What changed in this filing

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Item 1. Business

2022-03-24 compared with 2021-03-24 · 724 added, 529 removed, 386 unchanged (76% of the section changed)

We are a clinical stage pharmaceutical company focused on the treatment of highly resistant cancers and viruses.

We have three core technologies, based substantially on discoveries made at MD Anderson Cancer Center (MD Anderson or MDA).

We have four drug candidates, three of which have now shown human activity in clinical trials.

During 2020, three of those drug candidates accounted for five clinical trials in the US and Europe.

Two of those trials are ongoing externally funded studies of WP1066 in brain tumors.

Two of our internally funded Phase 1 clinical trials have essentially concluded. The trial for Annamycin in acute myeloid leukemia (AML) successfully met its safety endpoint, and the trial for WP1220 in cutaneous T-cell lymphoma (CTCL) demonstrated an objective response rate of 45% and a clinical benefit rate of 100%.

An additional Phase 1/2 clinical trial of Annamycin in AML is also internally funded and is currently ongoing.

In 2021, we anticipate the initiation of five new clinical trials in addition to the three trials continuing from 2020.

In late 2020, we received U.S.

Food and Drug Administration (FDA) clearance to proceed with an additional Phase 1b/2 clinical trial of Annamycin for the treatment of sarcoma lung metastases and we are preparing to begin this trial in the US.

We also plan to seek approval to begin a Phase 1/2 clinical trial of Annamycin in combination with Ara-C for the treatment of AML in Europe.

These two new trials will be internally funded.

We expect a second Phase 1b/2 clinical trial of Annamycin in sarcoma lung metastases to be primarily investigator-funded in Europe and we plan to seek a collaborative partner to support a Phase 2 clinical study of WP1220 in CTCL.

Finally, we are working to initiate a clinical trial of WP1122, in either a Phase 1a/1b clinical trial in COVID-19 or a physician-sponsored clinical trial for a cancer indication, or both.

BUSINESS 

Overview 

We are a clinical stage pharmaceutical company with a growing pipeline of clinical programs for the treatment of highly resistant cancers and viruses.

We have three core technologies, based substantially on discoveries made at and licensed from MD Anderson Cancer Center (MD Anderson) in Houston, Texas.

We have six drug candidates, three of which have now shown human activity in clinical trials.

Core Technologies

Our core technologies consist of the following:

a) Annamycin, a “next generation”

anthracycline designed to be different than currently approved anthracyclines by eliminating cardiotoxicity and avoiding the multidrug resistance mechanisms that can limit the efficacy of the approved products.

(Annamycin has shown no cardiotoxicity in subjects treated to date in Moleculin’s clinical trials);

b) our WP1066 Portfolio, which includes WP1066 and WP1220, two of several Immune/Transcription Modulators in the portfolio designed to inhibit p-STAT3 (phosphorylated signal transducer and activator of transcription) among other transcription factors associated with tumor activity, while also stimulating a natural immune response to tumors by inhibiting the errant activity of Regulatory T-Cells (TRegs);

and c) our WP1122 Portfolio, which contains compounds (including WP1122, WP1096, WP1097) designed to exploit the potential uses of inhibitors of glycolysis such as 2-deoxy-D-glucose (2-DG), which we believe may provide an opportunity to cut off the fuel supply of tumors by taking advantage of their high level of dependence on glucose in comparison to healthy cells.

Clinical Trials

In the US and Europe, we have completed or are currently conducting clinical trials for three of our drug candidates –

Annamycin, WP1066, and WP1220.

All trials are or were in the Phase 1 portion, except the WP1220 trial, which was a proof-of-concept clinical trial.

During 2021, we had four active clinical trials evaluating either Annamycin or WP1066 in the US and Europe.

In 2021 and early 2022, there were also three “right-to-try”

(or their foreign equivalent) uses of Annamycin and WP1066.

Of the four clinical trials active in 2021, two of those are internally funded trials (the difference between “internally”

and “externally”

funded trials is discussed below) of Annamycin.

One is studying relapsed and refractory acute myeloid leukemia (AML) in Europe, and one is investigating soft tissue sarcoma metastasized to the lungs (STS lung metastases) in the US.

The other two trials are externally funded studies of WP1066 in brain tumors, both in the US, one of which was terminated during the year because the Principal Investigator in that trial moved to a new institution. We successfully concluded an internally funded Phase 1 AML clinical trial in Europe in early 2022, establishing a Recommended Phase 2 Dose (RP2D) for Annamycin as a single agent.

We are in the process of locking the database and beginning the completion of the Clinical Study Report (CSR) for that study.

During 2021, we filed applications or began recruiting for four clinical trials in the US and Europe.

The investigational new drug (IND) application in the US for a Phase 1b/2 trial of Annamycin for the treatment of STS lung metastases was filed in late 2020 with the US Food and Drug Administration (FDA).

The IND went into effect in early 2021 and this trial began recruiting subjects shortly thereafter.

In 2021, we also filed and received clearance for an IND for a Phase 1 trial for WP1122 treating glioblastoma multiforme (GBM) in adults, and consistent with our strategy of leveraging external funding for many of our clinical trials, we intend to seek opportunities for an investigator-initiated clinical trial in cancer patients in 2022.

We also filed in October 2021 a clinical trial application (CTA) to commence a Phase 1a clinical trial of WP1122 in the United Kingdom for the treatment of COVID-19 for which we later received the appropriate authorization to proceed.

In early March 2022, we filed an amended protocol with both the Riverside Ethics Committee and Medicines and Healthcare Products Regulatory Agency (MHRA).

The amendment updated the level of dilution of the oral solution to ensure that WP1122 is fully dissolved in a wider range of pharmacy environments. We believe that the risk/benefit aspect of the study was not affected by this change.

Once this amendment is approved, we expect this internally funded trial to begin in the first half of 2022.

We also filed a CTA in Poland in November 2021 for a Phase 1/2 trial for the treatment of relapsed and refractory AML with a combination of Annamycin and Cytarabine (AnnAraC) for which we received Central Ethics approval in December 2021.

Upon receipt of approval from the Office for Registration of Medicinal Products, Medical Devices and Biocidal Products (URPL), we plan to proceed with this trial. This trial builds on the safety and dosage data from the two successfully concluded single agent Annamycin AML Phase 1 trials in the US and Europe and is supported by preclinical animal data from our ongoing sponsored research at MD Anderson.

The AnnAraC trial is expected to begin during the first half of 2022.

In addition to the trials described above, we expect that an investigator sponsored trial will be initiated in Europe in 2022 to study an alternative dosing regimen for Annamycin in the treatment of STS lung metastases. During 2022, we may also have another investigator led trial outside of the US (partially internally funded) focused on the use of WP1122 for the treatment of subjects with COVID-19.

The volatility and unpredictability of COVID-19 incidence in various countries may limit our ability to recruit certain subjects and could make it infeasible for us to conduct a Phase 2 clinical trial on a timely basis, or at all.

As mentioned earlier, the WP1066 brain tumor trial at MD Anderson was terminated in 2021, as the original lead physician investigator moved to another institution.

We expect another externally funded Phase 1/2 investigator led trial to replace the MD Anderson trial in 2022.

That trial’s IND will likely reference our WP1066 GBM IND filed in early 2022, once cleared by the FDA.

