Moleculin Biotech Inc

NASDAQ:MBRX

Earnings Call Transcript

[Operator]

Good morning, and welcome to the Moleculin Biotech First Quarter 2025 Update Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to turn the call over to your host, Jenene Thomas, Investor Relations. Please go ahead, Jenene.

[Jenene Thomas]

Thank you, Rob, and good morning, 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 any independent source of verified any information obtained from third-party source. Any data that regarding clinical trials and progress are considered preliminary and subject to change.

So, joining us on today's 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'd now like to turn the call over to Walter Klemp. Wally, please proceed.

[Walter Klemp, executive]

Thanks, Jenene. Hello, and welcome to our first quarter earnings conference call. For most of our investors, the focus is on the Phase III MIRACLE trial studying Annamycin for the treatment of relapsed and refractory acute myeloid leukemia and with good reason. This trial has now officially started with the first patient already treated and more on the way. In total, we now have 38 sites selected worldwide between the U.S., Europe, Middle East and North Africa. We just announced this week that we also received complete sign-off from the European Medicines Agency for all 9 countries that we wanted to open in the EU. That was one of the longest lead time items for getting the EU up and running. So, it was a major milestone and a real show of support from the EMA for our trial design and our objectives.

Also, the World Health Organization has officially recognized a new generic drug name for annamycin, which may now be referred to in literature as Naxtarubicin. This was an important first step in actually launching annamycin once it receives new drug approval. And compared with some of the unpronounceable crazy drug names out there, we're really pleased with Naxtarubicin, especially since it sounds a lot like the next-rubicin, which really plays into the next-generation positioning of annamycin. You should expect to see us using both names together until such time as we establish an FDA-approved brand name, which is the next step in positioning the drug for launch.

And we also announced some additional patent protection for annamycin. Even though we already had composition of matter protection extending into at least 2040, these additional patents just continue to build a wider fence of protection around our core asset. We should also be announcing a date for the presentation of the final data from our MB107 clinical trial using annamycin to treat advanced soft tissue sarcoma. Although the preliminary numbers were impressive, we think the final data are really going to turn some heads. So, please look for an announcement on this in the coming weeks. Now this graphic gives you a better perspective on the status of our site selection and approval process for the MIRACLE trial. Compared with the version from our last earnings call, we now have the great majority of countries and sites approved from a regulatory standpoint. Now we're just wrapping up hospital contracts and local ethics approvals.

Just to be clear, though, the most important milestone for us coming up will be the unblinding of the first 45 patients. A lot of eyes will be on us for this data point as it should tell the world definitively that we are likely headed for new drug approval. With that said, what you see here is what gives us so much confidence that we expect to have those first 45 patients treated before the end of this year. To drive this home, just averaging 1 patient per site for the remainder of the year gets us there. And given the enthusiasm that we've seen from these sites, we think we're going to outpace that rate. Now look, we know a lot of investors think that annamycin is the entire ball game for us. And to be sure, it's where most of the attention should be focused because it's so close to NDA submission.

But we do have 2 other very exciting technologies, and one of them is WP1066, our lead STAT3 inhibitor. Don't forget that WP1066 has already shown activity in the treatment of brain tumors, and that was with a very inefficient form of drug delivery. Well, now WP1066 is in another investigator-sponsored clinical trial, this time in combination with radiation at Northwestern University. And since we announced this trial in September of last year, we've already recruited 7 patients. That's nearly a patient per month for just one site. So, this is moving quickly. Now this is still with the existing oral delivery, which we know isn't optimal. And we're collaborating with Emory University on the development of an IV delivery for 1066, which we think could significantly improve its activity. So, we'll keep you updated as more developments occur here. Well, that gives you a high-level overview of recent events.

So now let me hand things over to Dr. Paul Waymack, our Senior Chief Medical Officer, to give you a few more insights into our clinical activity. Paul?

[John Waymack, executive]

Thanks, Wally. Before I speak about the MIRACLE trial, let's catch up on our MB106 Phase II trial, which had essentially the same inclusion and exclusion criteria plus the same treatment regimen for patients as MIRACLE, except we treated some first line plus some third line and beyond subjects in MB106. Our first patient who did not receive a bone marrow transplant but did achieve a complete remission finally relapsed after over 600 days. While we are disappointed with the subject, it must be said that achieving an almost 2-year complete remission for a 78-year-old following 17 cycles of venetoclax regimen, it's remarkable given the recent literature, which documents the dismal median overall survival or venetoclax regimen failures, which have a median overall survival of less than 3 months regardless of further treatments.

