question is, do you expect the operating expenses in third and fourth quarter to be comparable to those in the second quarter?

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [13]

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Well, as you know, these things are moving averages and we've typically been about $1.5 million, $1.6 million burn rate on cash. And I think in the fourth quarter, we're probably getting ready now with 2 cohorts to move up to, I think, maybe a $2 million rate.

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Operator [14]

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And I'm showing no further questions in the queue at this time. I'd like to turn the call back to Peter Nielsen for any closing remarks.

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [15]

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Thank you, operator. Thank you, again, everyone, for joining us and for your continued interest and support of Bio-Path. Have a great day.

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Operator [16]

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Ladies and gentleman, thank you for your participation on today's conference. This does conclude your program, and you may all disconnect. Everyone, have a great day.