We expect this new trial to investigate WP1066 in combination with radiation for the treatment of adult brain tumors.

As summarized and explained further below, we expect up to ten clinical trials (or more, if we proceed with a COVID-19 trial in addition to the UK trial) to be active or concluded by the end of 2022.

Clinical Summary as of this filing 1

Unless CSR Completed –

 Data are preliminary and subject to change

(Funding Source:

Internal unless

noted as External)

MB-104 / R/R AML / US

Phase 1 concluded and CSR completed.

Phase 2 start awaits further data from other trials

Maximum Dose allowed per protocol 120 mg/m 2

Met safety endpoints; no cardiotoxicity

14.3% MLFS (subtherapeutic dose level when compared to MB-105)

MB-105 / R/R AML / Poland

Phase 1 concluded and database lock is in process

Maximum Dose and RP2D 240 mg/m 2

Met safety endpoints;

no cardiotoxicity

60% ORR in last cohort (2 PRs and 1 CRi)

MB-107 / STS Lung Metastases / US

cohort 4 at 390 mg/m 2 ; cohort expanded due to DLT

Recruiting and estimate expansion phase in 2022

No cardiotoxicity

Some subjects exhibited stable disease with one PR as best overall response to date

Annamycin in Combination with Cytarabine

MB-106 / R/R AML / Europe

Expected to begin recruiting Phase 1 in 2022

CTA submitted, awaiting approval

Not applicable as trial has not started (N/A)

IIT / STS Lung Metastases / Poland

Expect to begin Phase 1b recruiting in 2022

Investigator led trial with a different dosing regimen than MB-107

IIT / Adult GBM / US

Terminated by site

Investigator left for another institution

No drug related serious adverse events noted

No activity demonstrated. RP2D or MTD not established.

WP1066 in combination with radiation

IIT / Adult GBM / US

Expect to begin recruiting in 2022

To be led by investigator with prior experience with WP1066

IIT / Pediatric Brain Tumors / US

In Dose Level 3 at 8mg/kg

Ongoing recruitment

No drug related serious adverse events noted

1 DIPG patient had a temporary clinical response

MB-201 / CTCL / Poland

Concluded and CSR completed

Believe results warrant a Phase 2 study

Met safety endpoints

60% of subjects documented PR

MB-301 / COVID-19 / UK

Expect to begin in first half of 2022

First in human trial for WP1122

1  This is a summary of the detailed discussion below and does not include compassionate use/right-to-try usage of our drug candidates.

Terms are defined elsewhere in this document including “internal”

versus “external”

Additionally, “Met safety endpoints”

means that no drug-related serious and unexpected adverse events occurred as defined in the trial protocol. All data presented are preliminary unless a CSR has been issued for the trial referenced.

Human Activity

Three of our drug candidates have shown activity in humans to date.

Prior to 2021, a US Phase 1 trial for Annamycin in AML successfully met its safety endpoint (including the absence of cardiotoxicity) and demonstrated human activity in the reduction of circulating bone marrow blasts despite the trial being conducted at what were expected to be subtherapeutic dosages (not exceeding 120 mg/m 2 ) based on the European AML study.

This US study’s CSR was issued in 2021.

In the final cohort of the European Phase 1 single-agent Annamycin trial, where the RP2D was determined to be 240 mg/m 2 , there was a preliminary objective response rate (ORR) of 60% (three out of five) in subjects receiving a full course of treatment.

In an investigator-initiated trial (IIT) trial of WP1066 (our lead inhibitor of p-STAT3) for the treatment of pediatric brain tumors, both a clinical and an objective response was demonstrated in a patient with diffuse interstitial pontine glioma (DIPG), one of several indications for which WP1066 has been granted a “rare pediatric disease”

designation, which could potentially qualify WP1066 for a priority review voucher upon approval of a New Drug Application (NDA).

The CSR issued in 2021 for a clinical trial of WP1220, another drug candidate in the WP1066 Portfolio, for the topical treatment of cutaneous T-cell lymphoma (CTCL) documented in 60% of subjects (3 out of 5) PR that was confirmed by a subsequent evaluation one month later with one of the subjects having a near total resolution of their lesions (93% decrease).

The median time to PR was 56 days.

Stable disease was the best response documented for remaining 40% of subjects (2 out of 5), resulting in clinical benefit for 100% of subjects.

All subjects (100%) survived up to 112 days of follow-up.

Funding Strategy 

By “internally funded”

we mean that the primary costs of the preclinical activity and clinical trials are funded and sponsored by us.

By “externally funded”

we mean that the preclinical work is performed by external collaborators and for the clinical trials are physician-sponsored or IITs.

For externally funded research, any grant funds that support such preclinical work or clinical trials and most of the associated expenses do not flow through our financial statements.

For externally funded preclinical activities and clinical trials, we do provide drug product and other supporting activities for which costs are shown in our financial statements.

Additionally, we are seeking collaborative partners to further clinical research on all three of our core programs.

Specifically, we have ongoing discussions with potential partners to support a Phase 2 clinical trial of WP1220 in CTCL.

The ultimate course of action depends on the outcome of additional regulatory and preclinical work.

These trials may be internally or externally funded, depending on the timing and nature of the studies.

In summary, we had five clinical trials underway or concluded in 2020 and we now expect up to eight clinical trials to be underway or approved in 2021, including physician-sponsored trials related to our drug candidates for which we are not actively involved.

By "internally funded”

we mean that the primary costs of the preclinical activity and clinical trials are funded by us.

“Externally funded”

drug candidates include those for which preclinical work is performed by external collaborators and for which clinical trials are physician-sponsored.

For externally funded research, any grant funds that support such preclinical work or clinical trials and most of the associated expenses do not flow through our financial statements.

We do provide drug product and other minor supporting activities for externally funded preclinical activities and clinical trials.

We recently announced collaborations with third parties to assist us in developing potential treatments for certain viral diseases, including, potentially, COVID-19.

During 2020, we announced that in vitro testing corroborated the antiviral potential of WP1122, including for the SARS-CoV-2 virus responsible for COVID-19.

Subsequently, we had written discussions with the FDA regarding the clinical development of WP1122 for the treatment of COVID-19.

Based on guidance from the FDA, we believe that we need to demonstrate efficacy in a COVID-19 animal model in order to proceed with an IND for COVID-19 clinical trials in the US.

Therefore, the timing of any such clinical trial activity in the US is subject to the limited access we have to validated in vivo efficacy testing. For this reason, we are also evaluating opportunities to pursue COVID-19 clinical development outside the US. The IND-enabling preclinical work already completed for WP1122 is mostly similar to the preclinical work we originally planned as part of developing WP1122 for cancer indications.

Accordingly, we intend to apply for an IND or its foreign equivalent for WP1122 in either an antiviral or cancer indication, or both, during 2021.

Based on the results of our clinical activity thus far, we have further narrowed our internal development focus to our nearest term opportunities, especially where human activity has been shown in clinical trials.

This focus is primarily on preclinical and clinical activities with Annamycin, preclinical activities associated with an intravenous formulation of WP1066 and IND-enabling studies of WP1122.

We intend to rely on external funding, to the extent available.

Due to the COVID-19 pandemic, we have internally accelerated development of the WP1122 portfolio with a combined effort of internally and externally funded preclinical work to support an IND application with the FDA or an international regulatory body for the treatment of COVID-19 or a cancer indication or both. 