Durability for MB106 is still developing as the final subjects are maintaining their complete remission. You can see on this chart that receiving a bone marrow transplant definitely correlates with better durability. And if these 3 keep moving to the right, the median durability for the trial should eventually be even with sub 2 durability that is roughly 400 days. Now moving on to the MIRACLE trial. It'll only treat initial refractory relapsed AML subjects, that is, this is a second-line therapy study where annamycin in combination with cytarabine will be delivered on a 5 plus 3 days basis compared to just cytarabine plus placebo. As Wally mentioned recruitment and treatment of subjects is already underway in Ukraine, and we expect the initial readout of safety and efficacy data on the first 45 subjects around the end of 2025.

On May 12, we announced that the European Medicines Agency, EMA, they approved our clinical trial application to conduct our MIRACLE trial in all 9 countries we submitted in the EU. We received final reports of acceptable for Belgium, France, Germany, Italy, Lithuania, Poland, Romania and Spain. These approvals under the condition that we submit results of appropriate nonclinical GLP studies before initiating the Phase III portion, that is the Part B of the MIRACLE study, combined with individual country committees and ethics approval for these 9 countries in the EU allows us to proceed enrolling subjects in these countries. Also in November 2024, we amended our existing U.S. IND by submitting the MIRACLE trial protocol, which allows for dosing of U.S. AML patients above the lifetime maximum allowable dose for currently prescribed anthracyclines.

Since then, we received FDA feedback and guidance on that amendment. This feedback allowed a reduction in the number of subjects to be enrolled in Part B of the Phase III pivotal protocol to 222 patients. And obviously, any reduction in recruitment numbers helps to shorten the time to completion of the trial. FDA made a number of other requests related to our protocol. These requested changes focused mainly on safety and subject monitoring, clinical pharmacology and inclusion/exclusion criteria. None of the requests resulted in significant alterations in the overall trial design or the dosing of annamycin. Our last response to FDA was submitted on April 18, 2025, and we have not yet received follow-up communication since that time. We are, therefore, now proceeding with this amended MIRACLE trial protocol in the U.S.

As is typical with large pivotal Phase III global clinical trials at their onset, there are minor differences between the U.S. and EU protocols to FDA and EMA request. However, we do not view these as a barrier to successfully completing the study, and we are now working to harmonize the protocols into a single global version. Regarding our newly initiated Phase III study, it was designed after an end of Phase III meeting with FDA is to be a randomized study comparing the dosing regimen with which we had great success in our MB106 study high-dose cytarabine with a control arm of placebo plus high-dose cytarabine. We chose this design FDA encouraged it and because 2 recent large randomized clinical trials in refractory and relapsed AML patients that is the MIROS and CLASTIC-1 clinical trials used it and both achieved approximately a 17.5% complete remission rate among patients randomized to receive high-dose cytarabine plus placebo.

To that end, we can expect we will need for our annamycin plus high-dose cytarabine treatment arm to a 17.5% complete response rate to a statistically significant degree for our drug to be approved by FDA for marketing. But as a reminder, in our MB106 study, this combination of annamycin plus high-dose cytarabine achieved a 50% complete remission rate. The primary efficacy endpoint for this study will be the rate of complete remission of the leukemia at approximately day 35. During Part A of our study, we will have 2 different annamycin treatment arms, a 190mg per meter square treatment arm and a 230mg per meter square treatment arm. There will be an unblinding of the data in Part A after the first 45 patients have completed their efficacy analysis and a second unblinding after between 75 and 90 patients have completed their efficacy analysis.

The interim looks at the data are in part to determine which of the 2 annamycin dosing regimens will be taken to completion of the study. In Part B of the study, we will continue enrolling patients we will randomize in a 1:1 ratio, the placebo plus cytarabine treatment arm against whichever of the 2 dosing regimens of annamycin was found to be superior plus the cytarabine treatment arm. Finally, as Wally mentioned, we intend to release the final data readout on MB107, where we treated advanced soft tissue sarcomas, which had metastasized to the lung with annamycin as monotherapy. Most subjects were treated well above the lifetime maximum anthracycline dose and yet after reviewing all the cardiac safety data, our expert noted that he saw no signs of study-related drug-induced cardiotoxicity. We are excited about the results of these trials, obviously.

Now I'll turn it over to Jonathan Foster, our Executive Vice President and CFO. Jonathan?

