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Edited Transcript of BPTH earnings conference call or presentation 15-Nov-19 1:30pm GMT

Q3 2019 Bio Path Holdings Inc Earnings Call

Ogden Nov 20, 2019 (Thomson StreetEvents) -- Edited Transcript of Bio Path Holdings Inc earnings conference call or presentation Friday, November 15, 2019 at 1:30:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Anthony Price

Bio-Path Holdings, Inc. - SVP of Finance, Accounting & Administration

* 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

* Kerry Conlin

Stern Investor Relations, Inc. - IR Executive

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Presentation

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Operator [1]

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

I would now like to turn the call over to Kerry Conlin of Stern Investor Relations. Please proceed.

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Kerry Conlin, Stern Investor Relations, Inc. - IR Executive [2]

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Thank you, operator. Welcome to the Bio-Path Holdings Conference Call and Webcast to review the company's third quarter 2019 earnings results and to provide an update on recent pipeline and corporate development. Earlier, we issued a press release, which outlines the topics that we plan to discuss on today's call. The release is available at www.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 would 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, Kerry. Good morning, everyone, and thank you for joining us today. Throughout the third quarter, we continued to execute on our clinical development plans across our DNAbilize platform of innovative RNAi nanoparticle therapeutics. As I'll describe in more detail later in the call, we continued treating patients and are nearing completion of the safety portion of the Phase II clinical study of prexigebersen in combination with decitabine. The study contains 2 cohorts of patients. The first in untreated acute myeloid leukemia, or AML; and high-risk myelodysplastic syndrome, or MDS patients; and a second cohort in refractory/relapsed AML and high-risk MDS patients. Going forward, we plan to add venetoclax 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 in 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 diseased cells with high uptake into the cell via incorporation into lipid layers. There's been no evidence of toxicity associated with our technology. We are 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 advancing 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 in 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 had elected a low-intensity regimen. The trial was open-label with a 2-stage design to assess the safety profile, pharmacokinetics, pharmacodynamics and efficacy of prexigebersen.

The primary endpoint of the study was complete remission, including patients who achieved incomplete hematologic recovery and complete remission with incomplete platelet recovery. Secondary endpoints 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 2018, we presented exciting interim results for our Phase II study. And during the first quarter of 2019, we were pleased to report additional analysis from the study. In our original interim analysis from the ongoing Phase II study, our results showed that 47% of the evaluable patients showed some form of response to the combination treatment, including 4 treatments with complete remission or 24%; and 4 patients with stable disease, including 1 patient who achieved a leukemia-free status; and 1 patient who had significantly reduced bone marrow blast.

As you may recall, during the first quarter of 2019, we announced updated interim results from 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 complete response, including 1 CRI and 1 morphologic leukemia-free state; and 6 stable disease responses, including 2 patients who had greater than 50% reduction in bone marrow blast. 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 the 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 this 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.

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 those 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 the untreated AML patients as existed in the pre-amended trial, but with the addition of high-risk MDS patients; and a second cohort comprised of refractory/relapsed AML patients and high-risk MDS patients. The amended Phase II study is 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 is evaluating patients for a safety assessment of prexigebersen and decitabine with the goal of determining the combination to be safe in at least 6 evaluable patients. Once completed, we plan to modify testing of both cohorts of patients to add venetoclax to the prexigebersen-decitabine combination treatment. Once we have completed the 6-patient safety assessment of prexigebersen, decitabine, venetoclax combination, the efficacy segment of this trial can commence. It is anticipated that each cohort will include an interim assessment of 19 evaluable patients that would assess whether the treatment efficacy of the combination of prexigebersen, decitabine, venetoclax exceeds the efficacy of 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 this 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 accruals.

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 patients with advanced solid tumors, including ovarian and uterine, pancreatic and hormone refractory breast cancer. This trial is expected to be conducted at several leading cancer centers and is planned initially to evaluate safety and efficacy of prexigebersen starting with ovarian and endometrial cancer. Patients diagnosed with recurrent ovarian and endometrial cancer often have poor outcomes, and it is our hope that prexigebersen may provide clinical benefit for such patients. We are finalizing our IND and expect to begin this study in 2020.

Next, let's review the preclinical data for our third drug candidate, BP1003, which targets the STAT3 protein. We are studying BP1003 for treatment of pancreatic cancer 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 abilities 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 significant acceptance in the cancer research field. STAT3, which is a point of convergence for many oncogenic 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 ductal adenocarcinoma. Activation of STAT3 correlates with poor clinical outcome, high-grade disease and metastases and has been linked with resistance to chemotherapy, including gemcitabine, considered a standard of care agent for advanced pancreatic cancer. Therefore, inhibition of STAT3 in 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 blocks -- blots were conducted to determine the inhibitory effects that 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 ductal carcinoma patient-derived xenografts to study the overall activity of BP1003 alone and in combination with gemcitabine. Using previously defined criteria, tissue slice viability inhibition greater than 30% with a p-value of less than 0.05 was a response. For validation of the ex vivo results, pancreatic cancer patient 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 tissue sensitivity assay, BP1003 at a dose of 10 micromolars significantly inhibited the tissue slice viability in 9 out of 18 pancreatic cancer-derived xenografts by more than 30%. 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, a combination of BP1003 and gemcitabine caused tumor regression during the 28-day drug treatment period. This anticancer activity was maintained for another 20 days even when the drug treatment had ceased.

