Newsfilter article unlocker

We've been working toward this moment for years now and we finally have our first look at phase 3 pivotal data based on the first 45 patients enrolled and it looks fantastic. The Anamycin test arms outperformed control by more than threefold. Welcome back and thank you for joining us today for another Virtual Investor What This Means segment. My name is Janine Thomas. I am CEO of JTCIR and I will be the moderator. I'm very pleased to be joined by Walter Klemp. He is Chairman and Chief Executive Officer of Moleculin Biotech. Welcome, Wally. Hi, Janine. Great to see you. Well, so happy to have you. Can't wait to dive into our discussion. But before we get started, I just want to inform our audience that Moleculin Bio is listed on NASDAQ and trades under the ticker MBRX. And during today's discussion, the company will be making forward-looking statements and actual results could differ materially from these forward- looking statements. Some of the factors that could cause actual results to differ materially from those contemplated by such forward-lookings statements are discussed in the periodic reports Moleculine files with the Securities and Exchange Commission. These documents are available in the investor section of the company's website and on the SEC's website. We encourage you to view these documents carefully. So Wally, June has clearly been a milestone month for Moleculin and you've recently reported your first interim look at a pivotal phase 2-3 data and refreshed your corporate deck. So before we dig into the details, can you set the stage for our audience and tell us what this month means for the company? Well, there's no question that June was a huge month for us in terms of data generation and the impact that all of that has on our business model. And because of this, there is a lot of new information in the presentation deck that we recently updated on our website. And I really want to encourage people to go through that deck to understand the magnitude of what's changed here. That said, I'd love to use this What This Means segment to highlight some of the most important updates. Excellent. So let's start with what you've called the most important information of all, the data. First, congratulations, Wally. And you now have your first look at Pivotal Phase 2-3 miracle results from the first 45 patients. Can you walk us through what you saw and what this means for the program? Well, as you know, Janine, we've been working toward this moment for years now. And we finally have our first look at phase three pivotal data based on the first 45 patients enrolled. And it looks fantastic. The animicin test arms outperformed control by more than threefold. And while that's not surprising, it's well above the threshold that this trial is designed to detect by the end. So we just couldn't be happier. So these remission rates were measured after only a single cycle of treatment. For our audience, can you explain why that's so important and what it means when you compare these numbers to historical trials and to your own phase two data? Yes, we do need to keep in mind that this is after only a single cycle of treatment. Based on the most commonly cited historical trials, you'd normally expect to see high DAC monotherapy, that's our control arm, deliver a 17 to 18% CR rate, but in those trials, patients received multiple cycles. Considering that this trial measures performance after only one cycle, this outcome is right in line with expectations. And likewise, the animis and test arm results are a little lower than our phase two data, but again, our phase 2 trial allowed multiple cycles, so this outcome based on just a single cycle is not only very strong, it's right in line with expectations as well. And when you look at the makeup of the first 45 subjects, the data just look even stronger. And more than 75% of the subjects were over age 60, which is in the demographic sweet spot for AML. And it speaks to the improved tolerability of anamycin compared with existing therapies. While you also have earlier phase two data to draw on, when you put it all together, and particularly when you look at the hardest to treat venetoclax patients, what does the combined picture tell us? Now, we always have to be careful when discussing pooled data because there are minor differences in the protocol between the trials. But when you combine this interim phase 3 data with the phase 2 data we already had, we're talking about 50 AML patients having been treated with the combination of anamycin and cytarabine, and the aggregate response rate suggests a complete remission rate that is more than double that of venetoclax HMA regimens in the same second-line population. And speaking of venetoclax, we know that patients who are relapsed or refractory after first-line veneteclax regimens, they're among the hardest to treat. Well, 17 of the 45 patients we reported on had received some form of venетoclax as part of their first- line therapy. And across that entire subgroup, which, by the way, includes patients who were in the control arm, we saw a 29% and 47% CR and CRC response rate, respectively. Now, because those figures include control arm patients, they are, if anything, a conservative view of what anamycin is contributing in this population. That, again, is much higher than would be expected from any current salvage therapy. So let's turn to the competitive landscape. The dominant theme in AML for some time now has been targeted therapies. And I know many investors have asked how anamycin fits in. So how do you see the competitive landscape playing out as you position anamyzin for approval? We know that one thing on the minds of many hematology oncologists is the continued effort to utilize targeted therapies in AML, and many of them have asked us how we see the competitive landscape playing out as we begin to position anamycin for approval. Now, our corporate deck really does a good job of walking you through how we sea targeted therapies, creating an even greater opening for anamycine. The dilemma facing targeted therapies is that they have limited efficacy as monotherapies. So now the focus is on adding them to existing induction therapies like 7 plus 3 or then HMA, and the results are encouraging. But the problem with these new triplet therapies is managing the layered effect of toxicities from three drugs in combination. So you've talked about an anamycin safety profile as a key differentiator. Where does that profile give you an edge in a world increasingly built around triplet combinations? Well, that's where we believe anamycin's improved safety profile really stands out. Anamycin is designed to be non-cardiotoxic, and the data to date, reviewed independently, showed no evidence of cardiotoxicity. And that alone would put anamyzin in a class by itself as a true next-generation anthracycline. But physician feedback from our clinical trials is that anamycin is also just more tolerable than current anthracyclines. So in a future where triplet therapies become the standard of care in first