Of our three clinical stage drug candidates, Annamycin is currently in a Phase 1/2 clinical trial for the treatment of acute myeloid leukemia (AML) in Poland.

We recently received clearance from the FDA to proceed with a Phase 1b/2 clinical trial of Annamycin as a potential treatment for soft tissue sarcomas (STS) metastasized to the lungs.

WP1066, an Immune/Transcription Modulator (p-STAT3 inhibitor or, simply, STAT3 inhibitor) is intended to target a wide range of tumors, including brain tumors such as glioblastoma (GBM) and pediatric brain tumors (like diffuse intrinsic pontine glioma, or DIPG, and medulloblastoma), as well as pancreatic cancer.

It is currently in two physician-sponsored Phase 1 clinical trials, one for adult GBM and another for pediatric brain tumors (including DIPG and medulloblastoma).

We began and completed a "proof-of-concept" Phase 1 clinical trial in 2019 in Poland for a third drug, WP1220 (a molecule in the WP1066 portfolio), for the topical treatment of cutaneous T-cell lymphoma (CTCL).

We are actively seeking collaboration with a strategic partner in the near term for external funding for the continued development of WP1220 in a Phase 2 clinical trial as a topical therapy for CTCL.

If we are not successful in this outreach, we may choose to use internal funds to generate additional human data to facilitate such outreach efforts.

We are also engaged in preclinical development of additional drug candidates, including additional Immune/Transcription Modulators, as well as antimetabolites, targeting glycolysis and glycosylation.

We consider Annamycin to be a "next generation" anthracycline, unlike any currently approved anthracyclines, as it is designed to avoid multidrug resistance mechanisms with little to no cardiotoxicity (the efficacy of all currently approved anthracyclines is limited by both multidrug resistance and cardiotoxicity).

We have received an independent expert cardiology assessment confirming the absence of cardiotoxicity in the first 19 patients treated with Annamycin in both our US and European Phase 1 clinical trials.

Annamycin is currently in one Phase 1/2 clinical trial in Europe, and the Phase 1 portion of another Phase 1/2 AML trial in the US has been concluded, subject to final database lock and closure.

The FDA requested that we demonstrate that Annamycin could be safely administered to patients up to the lifetime maximum allowable level of anthracycline (LTMAD) established by the FDA and the trial met this primary endpoint.

The FDA established the LTMAD because of concerns about cardiotoxicity associated with currently approved anthracyclines when administered above the LTMAD.

Of the first 19 patients in our trials, 11 have been treated above the LTMAD (one patient received more than double the LTMAD) and none have shown evidence of any cardiotoxicity.

As a result of discussions with the FDA, we will focus on establishing a recommended Phase 2 dose (RP2D) in our trial in Europe, and, as requested by the FDA, we will generate additional safety and efficacy data.

The trial in Poland is in its fifth cohort, where patients are being treated at 240 mg/m2.

Patient 2 in this cohort experienced a dose limiting toxicity (DLT), related to liver function, secondarily related to concomitant medication not being withheld.

Although that DLT resolved, in accordance with the trial protocol, the cohort was expanded and has now enrolled a total of five patients.

In March 2021, patient 4 in this cohort experienced a similar DLT and, accordingly, no additional patients will be enrolled at this dose level beyond the five patients enrolled to date. The DLT for Patient 4 is being monitored and, per protocol, other patients in this cohort are permitted to continue to receive the full dose of Annamycin, at the discretion of their physicians and with the patients being notified of the reported DLTs. 

We are planning to amend the protocol for this trial to allow exploration of an intermediate dose level between the 210 mg/m2 dose in the fourth cohort and the current 240 mg/m2 dose level, in order to establish the maximum tolerated dosage (MTD) and Recommended Phase 2 dose (RP2D), which may be the same.

While this will establish an MTD for Annamycin in AML and inform the starting dose in our planned trials in soft tissue sarcoma (STS) lung metastases, we do not believe it will limit the dose escalation in our STS trials.

Because of the different indication and differences in dosing regimen, we expect to determine a separate MTD in the Phase 1 portion of the STS trials.

Once the MTD in the single agent AML trial is established, we currently plan to begin the expansion Phase 2 portion of this trial with relapsed patients at the RP2D, in order to determine the potential efficacy of Annamycin as a second line, single agent treatment for relapsed AML.

Following on our preclinical research, we also intend to begin the Phase 1 portion of an AML trial using Annamycin in combination with Ara-C, a drug commonly used as a single agent and in combination chemotherapy for AML.

A preliminary review of the data in the completed cohorts in both trials, which is subject to update, indicates that patients received an average of 3+ and a maximum of 9 prior regimens. Thus far in the completed cohorts of our US and European single agent AML trials, there are 13 relapsed patients who were enrolled after one or more relapses from the prior regimens.

Of these, 38% had either a CRi, PR or Bridge to Transplant. We view this as encouraging, because recruitment in the expansion Phase 2 will be limited to patients with no more than a single relapse. This is in contrast to the Phase 1 portion of the trial, where, in order to accelerate recruitment, we included a majority of patients who were primarily refractory or who had two or more relapses from alternate therapy. We believe this is significant because patients who are either refractory or have had two or more relapses are considered to be less likely to respond to therapy and especially to a single agent therapy. As a result and considering that all patients in Phase 2 will be treated at the RP2D, we believe the overall response in the expansion Phase 2 may be better than the overall response in the Phase 1 portion of the trial, although we cannot be certain that actual results will reflect this.

Our preclinical work on Annamycin demonstrated activity against certain cancers metastasized to the lungs.

In December 2020, we disclosed that the FDA allowed our IND to go into effect to study Annamycin for the treatment of soft tissue sarcoma lung metastases.

This allows us to begin a Phase 1b/2 clinical trial in the U.S.

for patients with soft tissue sarcoma that has metastasized to the lungs after first-line therapy for their disease.

We expect this trial to begin in the first half of 2021.

Later in December 2020, we disclosed that the FDA had granted Orphan Drug Designation (ODD) to Annamycin for the treatment of soft tissue sarcomas, in addition to the existing ODD for Annamycin in relapsed or refractory AML.

On February 2, 2021, we announced that a preclinical study in animals has confirmed a significant therapeutic benefit of Annamycin against metastatic osteosarcoma.

As of day 130 of the study, the survival rate for animals treated with Annamycin was 100%, compared with only 10% for untreated animals.

Computerized tomography scans demonstrated that animals treated with Annamycin exhibited suppression of tumor growth and not a single death was observed in the treated animals, whereas observed tumor burden was believed to have contributed to the rapid death of 90% of untreated animals.

We believe this data is a promising indication of the possibility of Annamycin’s impact on other cancers metastasized to the lungs.

We caution that this is preclinical animal data and we can provide no assurance that we will see similar results in our planned clinical trials.

WP1066 is one of several Immune/Transcription Modulators designed to stimulate the immune response to tumors by inhibiting the errant activity of Regulatory T-Cells (TRegs) while also inhibiting key oncogenic transcription factors, including p-STAT3 (phosphorylated signal transducer and activator of transcription 3), c-Myc (a celluar signal transducer named after a homologous avian virus called Myelocytomatosis) and HIF-1α

(hypoxia inducible factor 1a).