[Jonathan Foster, executive]

Thanks, Paul. We ended the quarter with about $8 million with cash on hand that should run our operations into the third quarter of this year. To get us well into the first quarter of 2026, we will need to raise approximately $15 million. Now we expect this amount will get us beyond the initial 45 subject data readout, supporting our efficacy rates with additional 30 subjects receiving annamycin or Naxtarubicin. And also, by then, we should have a total of 75 to 90 subjects recruited, moving us closer to the second data readout in the first half of 2026. Our market cap is up to over $14 million with 14.1 million shares outstanding. Our trading volume is healthy with a 3-month trading volume of almost 6 million shares per day. It is spiky.

We had a healthy volume of about 2.4 million shares traded this past Monday with the EU news that Wally and Paul just mentioned. Now we've been busy by looking at this chart. We've delivered on contracting sites, site selections, presenting presentations, medical posters on MB106 and also on our sponsored research at MD Anderson. Most importantly is what we announced Monday, the approval of the EU member countries. Obtaining all of these approvals with just 17 employees supported by a great team of consultants on the timeline which we expected and we told the public is something of which we're very, very proud. This sets the stage for announcing outside of the EU and the U.S. additional country regulatory approvals, along with first-by-country hospital site initiation visits, which sets them up to be open to recruitment.

We'll update you on recruitment on our path to get to the initial 45 subjects, 15 of the control arms and 30 with the 2 different doses of annamycin. Now this safety and efficacy readout in addition to the MB106 data should provide the market enough data to support a substantial increase in our market cap.

Wally?

[Walter Klemp, executive]

Thanks, Jon. From a big picture perspective, we are all intensely focused on pushing Moleculin's market cap into the range that it truly deserves. And we think the building blocks for that market cap breakout are well placed. Annamycin is a truly disruptive technology in a space where exit valuations are often measured in the billions. The fact is we are positioned to possibly become the first ever non-cardiotoxic anthracycline. And don't forget, anthracyclines are used to treat not just AML, but nearly half of all cancers and 60% of all childhood cancers. And Moleculin doesn't just avoid cross-resistance with other anthracyclines chemotherapies like venetoclax, it actually outperforms current anthracyclines in most preclinical tumor models.

It's not just that we believe we have a better drug here, it's far more clinically advanced than we think the market is giving us credit for. Our Phase II efficacy data is better than any drug ever approved for second-line AML therapy, and we should have Phase III data to share publicly by the second half of this year. All of this is supported by a diverse pipeline of follow-on technologies and is managed by a truly veteran drug development team with multiple FDA approvals and big pharma exits to our names. The key milestones are coming quickly this year. So, stay tuned for a wild ride at Moleculin.

Operator, we're now ready to open up for Q&A.

[Operator]

[Operator Instructions] The first question is from the line of Jonathan Aschoff with ROTH Capital.

[Jonathan Aschoff, analyst]

Congratulations on getting MIRACLE enrolling. I was curious, the statement about the results will be submitted as a substantial modification to the EMA, does that have any negative implications for the time line of EU approval versus U.S.?

[Walter Klemp, executive]

Well, we don't think so. The issue here is EMA requested some additional GLP preclinical data that we know we can produce. It's just a matter of timing and budgeting. So, the issue here will be how quickly we can complete that GLP testing before the EU countries are allowed to move on to Part B. That said, Jonathan, the time lines that we've built, we would continue to be recruiting in the U.S. sites and non-EU sites even in that interim period in theory. So, the trial really doesn't have to slow down, and we believe we will get to the requisite number of EU patients to satisfy EU approval requirements. So, the answer is, in theory, it shouldn't change the time line for approval for EMA, but we have to acknowledge that depending on the time it takes to get those GLP studies done that it could, but that's not our expectation.

[Jonathan Aschoff, analyst]

Okay. How close is [indiscernible] you think to getting an optimal formulation like in the bag by the end of this year? Or is it something that could drag out a little?

[Walter Klemp, executive]

The thing, every time you ask a scientist to give you a time line for discovering something new, they'll give you a lecture on what it takes to discover something new, right? We think we're beyond the having to discover something new stage and that where we are now is actually implementing a strategy for a new formulation that satisfies the needs for IV delivery. So, we feel like we're now in blocking and tackling and just getting the preclinical work done so that we can move this into clinic. And I feel like your sort of estimate there by the end of the year is a decent target. But I do have to acknowledge you can always get speed bumps when you're developing a new formulation. So, we don't want to overpromise there, but I think you should expect to hear something from us before the end of the year.