These very encouraging data were well received earlier this year at AACR, where we had a universally enthusiastic response from the audience. 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 potent lymphosome-incorporated STAT3 antisense sequence in decreasing non-small cell lung cancer cell viability. Further validation in AML cells demonstrated that BP1003 inhibited cell viability and STAT3 protein expression.

We are excited by these preclinical data, and to be tackling some solid tumors with our proprietary technology platform. We look forward to our IND-enabling studies for BP1003 in 2020, with a goal to enter first-in-human trials with this very promising product candidate next year.

Finally, we have also updated our plans for BP1002, our second therapeutic candidate, which targets Bcl-2. We recently filed an Investigational New Drug or IND application for our second pipeline candidate, BP1002. Venetoclax has also shown activity against the anti-apoptotic protein, Bcl-2 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 allogenic hemopoetic cell transplantation, disease relapse invariably occurs, oftentimes due to BH3 domain mutation over time. BP1002 also targets the Bcl-2 protein. However, BP1002 activity is based on blocking the Bcl-2 messenger RNA and not the BH3 domain. As a result, we believe that BP1002 could provide an alternative to venetoclax patients who have relapsed. Further, we believe there could be AML patient relapses from venetoclax treatments, representing an additional opportunity for Bio-Path to treat those patients with BP1002.

As a result, we have filed for registration of BP1002 in CLL patients, including venetoclax relapses. We can amend this registration to include AML relapses, if those occur. The planned modification of our Phase II clinical program in AML to include venetoclax combination treatment with prexigebersen will give us early experience with treating Bcl-2-driven anti-apoptosis in these patients. We have filed an IND and expect to begin our first-in-human study in BP1002 next year. And as always, we continue to evaluate opportunities to expand our DNAbilize technology platform to other oncology indications.

Importantly, we remain well capitalized to fully execute our clinical development plans for our 3 promising therapeutic candidates. As a result of our successful financing earlier this year, 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 third quarter financials, along with balance sheet highlights. Anthony?

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

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Thanks, Peter. The company reported a net loss of $2.2 million or $0.78 per share for the 3 months ended September 30, 2019, compared to a net loss of $3.1 million or $5.38 per share for the 3 months ended September 30, 2018. Research and development expenses for the 3 months ended September 30, 2019, decreased to $1.4 million compared to $2.3 million for the 3 months ended September 30, 2018, primarily due to lower expenses in 2019 related to drug material releases for our Phase II clinical trials for prexigebersen in AML and CML.

General and administrative expenses for the 3 months ended September 30, 2019, increased to $0.9 million compared to $0.7 million for the 3 months ended September 30, 2018, primarily due to increased legal fees and insurance costs. As of September 30, 2019, the company had cash of $15.4 million compared to $1.0 million at December 31, 2018. Net cash used in operating activities for the 9 months ended September 30, 2019, was $6.1 million compared to $4.8 million for the comparable period in 2018. Net cash provided by financing activities for the 9 months ended September 30, 2019, was $20.5 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 third quarter of 2019, we have made meaningful progress particularly in our prexigebersen program. We are dosing patients in new cohorts in our Phase II study of prexigebersen, and we are moving our preclinical candidates towards first-in-human clinical trials, which should begin next year. We are enthusiastic about the opportunities ahead throughout the balance of 2019 and beyond, and we have a number of exciting milestones ahead. We look forward to achieving these goals in 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 Partners.

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

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First, great progress and a -- still solid cash position. So as is in the details provided, Peter, just looking online and looking at what's going on in some of these spaces as far as other clinical trials, can you give us just any update on the competitive landscape in general as far as anything else you've heard or seen, progress with other clinical trials, either AML, some of the solid tumors or the pancreatic cancer space.

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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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Well, in AML, we're really seeing the results of a pretty active space over the last several years versus decitabine and then of course, venetoclax being the most recent news. And I think that is -- in the things that we're looking at, that is the most important compound. Venetoclax, in some respects, is similar to our drug. It has to be combined with a chemotherapeutic agent that will cause the apoptotic signal, and venetoclax treats the ability of Bcl-2 to neutralize that message. So that's an important drug that I think we need to target on for right now. And as I said, we believe we can be a follow-on -- 2 ways to benefit: one, to make the venetoclax treatments even better because we'll reduce the number of those cancer proteins, the division; and then secondly, if indeed there are relapsing mechanisms, so we can follow in behind.