These transcription factors are widely sought targets that are believed to contribute to an increase in cell survival and proliferation, and the angiogenesis (coopting vasculature for blood supply), invasion, metastasis and inflammation associated with tumors.

They may also play a role in the inability of immune checkpoint inhibitors to affect more resistant tumors. WP1066 is currently in two US physician-sponsored Phase 1 trials, one at MD Anderson for the treatment of glioblastoma (GBM) in adults and another at Emory University for the treatment of pediatric brain tumors. 

The trial at MD Anderson is in the fourth and final cohort in the dose escalation phase.

In the first quarter of 2021, we were notified that the physician sponsoring this trial is leaving MDA.

We cannot be assured that this trial will continue at MDA after her departure.

Several additional institutions have expressed an interest in sponsoring similar research on WP1066 in brain tumors, so to help ensure the potential continuation of this important research, regardless of the sponsoring institution, we have requested the IND for this trial to be transferred into our name with the FDA, although we can provide no assurance as to when, or if, this transfer will be completed.

While we are making arrangements to continue this research in additional physician-sponsored trials, we expect that continued research on WP1066 in adult GBM will be temporarily delayed in 2021.

The Emory trial for pediatric brain tumors has now treated three patients in the first cohort.

The third and last patient in the second cohort has begun treatment at the dose level of 6mg/kg.

In that trial, one of the patients in the first cohort with DIPG showed an apparent response to the treatment with both clinical improvement and radiologic reduction of tumor size.

We caution that this is preliminary data, and no conclusions should be drawn from this single event. Another physician-sponsored Phase 1 trial is being considered for the treatment of GBM with WP1066 in combination with radiation, although no assurances can be given that such trial will begin.

We are also developing new compounds designed to exploit the potential uses of inhibitors of glycolysis such as 2-deoxy-D-glucose (2-DG), which we believe may provide an opportunity to cut off the fuel supply of tumors by taking advantage of their high level of dependence on glucose in comparison to healthy cells.

A key drawback to 2-DG is its lack of drug-like properties, including a short circulation time and poor tissue/organ distribution characteristics.

Our lead Metabolism/Glycosylation Inhibitor, WP1122, is a prodrug of 2-DG that appears to improve the drug-like properties of 2-DG by increasing its circulation time and improving tissue/organ distribution.

New research also points to the potential for 2-DG to be capable of enhancing the usefulness of checkpoint inhibitors.

Considering that 2-DG lacks sufficient drug-like properties to be practical in a clinical setting, we believe WP1122 has the opportunity to become an important drug to potentiate existing therapies, including checkpoint inhibitors.

As the COVID-19 pandemic unfolded, several independent research teams identified that 2-DG may have the potential to treat COVID-19, as well as other diseases caused by coronaviruses.

Similar to the dependence of many tumors on glucose, viruses like SARS-CoV-2 are highly dependent on both glycolysis and glycosylation (and, therefore, glucose) in order to successfully invade host cells and proliferate. It is on this basis that we have established an antiviral drug development program focused on WP1122 and its analogs. We are in the process of identifying the best possible pathway to begin a clinical trial in either COVID-19 or cancer patients or both in the first half of 2021.

The spread of COVID-19 has caused significant volatility in US and international markets, including Poland, where we conduct some of our clinical trials, and Italy, where our drug supply is produced.

There has been limited interruption of our drug supply, and most Polish clinics where we are conducting trials are limiting access for monitoring activities, which could delay our ability to collect data and authorize new patient recruitment.

Additionally, we believe COVID-19 has materially slowed the ability of approved sites to recruit patients for our trials.

This could worsen or be alleviated at any time.

Furthermore, there is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, as well as its impact on the US and international economies and, as such, we are unable to determine if it will have a material impact to our operations.

Recently, we have experienced a limited increase in activity with regard to recruitment of new patients in Poland.

Additionally, we believe that the potential for impact to our supply chain due to COVID-19 will be reduced as vaccine production normalizes throughout the industry.

In light of current US trends with respect to COVID-19, we cannot determine whether COVID-19 will materially impact recruitment for current or future US based trials. 

Utilizing our sponsored research, we are further evaluating WP1122 and other molecules in that portfolio (WP1096 and WP1097) for the treatment of COVID-19 and other viruses.

These discussions, unless otherwise described herein, are preliminary.

Working Environment

Our headquarters and laboratory are in Houston, Texas, and our workforce, as of year-end 2021, consisted of twenty-one full and part-time employees, including contractors devoting more than 20 hours per week, in the US and Europe, which are leveraged with other service providers and contractors worldwide working in a primarily virtual environment, even prior to the COVID-19 pandemic.

This number increased to twenty-two in early 2022.

We do not have manufacturing facilities and all manufacturing activities are contracted out to third parties.

Additionally, we do not have a sales organization. Our overall strategy is to seek potential outlicensing opportunities with larger pharmaceutical companies who are better suited for the marketing, sales and distribution of our drugs once approved.

Additionally, we do not have a sales organization.

Our overall strategy is to seek the best value for our shareholders either via potential outlicensing or collaborative opportunities with other pharmaceutical companies with existing marketing, sales and distribution or via the development of contracted marketing, sales and distribution capability if and when our drugs are approved.

The spread of COVID-19 has caused significant volatility in US and international markets, including Poland, where we conduct some of our clinical trials, and Italy, where our drug supply is produced.

There has been limited temporary interruption of our drug supply, and the ability to monitor activities were limited at most Polish clinics where we are conducting trials, which could delay our ability to collect data and authorize new subject recruitment.

Additionally, we believe COVID-19 has materially slowed the ability of approved sites to recruit subjects for our trials in Poland.

Although, the impact of the pandemic appears to be lessened, this continues to be a volatile situation that could continue to improve or worsen at any time.

Furthermore, there is significant uncertainty around the breadth and duration of business disruptions related to COVID-19, including the impact on the US and international economies and, as such, we are therefore unable to determine if those circumstances will have a material impact to our operations.

Additionally, war, terrorism, geopolitical uncertainties (such as the current crisis in Ukraine) and other business interruptions could cause damage to, disrupt or cancel the conduct of our clinical trials on a global or regional basis, which could have a material adverse effect on our business, clinical sites or vendors with which we do business.

Such events could also decrease the availability of subjects interested or able to enroll in our clinical trials or make it difficult or impossible for us to deliver products and services to our clinical investigational sites.

In addition, territorial invasions can lead to cybersecurity attacks on technology companies, such as ours, located outside of the conflict zone.

In the event of prolonged business interruptions due to geopolitical events, we could incur significant losses, require substantial recovery time and experience significant expenditures in order to resume our business or clinical operations.

While having operations in neighboring Poland, we have no operations directly in Russia or Ukraine, but we do not and cannot know if the current uncertainties in these geopolitical areas, which are unfolding in real-time, will escalate and result in broad economic and security conditions or rationing of medical supplies or production facilities, which could limit our ability to conduct clinical trials or result in material implications for our business.

In addition, our insurance policies typically contain a war exclusion of some description and we do not know how our insurers are likely to respond in the event of a loss alleged to have been caused by geopolitical uncertainties.

We cannot determine whether these events will materially impact our overall business and operations, recruitment, and our drug supply in the future.

Mission and Strategy Overview

Moleculin is focused on developing treatments for highly resistant cancers and viruses.