[Jonathan Aschoff, analyst]

Okay. That's very fair. One for Jon, please. Is that $3.5 million sort of a fair run rate for R&D for the rest of the year's quarters? I mean, that should go up, shouldn't it?

[Jonathan Foster, executive]

It will go up, especially as we head into 2026. I mean bring on the GLP and some manufacturing expenses. Right now, we have enough drug for Part A. We have start manufacturing drug for Part B.

[Operator]

The next question is from the line of Jason McCarthy with Maxim Group.

[Jason Mccarthy, analyst]

You had mentioned the primary is the 35-day CR rate, call it, 1 month just for simplicity. Do you need any durability data for potential approval or is 1 month enough? And what are really the expectations for cytarabine alone? And if CRs are achieved with cytarabine, how long do they typically last? I'm trying to get a sense of what the bar is going to be here when you get to that unblinded interim data and say like this looks like this should carry through all the way to the end for an approvable drug.

[Walter Klemp, executive]

Well, I'm going to ask Paul to sort of give you a more thorough answer, Jason. But the good news, just to be really clear, the good news is durability is not a primary endpoint for approval here. It's a secondary objective. So, our approval doesn't depend on that. But it's still an interesting topic, and I think it's important to talk about.

So, Paul, do you want to maybe give a more thorough response to Jason here?

[John Waymack, executive]

That's a good question. As Wally said, FDA has said that's their primary endpoint. And these studies I quoted that had the 17% to 18% CR rate with high-dose cytarabine, these were not small studies. These were studies where the control arm of cytarabine plus placebo had hundreds of patients. So we are, therefore, quite confident that in our trial, the CR rate with cytarabine is going to be in the teens. As far as durability, it will last for a few months, but that's a secondary endpoint. Of course, the ultimate arbitrator is FDA. But at our end of Phase I meeting, they said that's the endpoint, and they understand that we are not powered to show statistical significance we're not reasonably powered to show statistical significance for these other ones. There should be a strong trend. This is because that's what the FDA asked for.

And when you look at the recent approvals for AML drugs CR rate was the primary endpoint. The secondaries were overall survival durability. Those were trends. They never reached statistical significance for these drugs. So, we think we're in good shape there. And certainly, if we are anywhere near the 50% CR rate, we're in great shape.

[Jonathan Foster, executive]

There's a nuance here, too, Jason, that I think is important to feed in. And that is the prior studies that Paul mentioned, 2 specifically, the MIROS trial and the CLASTIC-1 trial. Both of those studies allowed multiple cycles of cytarabine before measuring for CR. So that's a difference between their trial designs and ours. In our trial, you only get 1 cycle, you only get that roughly 35 days, and that's when we measure. So, if the patient can't get a CR off of a single cycle of cytarabine plus placebo, then that counts as not a CR. So partly why Paul said we expect it to be in the teens. What he didn't say was our instincts say it's probably going to be lower than that 17.5% because those patients were allowed more than 1 cycle of cytarabine. In ours, they won't get more than 1 cycle. So, logic says that we should expect that number to be lower. Now we're not statistically planning on that, but it's what we expect.

[Jason Mccarthy, analyst]

And I'd imagine that some of your results or could they be impacted by underlying factors like age and mutational genomic alterations. Are those things that will be considered when you announce the data?

[Jonathan Foster, executive]

Well, for sure, we'll stratify by age and by genetic mutations, but our primary endpoint isn't dependent upon it. And interestingly, when you look at the Phase II data that we've talked about, that Paul has talked about, we're pretty agnostic to what genetic mutations are and to what prior therapies were. So, our view is we're glad for all comers. It's a funny -- just an anecdotal story. When Paul and I presented this protocol to a number of practitioners, a common theme from the practitioner was, will we assume you're going to exclude venetoclax failures because they're so difficult to treat. And our answer is no, absolutely not, bring them on. We are not excluding venetoclax failures. In fact, we're hoping for them because the results are so dismal for those patients.

And our Phase II data says we deliver essentially the same CR rate for venetoclax failures as we do for anybody else. So, we are not sensitive to those differentiations in terms of -- because obviously, fitness for intensive chemotherapy is largely determined by age. So, there's also the assumption that we are adverse to elderly patients, and that's just not the case. Our median age in the Phase II data set was in the 60s. And so, we're happy to have elderly patients, and we're happy to have mutational abnormalities and venetoclax failures.

[Operator]

Thank you. This will conclude today's question-and-answer session, and we'll also conclude today's call. Thank you for your participation. You may now disconnect your lines at this time. Have a wonderful day.