line, we think anamycine becomes the go-to choice for the anthracycling in those combinations. And we believe where those triplet therapies that don't include animicin inevitably fail, and most of them will, animicins' lack of cross-resistance with 7 plus 3 and with venetoclax makes it the most logical salvage therapy strategy. Any way you look at it, we think the future competitive landscape holds significant opportunity for animicine. So strong data is one thing, a genuine commercial opportunity is another. You recently completed independent market research to test exactly that. Can you share what physicians and payers told you and what it means for anamycin's market potential? Sure. We do think that the new phase three data clearly raises confidence in the likelihood that anamycine will be approved for use in AML. But look, a reasonable follow-on question is whether that will translate into significant commercial potential. And the discussion we just had about the competitive landscape helps set the stage for that. But what really matters is what the clinicians and hospitals who are treating these patients think. Well, we just completed a round of market research to answer that very question, and the results support a very strong view of Anamycin's market potential. We engaged an independent pharmaceutical marketing firm to conduct two different surveys, one with physicians and one with payers. The first survey included 19 physicians in the AML space and asked them to rate their likelihood to prescribe anamycin if it's approved. Now, in drug development, this is usually done on a seven-point scale, and anamycins scored a six out of seven on average. And to put that in context, only one of those 19 oncologists told us that they were highly satisfied with the current second-line AML options available today. So the appetite for a better therapy is real. At the same time, the second survey was conducted with five insurers and five hospital administrators. And the focus was on understanding whether they would recommend adding anamycin to the formulary, and if so, what would they recommend for reimbursement? They clearly agreed that anamycin not only appeared to fill a significant unmet need, but it had the potential to reduce overall healthcare costs for AML patients. The combination of this resulted in a recommended reimbursement rate in the range of $30,000 per infusion, or about $90,000 to $100,000 per AML patient. And that puts us at a slight premium to Vixios and a slight discount to a typical six-month course of a Venn HMA regimen. And when you translate that research into numbers, what does it mean for the revenue opportunity both within AML and beyond it? Well, there's a new table in our deck that will walk you through the math, but we think this supports a potential peak revenue case north of half a billion dollars with animicin positioned strictly as a second-line AML therapy and pushing upwards of a billion if it's eventually positioned as a first-line therapy, which we really expect. It's important to remember also that this is just in AML. As a next generation non-cardiotoxic anthracycline, anamycin could be useful in a wide range of tumors. And we think that supports a 10x growth potential beyond AML alone. I appreciate what you've provided so far. So interesting, so exciting. But I'd like to close with one question. I think that's on a lot of investors' minds. So with data and economics like these, why is molecular market cap still where it's at and what needs to change? I understand you've put together a framework for how you think about it, Wally. Well, we do believe that all this new data makes a very strong case for animicin's eventual approval and for it to have commercial potential measured in the billions. Sooner or later, though, the conversation always comes around to this. With such strong data and economic potential, why is your market cap so low? And look, there are no black and white answers to this question, but I'll give you my opinion based on countless conversations with investors, strategics, clinicians, and advisors. To start with, there are four key factors that support the market cap of a small biotech company like Moleculin. Those four things are trend, compelling data, institutional validation, and available financing. Now, the first of those is about whether the company fits the current theme or trend. In AML, that trend has unquestionably been targeted therapies, for better or for worse, and we simply do not align with that trend. We are an outlier, and more importantly, we're positioned to be a disruptor. But until the other three factors are solidified, being off-trend puts us at a significant valuation disadvantage. Until just this week, the compelling data piece was still in question. We only really had phase two data on a very small end that was easy to critique. Now that's changed. The data we just released not only aligns with our earlier data, but it also comes from the most rigorous trial design possible, a multi-center, multinational, double-blind, placebo-controlled approval trial. And when pooled with our prior data, it reflects a trend, and that trend supports potential approval. Now, the one factor we've been missing from the start is to have our science and data validated through support from a marquee health care fund or a strategic partner. We believe the data we just announced is exactly the kind of clinical validation that earns that important recognition. If we're right, I would argue that the window of opportunity is as open as it's ever likely to be right now. And the fourth factor, available financing, well, that's the one we believe can drive dislocation of market cap regardless of where the other three stand. There's no question that the market has had to factor in financing overhang for molecular. We can't make that overhang disappear overnight. But what we can do is continue to be transparent about our cash requirements, which we detail in our SEC filings, and we will continue to be disciplined about addressing them going forward. So I'd offer this simple way to think about it. If we're right about the other elements of the Analyzing Economic Equation, that's the data, the competitive positioning, and the commercial potential, which we believe is measured in the billions, by the way, then the capital we expect to raise and the dilution that comes with it is modest relative to the value that we're working to build. We'll keep providing as much guidance as we responsibly can, and we'll let that intrinsic value case speak for itself. Well, I think that says it all, Wally. And with that, this concludes the Virtual Investor What This Means segment featuring Moleculin Biotech. I'd like to sincerely thank Wally Klemth, Chairman and CEO, for joining us today. And I'd also like to thank our viewers for your time and attention. To stay up to date on the company, visit their website at Moleculine.com to sign up for their email alerts and follow their social channels. Thanks for joining me. Thanks for having us. And I wish everyone a great rest of your day.