For cancers, these include AML, GBM, CTCL, STS metastasized to the lungs, pancreatic cancer, other vital organ metastases, and others.

With regard to viruses, our current focus is the possible treatment of COVID-19, while additional pre-clinical work has demonstrated possible activity against HIV, Zika, and Dengue fever.

Our diverse pipeline of technologies was built around the recognition that many highly resistant tumors tend to have a common set of traits, including an increase in multidrug resistant mechanisms, an evasion of the natural immune system, a marked upregulation of certain key oncogenic transcription factors and an increased dependence on glycolysis for energy production.

Many of these traits are also common to certain viruses and we believe each of these elements may be addressed by the unique and innovative mechanisms introduced by one or more of our three core technologies. As detailed within, although we have conducted much preclinical and early-stage clinical work that we consider very promising, there is no guarantee that any future study will be conducted or will be successful, or that our product candidates will ultimately be successfully commercialized.

We believe our technologies provide an opportunity to help the many patients in need of alternative therapies, both as single agents and in combination with numerous existing technologies that often fail as tumors present immediate or acquired resistance.

We believe showing even modest improvements in highly resistant cancers and viruses may lead to accelerated approval pathways, potentially reducing the time and capital required to ultimately realize success.

In February 2019, we announced our outlicensing agreement to WPD Pharmaceuticals, an entity associated with one of our co-founders, Dr.

Waldemar Priebe, which was amended in March 2021.

This agreement provides WPD with territorial rights to certain smaller countries in mainly Eastern Europe and Western Asia in exchange for their agreeing to provide $6.5 million or more of funding, either directly or through the guarantees of grants, to our development efforts over the eight-year period commencing with our initial execution of the agreement in February 2019.

WPD recently announced their facilitation of a grant equivalent to $1.5 million USD to the Maria Sklodowska-Curie National Research Institute to fund a Phase 1b/2 clinical trial of Annamycin for the treatment of STS lung metastases. The grant-funded clinical trial will be led by Prof.

Piotr Rutkowski, MD, PhD, Head of Department of Soft Tissue/Bone Sarcoma and Melanoma at the Maria Sklodowska-Curie National Research Institute of Oncology in Warsaw, Poland.

We are a clinical stage pharmaceutical company with a growing pipeline of clinical development programs for the treatment of highly resistant cancers and viruses.

For cancers, these include AML, GBM, STS lung metastases, pancreatic cancer, CTCL, other vital organ metastases, and others.

With regard to viruses, our current focus is the possible treatment of COVID-19, its variants and potential future coronaviruses, while additional preclinical work has demonstrated possible activity against HIV, Zika, and Dengue fever.

Our diverse pipeline of technologies was built around the recognition that many highly resistant tumors tend to have a common set of traits, including an increase in multidrug resistance mechanisms, an evasion of the natural immune system, a marked upregulation of certain key oncogenic transcription factors and an increased dependence on glycolysis for energy production.

As detailed within, although we have conducted a significant amount of preclinical and early-stage clinical work that we consider promising, there is no guarantee that any future study will be conducted or will be successful, or that our product candidates, if approved, will ultimately be successfully commercialized.

We believe our technologies may provide an opportunity to help the many patients in need of alternative therapies, both as single agents and in combination with numerous existing technologies that often fail as tumors present immediate or acquired resistance.

We believe showing even modest improvements in highly resistant cancers and viruses may lead to approval pathways that may potentially reduce the time and capital required to ultimately realize success.

Our technology is licensed from MD Anderson via exclusive licenses, which are discussed in more detail below.

In February 2019, we announced our sublicensing agreement to WPD Pharmaceuticals (WPD), an entity associated with one of our cofounders and the chair of our science advisory board, Dr.

Waldemar Priebe.

WPD recently announced their facilitation of a grant equivalent to $1.5 million to the Maria Sklodowska-Curie National Research Institute of Oncology (MSCNRIO) to fund a Phase 1b/2 clinical trial of Annamycin for the treatment of STS lung metastases.

The grant-funded clinical trial is led by Prof.

Piotr Rutkowski, MD, PhD, Head of Department of Soft Tissue/Bone Sarcoma and Melanoma at the MSCNRIO in Warsaw, Poland.

As we continue to generate additional human data, we intend to pursue additional strategic collaborations on a regional basis for each of our drug candidates.

This increase in potential outside funding should allow us to concentrate our internal resources primarily on Annamycin, and our active p-STAT3 inhibitors, WP1066 and WP1220.

This allows us to prioritize our internal funding to core clinical trials that we think may lead to an accelerated approval pathway and/or a strategic licensing opportunity.

Accordingly, we have increased our focus on clinical trial pathways for Annamycin, WP1066 and WP1220.

We have now seen human activity in these three drug candidates that we think is capable of supporting an accelerated approval pathway with continued positive developments in the respective clinical trials.

We are also committed to spending on the WP1122 program to potentially enable a cancer and/or a COVID-19 related IND.

Intellectual Property 

Drug development –

from discovery to approved drug –

can take decades.

With this in mind, and in light of the fact that US patent terms begin on the date of filing and run for 20 years, alternative means of establishing market exclusivity are common in the drug development industry.

Orphan Drug designation (ODD) from the FDA is available for drugs targeting diseases with less than 200,000 cases per year in the United States.

A drug that is approved for an orphan-designated indication may receive market exclusivity of 7 years from the date of approval of the New Drug Application (NDA).

During that period the FDA generally could not approve another product containing the same active moiety for the same orphan-designated indication.

Orphan Drug Exclusivity (ODE) will not bar approval of a product with a different active moiety for the same indication or a product with the same moiety for a different indication.

Additionally, ODE will not preclude FDA approval of another product with the same moiety for the same orphan-designated indication under certain circumstances, including if the subsequent product is shown to be clinically superior to the approved product on the basis of greater efficacy or safety, or providing a major contribution to patient care, or if the company with orphan drug exclusivity is not able to meet market demand.

ODD and ODE are also available from the European Union (EU).

ODD in the EU is generally available for drug products intended to treat life-threatening or chronically debilitating conditions affecting not more than five in 10,000 persons in the EU when the application is made.

If the orphan-designated product continues to meet the criteria for orphan designation at approval, the approval for an orphan-designated indication conveys a 10-year exclusivity period, during which the competent authorities in the EU may not accept another marketing authorization application and may not grant another marketing authorization for a similar medicinal product (i.e., a medicinal product with an identical active substance, or an active substance with the same principal molecular structural features and acts via the same mechanisms) for the same therapeutic indication.

The 10-year period can be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for the ODD, for example because the product is sufficiently profitable not to justify market exclusivity.

In the EU, ODE does not preclude granting a marketing authorization for a similar medicinal product for the same therapeutic indication, if that medicinal product is demonstrated to be safer, more effective or otherwise clinically superior, or if the company with orphan drug exclusivity is unable to supply sufficient quantities of the product.

Independently from potential patent protection, in 2018 we received ODD from the FDA for Annamycin for the treatment of AML and, in 2019 we received FDA ODD for WP1066 for the treatment of glioblastoma.

Separately, the FDA may also grant market exclusivity of 5 years for newly approved new chemical entities (which we believe our drug candidates will be considered to be), which would for a period of time preclude submission of any Abbreviated New Drug Application (ANDA) for a generic version of the product or any 505(b)(2) NDA for a product with the same active moiety that seeks to rely on its similarity to our product for an abbreviated approval pathway, as well as delay approval of such applications.

