Moleculin Biotech, Inc. (NASDAQ:MBRX) Q3 2023 Earnings Call Transcript

Moleculin Biotech, Inc. (NASDAQ:MBRX) Q3 2023 Earnings Call Transcript November 13, 2023

Operator: Greetings, and welcome to the Moleculin Biotech Third Quarter 2023 Conference Call and Webcast. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I’d like to turn the call over to Jenene Thomas, Investor Relations. Thank you. You may begin.

Jenene Thomas: Thank you, Gerald. Good morning, and welcome everyone. At this time, I would like to remind our listeners that remarks made during this webcast may state management’s intentions, beliefs, expectations, or future projections. These are forward-looking statements and involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the safe harbor provisions of the federal securities laws and are based on Moleculin’s current expectations and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from these contemplated by such forward-looking statements are discussed in the periodic reports, Moleculin files with the Securities and Exchange Commission.

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These documents are available in the Investors section of the company’s website and on the Securities and Exchange Commission’s website. We encourage you to review these documents carefully. Additionally, certain information contained in this webcast relates to or is based on studies, publications, surveys and other data obtained from third-party sources and the company’s own estimates and research. While the company believes these third-party sources to be reliable as of the date of this presentation, it does not independently verify and makes no representation as to the adequacy, fairness, accuracy or completeness of or that any independent source of verified any information obtained from third party source. Any data discussed regarding clinical trials and progress are considered preliminary and subject to change.

So joining us on the call today from the Moleculin’s management team are Walter Klemp, Chairman and Chief Executive Officer; Dr. John Paul Waymack, Senior Chief Medical Officer; and Jonathan Foster, the Executive Vice President and Chief Financial Officer. I would now like to turn the call over to Walter Klemp, Chairman and CEO. Wally, please proceed.

Walter Klemp: Thanks, Jenene. Hello, everyone. I’m Wally Klemp, Founder, CEO, and Chairman of Moleculin Biotech. We are really excited to welcome you to this Q3 earnings call. We’ve been saying for some time now that this would be our year of data, and we are finally able to deliver on the Phase 2 data we’ve been hoping for. To be clear, this is preliminary and subject to change, and there’s a lot more data to come in the next few quarters. But we have a start, and it’s a good one. We’re going to share it with you on this call. As we walk through the data today, I’d ask you to keep in mind one of our core beliefs. That is that the most important therapeutic tool for both AML and advanced STS has been and continues to be an anthracycline.

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Q&A Session

Despite the fact that there have been more than a dozen new drug approvals in these indications over the last five or so years, the first line therapy for both indications and the best hope for a positive outcome remains with the use of anthracyclines. Unfortunately, today’s anthracyclines have major limitations that prevent most patients from sharing in this benefit. But those days are about to be over. Moleculin intends on making this indispensable tool available to those patients who have until now been excluded from their use. And of course, the drug we intend to do this with is Annamycin, our lead program in a pipeline that is both deep and broad with a long list of potential additional high-value targeted indications. As many of you know, we’re doing this with a highly efficient capital structure by exploiting a global network of preeminent collaborators.

Now, our pipeline is robust and too complicated to capture in just one slide. After all, between the trials that we’ve completed, are currently running, and are approved to begin, we’re talking about 11 clinical trials for our technologies. Today, we’ll focus on just two of them. Our European trial in acute myeloid leukemia and our U.S. trial in advanced soft tissue sarcoma. As a reminder, we have orphan drug designation and fast-track status in both indications, and we have a strong patent position for Annamycin and a range of potential indications. For those of you who are new to the story, it’s critical to understand why the use of anthracyclines has been limited for so long. Far and away, the greatest limitation to current anthracyclines is cardiotoxicity.

This is the primary reason patients either can’t receive anthracyclines or have to terminate treatment before receiving the desired benefit. As well, there are also limitations resulting from tissue organ distribution and multi-drug resistance mechanisms. As a result, there are many patients who simply don’t get to benefit from today’s anthracyclines. Now, when it comes to cardiotoxicity, the data are quite surprising. Anthracyclines are so cardiotoxic, in fact, that the FDA has established a lifetime maximum allowable dose of 550 milligrams per square meter. As you can see from the chart on the left, if you only accumulate 100 milligrams per square meter, your risk of cardiac impairment is negligible. But if you go up to that maximum, there’s a 65% chance you will experience some form of cardiac impairment.

And if you go up to 850 milligrams, it’s 100% certain you will have some kind of impairment. Now to make this even more graphic, the chart on the right shows that 600 milligrams per square meter, there’s an 8% chance you’ll have full-on heart failure during treatment. When you translate this reality to our lead indications, you see that more than half of all patients diagnosed with AML cannot receive currently prescribed anthracyclines because they’re deemed unfit due to age or poor health. Likewise, in advanced soft tissue sarcoma, even though the standard-of-care therapy is always anchored around an anthracycline, usually doxorubicin, only about 30% of patients will respond and all of those will relapse. And once they’re at the lifetime maximum allowable dose, they’re relegated to a range of drug cocktails that do little or nothing to extend their lives.

The best answers currently available are simply not enough. In AML, that is a drug called venetoclax, most often used in combination with azacitidine. This VEN-AZA combination is capable of generating a complete response in 37% of patients, which is good for that 37%. And this drug generates a half a billion dollars a year in revenue for AbbVie. But there’s a strong consensus among clinicians that VEN-AZA is just too hard on patients. It’s very difficult for patients to tolerate and its clear there needs to be a better answer. In advanced STS, the best fall back treatments appear to be dacarbazine and trabectadine. But the best they can offer is about a three month PFS to around half the patients with no appreciable improvement in overall survival.

There simply must be a better answer. And now there is. Annamycin is what we call a next generation anthracycline that’s designed to be non-cardiotoxic and appears to be improving outcomes in both AML and STS. In AML, we’ve completed Phase 1 testing and are now in Phase 2. And in STS, we’ve not only completed Phase 1, we’ve also completed enrollment in our Phase 2 study and are preparing for a pivotal approval trial. Annamycin does have orphan drug and fast track status in both indications and importantly, strong patent protection through 2040. So when we say Annamycin is non-cardiotoxic, we mean 100% non-cardiotoxic. It’s important to stress this as there are other players out there with anthracycline technologies that they claim are less cardiotoxic than doxorubicin.

But to our knowledge, no one is capable of making the claim we make because we’re the only ones testing every aspect of cardiotoxicity and then submitting our data to an independent cardiology expert at the Cleveland Clinic. And in addition to being completely non-cardiotoxic, we appear to be easier on patients than currently approved anthracycline. As a small example, 65% or more patients treated with doxorubicin will lose their hair. We’re seeing less than 10% of patients having any hair loss with Annamycin. But despite the fact that Annamycin is easier on patients, it is actually more potent than doxorubicin in most tumor models. And it’s able to avoid the multidrug resistance mechanisms that limit the efficacy of doxorubicin in many patients.