And as far as solid tumors, there's nothing that I'm focusing on. I think from the researchers we deal with, solid tumors is just a -- radiation and chemotherapy is tough. Advanced ovarian is a difficult area right now

(technical difficulty)

We have a systemic treatment that has shown the ability to penetrate the stroma in a pancreatic tumor. And we're told by the investigators that this is the only thing they've seen that could do that. So we're very excited about that.

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Operator [4]

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Our next question comes from 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 [5]

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I don't know if you could give us some color regarding how many of the 6 patients that are enrolled after the protocol amendment or AML versus MDS patient? And when do you expect to complete the -- what -- the analysis of the safety results?

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [6]

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That -- the analysis should be coming shortly. We just weren't ready to have it closed for this quarter. The interest in the trial has picked up. Of course, I think most people are waiting for the venetoclax to come on board.

As far as the MDS inclusion, at this point, it's mostly AML, and I think that there may be 1 or 2. I don't have the table in front of me that has that information, but it's mostly AML at this point. Clearly, MDS needs a treatment. Based on the numbers we see for comparison, going forward, I think the outcome, expected value, at least for a CR is in the 16% to 20% range. So that's decitabine treatment. So I think, MDS high risk is something that we think when we get going, will be a good opportunity for us.

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Yi Chen, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [7]

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And second question is, when do you expect to file the R&D for solid tumors? Is it going to be in the first half of 2020? And also, considering the potential initiation of trials for BP1002 and for the solid tumor and potentially even BP1003 in 2020, how should we look at the operating expenses that are going to potentially increase?

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [8]

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Okay. Let me see if I could remember these. First of all, the timing on the solid tumors is very close. We've been very active with the FDA. As you know or you heard, we filed our IND. And so the response seems to be -- have been good. But that takes additional information request, which we've done. We haven't had to have any conference calls, so we're pleased with how it feels. But we've also had commitments for the AML processing to get submitted and then the IND for the solid tumors. The reason why I cite that is, it's -- for filing the -- it's more a function of the queue with our electronic submission people. And I can say that based on where we're at now, you could expect we would file in December, frankly. It's just a queue process. So we're much, much closer than you might think. So we've been pretty busy on this front.

Now you probably won't hear about that until we do our next -- until either we do our next earnings call when we announce activities or, in fact, the IND is granted. We don't generally press release on filing an IND. It's not, in our view, significant enough news, but we're very close on that view. As far as dollars, recall, 1002 and solid tumors are -- those are designed as 3-plus-3s. The cash, yes, it is more trials and more CROs, but that's kind of a scaling-up activity, particularly when you consider you're dealing with lower doses and so it's manageable.

And the second thing is 1002, it's our goal to start that trial by the end of the year, but we have to -- 1003, it's our goal to start that trial by the end of the year. But in some respects, we deal with some uncertainty about how much testing may be needed. An important variable is the effect that this drug has in controlling the immune system. And so part of the design we're doing is looking at what is needed in vivo wise to satisfy the safety of those treatments with respect to an immune -- potential immune response, which we don't think will be any, but we have to test it. And so -- but anyway, that's color, if you will, about the potential timing on 1003. So we think our cash is very manageable, $10 million to $15 million should more than do it. And so we can look to be raising more funds or actually, we're getting to a point here where we will have enough assets in play with quality demonstrated on our technology to take on partners.

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Yi Chen, H.C. Wainwright & Co, LLC, Research Division - MD of Equity Research & Senior Healthcare Analyst [9]

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My last question is whether there's any updated preclinical results regarding prexigebersen in combination with decitabine and venetoclax?

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [10]

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We test with -- we test -- what we look for in our testing is the combination with venetoclax. We already know the benefit we see with decitabine. And 3 combinations are difficult topics. Now we haven't released any of that because we want to keep doing more testing. But the other issue, of course, as you know, is potential for a paper. So I think when we come out with that, we can release what we think are the incremental benefits. That's typically what we release. That's what we did, I think, when we talked about starting the combination with LDAC, and I think we also mentioned at that time with decitabine. But we do have the consideration, particularly if we're working with somebody, they absolutely put a clamp on us on data because they want to do a paper. That's what happened with BP1003 with the work in pancreatic cancer. That had to held quiet because they wanted to do an AACR paper on it or poster. So we'll reveal when we can, but we are doing that kind of testing, but not triple, double.

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Operator [11]

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And I'm not showing any further questions at this time. I would now like to turn the call back over to Peter Nielsen for any further remarks.

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Peter H. Nielsen, Bio-Path Holdings, Inc. - Co-Founder, Chairman of the Board, CEO, President, CFO & Treasurer [12]

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Thank you, again, everyone, for joining us and for your continued support of Bio-Path. We're making good progress, and we hope to have some significant milestones in the near future. Have a great day.

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Operator [13]

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Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.