There can be no assurance that such exclusivity will be granted, nor does the exclusivity, if granted, block approval of a “full”

NDA (i.e., an NDA that does not rely on similarity to our product) for a competing product.

Furthermore, we were granted Fast Track Designation for Annamycin for the treatment of relapsed or refractory AML in April 2019 by the FDA.

Fast Track Designation, which is intended to expedite drug development and approval, is granted to drugs intended to treat serious conditions, where data demonstrate the potential to address an unmet medical need.

We have been granted royalty-bearing, worldwide, exclusive licenses for the patent and technology rights related to all three of our drug technologies, as these patent rights are owned by MD Anderson.

The Annamycin drug substance is no longer covered by any original patent protection, however in June 2019, we submitted new provisional patent applications derived from the Patent Cooperation Treaty or PCT for synthetic processes for lyophilized Annamycin and for reconstitution of our Annamycin drug product candidate.

If the non-provisional patent applications and subsequent PCT applications are approved, for which we can provide no assurance, this would potentially provide patent protection for Annamycin through June 2040.

The US patents we license from MD Anderson that have been granted expire from 2024 to 2029.

MD Anderson manages the patent process related to the technology subject to our license agreements worldwide with advice from and funded by us, according to the license agreements.

Additional patents pending, including licenses being negotiated in the ordinary course of business and currently licensed from MD Anderson, may provide additional potential protection to our drug portfolio, however we can provide no assurance that such patents or additional licenses will be granted or with regard to the extent of protection they might provide.

Our Drug Candidates

One of our lead product candidates is Annamycin, for which FDA allowed an IND to go into effect for a Phase 1/2 trial for the treatment of relapsed or refractory AML and granted Orphan Drug Designation for the treatment of AML, which means the agency believes we have established a medically plausible basis for using the drug for AML.

We recently concluded the Phase 1 portion of the US clinical trial and a similar Phase 1/2 trial in Europe continues and is in its fifth cohort.

We are planning a potential pivotal Phase 2 AML trial once sufficient clinical data is established in this European trial. Based on new research findings resulting from our sponsored research at MD Anderson, we are also preparing to begin an AML clinical trial in Europe for the combination of Annamycin and Ara-C, as well as clinical trials in both the US and EU (with the EU trial being physician-sponsored) for the treatment of soft tissue sarcoma lung metastases with Annamycin as a single agent.

Additionally, we are independently exploring other grant funded opportunities.

This increase in potential outside funding should allow us to concentrate our internal resources primarily on Annamycin, WP1122, and alternate methods of delivery for WP1066.

This allows us to prioritize our internal funding to core clinical trials that we think may lead to an approval pathway and/or a strategic licensing opportunity.

Accordingly, we have increased our focus on clinical trial pathways for Annamycin, which is now in clinical trials for two different indications.

We have now seen human activity in three drug candidates, some of which that we think are capable of supporting an approval pathway with continued positive developments in their respective clinical trials.

We continue to internally fund our WP1122 antiviral program, as we now have an approved CTA for a Phase 1 clinical trial intended to establish an RP2D, however the volatility and unpredictability of COVID-19 incidence in various countries may limit our ability to recruit certain subjects and could make it infeasible for us to conduct a Phase 2 clinical trial on a timely basis, or at all. In addition, the FDA recently cleared an IND for the study of WP1122 in GBM and we intend to identify investigators interested in collaborating on the potential oncology indications for this drug candidate.

Intellectual Property

We have obtained worldwide, exclusive licenses from MD Anderson Cancer Center (MD Anderson) to issued US patents and pending US patent applications for each of our drug candidates, as well as pending foreign patent applications or issued foreign patents.

With respect to certain patents or patent applications, we are co-owners with MD Anderson, in which instances we have exclusively licensed MD Anderson’s rights in those patents or patent applications.

Where MD Anderson has sole ownership of patents licensed to us, MD Anderson is responsible for the prosecution and maintenance of those patent applications, with input from us and at our expense.

Where MD Anderson jointly owns patent applications with us, we are responsible for prosecution and maintenance of those patents and patent applications at our expense.

As new discoveries arise with respect to our drug candidates, we and MD Anderson seek to protect our rights to those inventions by filing new patent applications.

There can be no assurance that patent applications will issue as patents or, with respect to issued patents, that they will provide us with significant protection.

Issued patents generally expire 20 years after their filing date, subject to adjustment or extension under certain circumstances.

For instance, the expiration of US patents may be adjusted to account for prosecution delays, if any, by the United States Patent and Trademark Office (USPTO).

Some jurisdictions, including the US and countries belonging to the European Patent Convention, will extend the expiration of an unexpired patent for an approved pharmaceutical product by some portion of time required for clinical development and regulatory review.

We intend to seek patent term extensions for patents for our product candidates where available.

In addition, certain pharmaceutical regulatory bodies, including the US FDA and the European Medicines Agency (EMA), provide some period of exclusivity for new pharmaceutical products independent of patent protection.

In the US, regulatory exclusivity can range from three (3) years for a product with a previously approved active pharmaceutical ingredient to seven (7) years for a novel product designated as an Orphan Drug.

We have obtained Orphan Drug designation (ODD) from the FDA for Annamycin for the treatment of AML and intend to seek ODD for Annamycin and other product candidates for other orphan diseases for which we seek to develop these drugs.

The following provides a general description of our patent portfolio and is not intended to represent an assessment of claim limitations or claim scope.

We have pending patent applications directed to the synthetic processes for lyophilized Annamycin and for reconstitution of our Annamycin drug product candidate.

We have exclusively licensed MD Anderson’s rights in these applications, which are co-owned by MD Anderson and us.

The applications are pending in jurisdictions worldwide, including but not limited to Australia, Brazil, Canada, China, European Patent Organization, Japan and the US Both applications have a filing date of June 25, 2020.

We also have rights to a patent application, filed on November 23, 2020, directed to the use of Annamycin for the treatment of certain lung cancers.

p-STAT3 Inhibitors

We have rights to four issued US patents for WP1066.

These patents claim WP1066 and other molecules, as well as methods of treating disease using WP1066.

Foreign counterparts to the US patents are issued in Canada, Europe, Israel, India, Japan and South Korea.

These patents have an international filing date in December 2004, and in certain instances have had the patent term adjusted.

We also have rights to a patent application directed to the combination of WP1066 with checkpoint inhibitors.

We have rights to three issued US patents which claim compositions of WP1220, as well as foreign counterparts issued in China, Eurasia, Europe, Japan, Mexico, New Zealand, Singapore and Ukraine.

These patents have an international filing date in June 2009.

In addition, we have rights to an issued US patent for the treatment of skin disorders using WP1220, with a filing date in September 2009.

We have rights to an issued US patent with claims to compositions of WP1122 and methods for treating cancer using WP1122, with an international filing date in June 2009.

We also have rights to foreign counterparts issued in China, Europe, and Japan.

In addition, we have rights to US and foreign patent applications directed to the treatment of viral diseases with WP1122 and other anti-metabolites including WP1096 and WP1097, with a filing date in March 2021.

Our Drug Candidate Programs

Annamycin Program

We consider Annamycin to be a "next generation" anthracycline, unlike any currently approved anthracyclines, as it is designed to avoid multidrug resistance mechanisms and cardiotoxicity (the efficacy of all currently approved anthracyclines is limited by both multidrug resistance and cardiotoxicity).

Our preclinical studies support this intended design and, to date, we have demonstrated no signs of cardiotoxicity in our three Phase 1 clinical trials utilizing Annamycin as assessed, as recently as January 2022, by an expert in cardiotoxicity associated with chemotherapy at the Cleveland Clinic.

Additionally, we reported from our clinical trials evidence that Annamycin may have a substantially lower incidence of alopecia (hair loss) than currently prescribed anthracyclines such as doxorubicin.

The FDA granted Orphan Drug Designation (ODD) to Annamycin for the treatment of AML and for soft tissue sarcomas, which means the agency believes we have established a medically plausible basis for using the drug for those indications.

Additionally, Fast Track Designation was also granted by the FDA for Annamycin for both the treatment of AML and STS lung metastases.

A drug that receives Fast Track designation is eligible for some or all of the following:

More frequent meetings with FDA to discuss the drug's development plan and ensure collection of appropriate data needed to support drug approval;

More frequent written communication from FDA about such things as the design of the proposed clinical trials and use of biomarkers;

Eligibility for other FDA expedited programs, if relevant criteria are met;

New Drug Application (NDA) for review by FDA, rather than waiting until every section of the NDA is completed before the entire application can be reviewed.

NDA review usually does not begin until the sponsor has submitted the entire application to the FDA

A Phase 1 clinical trial of Annamycin as a single agent for the treatment of relapsed and refractory (R/R) AML in the US was successfully concluded in 2020.

The FDA requested that we demonstrate that Annamycin could be safely administered to subjects up to the lifetime maximum allowable level of anthracycline (LTMAD) established by the FDA and the trial met this primary endpoint.

The FDA established the LTMAD because of concerns about cardiotoxicity associated with currently approved anthracyclines when administered above the LTMAD.

An updated independent safety review in early 2022 of certain preliminary data of the first 30 subjects in our three Annamycin clinical trials (treating both AML and STS lung metastases) concluded there was no evidence of cardiotoxicity.

19 of the 30 subjects evaluated had been treated above the LTMAD and none have shown evidence of any cardiotoxicity.

As a result of discussions with the FDA, we focused our continuing efforts on establishing an RP2D for Annamycin in our Phase 1/2 single agent R/R AML clinical trial Europe, which was ongoing throughout 2021.

In February 2022, we successfully concluded the Phase 1 portion of that trial and established the RP2D of 240 mg/m 2 .

In that trial we continue to demonstrate no signs in cardiotoxicity in subjects treated.

In the final cohort , five subjects received a full course of Annamycin and demonstrated an ORR of 60% with two partial responses (PRs) and one complete response with incomplete recovery of neutrophils and/or platelets (CRi). In light of recent preclinical research suggesting that the combination of Annamycin with Cytarabine (AnnAraC) may be more effective for R/R AML patients than Annamycin as a single agent, we have elected to begin the process of commencing a Phase 1/2 clinical trial in Europe evaluating AnnAraC rather than to expend resources on the expansion (Phase 2) arm of the single agent trial. 

These preclinical animal studies showed that AnnAraC was 68% more effective (median overall survival or OS) than Annamycin as a single agent and 241% more effective than Cytarabine (also known as Ara-C) alone.

Accordingly, we filed a CTA with the URPL in Poland in November 2021 for a Phase 1/2 trial treating AML with AnnAraC and received approval in December 2021 from the Bioethics Committee of the Medical University of Karol Marcinkiewicz in Poznań

(Ethics Committee).

We are in correspondence with the URPL and expect to receive their approval and to begin this trial in the first half of 2022.

We can provide no assurance that such approval will be received.

We received clearance from the FDA to proceed with a Phase 1b/2 clinical trial of Annamycin as a potential treatment for soft tissue sarcomas (STS) metastasized to the lungs.

Our preclinical work on Annamycin demonstrated activity against certain cancers (including STS) metastasized to the lungs.

In December 2020, the FDA allowed our IND to go into effect to study Annamycin for the treatment of soft tissue sarcoma lung metastases.

This allowed us to begin a Phase 1b/2 clinical trial in the US for patients with STS lung metastases after first-line therapy for their disease.

The trial began in the first half of 2021.

In December 2021, we reported preliminary interim results from this clinical trial as we concluded the safety review of the third cohort and opened the fourth cohort in a dose escalation trial, which continues to document preliminary clinical activity for this drug.

We are currently in the fourth cohort and have expanded the cohort due to a dose limiting toxicity (DLT).

The first three subjects in this cohort preliminarily exhibited stable disease per the protocol after two cycles and continued in the study.

Due to the DLT, the fourth cohort is being expanded to enroll an additional three subjects at this dose level. In the absence of any additional DLTs at this dose level, we have the option to continue escalation to explore the fifth cohort at 450 mg/m 2 dose level or to declare the RP2D to be 390 mg/m 2 .

Additionally, we announced in February 2021 promising preclinical studies involving Annamycin targeting osteosarcoma metastasized to the lungs.

Via our sponsored research, we plan to further investigate the treatment of other cancer metastases and other cancers such as liver, colorectal, and pancreatic cancers among others.

Prior Development

We took over the development of Annamycin after two prior drug development companies, Callisto Pharmaceuticals and Aronex Pharmaceuticals, ceased development work for various clinical and business reasons, leading to the termination of the INDs by the FDA.

The basis for our decision to proceed notwithstanding the most recent prior developer’s abandoning the project is that we believe the actual clinical data as reported by Dr.

Robert Shepard, our Chief Medical Officer and the prior developer’s Chief Medical Officer at the time of the clinical trials, to the 2009 Annual Meeting of the American Society of Clinical Oncology, and as further reported by the Principal Investigators of the clinical trials in a peer-reviewed journal article (Clin Lymphoma Myeloma Leuk.

doi:10.1016/j.clml.2013.03.015.), supports further clinical evaluation.

The basis for our decision to proceed notwithstanding the most recent prior developer’s abandoning the project is that we believed the actual clinical data as reported by Dr.

Robert Shepard, our Chief Medical Officer and the prior developer’s Chief Medical Officer at the time of the clinical trials, to the 2009 Annual Meeting of the American Society of Clinical Oncology (ASCO), and as further reported by the Principal Investigators of the clinical trials in a peer-reviewed journal article (Clin Lymphoma Myeloma Leuk.

doi:10.1016/j.clml.2013.03.015.), supported further clinical evaluation.

In addition, the conclusion published in the 2013 Clinical Lymphoma, Myeloma & Leukemia Journal article was that “Single agent nanomolecular liposomal annamycin appears to be well-tolerated and (demonstrates) evidence of clinical activity as a single agent in refractory adult ALL.”

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Hematologic improvement was defined as for CR but platelet count of ≥1×10 9 /L.”

The summary of patient response from the 2013 journal article reads:

The summary of subject response from the 2013 journal article reads:

“After determining the MTD, a 10-patient phase IIA was conducted.

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When Callisto acquired the technology and made changes in manufacturing methods, they had to conduct another Phase 1 dose ranging trial.

Unexpectedly, that trial yielded a significantly different result than the Aronex trial.

The Aronex trial started at 190 mg/m 2 , which was expected to be, and in fact was, sub-therapeutic.

In accordance with the dose-ranging protocol, dosing was then increased until it reached 350 mg/m 2 , where DLTs (dose limiting toxicities) forced a de-escalation back to an MTD (maximum tolerated dose) of 280 mg/m 2 .

Although the Callisto trial restarted at the same 190 mg/m 2 starting dose used in the Aronex trial, there were immediate instances of DLTs (mucositis), causing the dosing to be reduced instead of escalated.

Ultimately, the Callisto trial settled on 150 mg/m 2 as the MTD where, during the expansion (Phase 2a) portion of the trial, therapeutic activity was noted.

Both trials yielded some human activity with Annamycin in AML but at different MTDs.

We believe the different MTDs were due to subtle differences in the manufacturing and reconstitution processes of Aronex and Callisto, mainly regarding liposomes.

The production of liposome formulated anthracyclines is very sensitive to subtle changes in production method and starting materials.

It is partly for this reason that, more than 10 years later and with entirely new contractors, we had to run yet another Phase 1 dose ranging study. 

It is partly for this reason that, more than 10 years later and with entirely new contractors, we had to run additional Phase 1 dose ranging studies and the technology we assisted in developing yielded additional new patent applications for formulation and reconstitution of Annamycin.

The Importance of No Cardiotoxicity

We have received an independent expert cardiology assessment confirming the absence of cardiotoxicity in the first 19 patients treated with Annamycin in both our US and European Phase 1 clinical trials.

We have received multiple reports from an independent expert cardiology assessment and the last such report in January 2022 continued to confirm the absence of any cardiotoxicity relating to treatment with Annamycin in our three Phase 1 clinical trials to date.

That report updated the independent safety review of certain preliminary data for the first 30 subjects in our clinical trials in the US and Europe with Annamycin targeting AML and the STS lung metastases which concluded there was no evidence of cardiotoxicity.

The review included analysis of ejection fraction, echo strain and certain troponin levels intended to assess the potential for both acute and chronic heart damage.

Additionally, we reported evidence that Annamycin may have a substantially lower incidence of alopecia (hair loss) than currently prescribed anthracyclines such as doxorubicin.

Although 65%-92% of subjects treated with doxorubicin typically experience hair loss, the incidence to date in subjects treated with Annamycin is less than 10% (Gonzalez et al.

DOXORUBICIN HYDROCHLORIDE -package insert.

New York, NJ:

Pfizer Injectables;

Alopecia is considered an important factor in quality of life for many cancer patients.

Chemotherapy continues to be a cornerstone of cancer therapy.

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We believe Annamycin may significantly reduce the impact of these two factors.

If early human data from the clinical activity thus far is borne out, of which there is no assurance, Annamycin may ultimately provide clinically meaningful benefits over currently approved anthracyclines in treating certain cancers.

If early human data from the clinical activity thus far are borne out, of which there can be no assurance, Annamycin may ultimately provide clinically meaningful benefits over currently approved anthracyclines in treating certain cancers.

Preliminary data from very early-stage clinical trials suggest acute leukemia as a potentially opportune indication in which to further study Annamycin.

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In the animal model recommended by the FDA as an indicator of human cardiotoxicity, the non-liposomal (free) form of Annamycin has been shown to be significantly less likely than doxorubicin to create heart lesions in mice, and the liposomal formulation (L-Annamycin) has been shown in these same models to have reduced cardiotoxicity to the point where it is unlikely to cause harm to human patients.

If this characteristic is shown to be the same in humans, it may allow Annamycin to be used more aggressively to help patients achieve remission.

If this same characteristic continues to be shown in humans, it may allow Annamycin to be used more aggressively to help patients achieve remission.

This would be especially valuable in the case of pediatric acute leukemia (both AML and ALL) because of the potential impact of cardiotoxicity on long-term survival.

In our current Phase 1/2 trial for Annamycin, we are collecting data to further validate the design intent of Annamycin to have little or no cardiotoxicity.

In our clinical trials for Annamycin, we are collecting data to further validate the design intent of Annamycin to have little or no cardiotoxicity.

Unless otherwise noted, all of our references to Annamycin refer to the liposomal form (L-Annamycin).

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A laboratory study has suggested that Annamycin may resist being expelled by P-glycoprotein pumps and similar multidrug resistance transporters, which may mean the drug circumvents multidrug resistance.

This characteristic has been shown in pre-clinical testing to allow for higher drug uptake in diseased cells, which we believe could allow for more effective induction therapy with less risk to the patient, especially in relapsed patients.

Additionally, preclinical research in animal models at MD Anderson demonstrated that Annamycin is able to significantly improve survival in an aggressive form of triple negative breast cancer metastasized to the lungs in animal models.

Coupled with research in animal models demonstrating that Annamycin is capable of accumulating in the lungs at very high levels, this suggests that Annamycin may be well suited to become a treatment for lung-localized tumors.

In all instances, it will be important to develop additional clinical data regarding the early indications from preclinical and early clinical data, as discussed below.

This characteristic has been shown in pre-clinical testing to allow for higher drug uptake in diseased cells, which we believe could allow for more effective induction therapy with less risk to the patient, especially in relapsed patients.

Annamycin as a Single Agent in AML

The prior development history of Annamycin in acute leukemia suggests that a possible accelerated approval pathway exists by positioning Annamycin as a single agent for the treatment of relapsed or refractory AML. Notwithstanding the recent approval of multiple drugs for this indication, most of these drugs are targeted therapies that are helpful to only a small percentage of the overall AML patient population. A significant unmet need still exists for those patients that are refractory to or relapse from the traditional first-line induction therapy (known as “7+3”) designed to induce remission of AML and, in some cases, prepare patients for a curative bone marrow transplant. Unfortunately, the majority of AML patients do not respond adequately to the current first line therapies. In addition, approximately 40% of AML patients are deemed “unfit”

for 7+3 due to the intensity of this chemotherapy. We estimate that a significant portion of those patients are deemed unfit because of the potential for cardiotoxicity inherent in the anthracyclines currently used in 7+3. Given its lack of cardiotoxicity, single agent Annamycin may also provide a viable treatment alternative for such patients.

Annamycin in Combination with Ara-C in AML

As a part of our ongoing sponsored research at MD Anderson, animal testing has indicated that the combination of Annamycin with Ara-C provides a synergistic effect that is more effective in AML mouse models than either drug alone. The data was presented at the 62nd Annual Meeting & Exposition of the American Society for Hematology (ASH) under the title:

The prior development history of Annamycin in acute leukemia suggested that a possible approval pathway exists by positioning Annamycin as a single agent for the treatment of R/R AML.

Notwithstanding the recent approval of multiple drugs for this indication, most of these drugs are targeted therapies that are helpful to only a small percentage of the overall AML patient population.

A significant unmet need still exists for those patients that are refractory to or relapse from the traditional first-line induction therapy (known as “7+3”) designed to induce remission of AML and, in some cases, prepare patients for a curative bone marrow transplant.

Unfortunately, the majority of AML patients do not respond adequately to the current first-line therapies.

In addition, approximately 40% of AML patients are deemed “unfit”

for 7+3 due to the intensity of this chemotherapy.

We estimate that a significant portion of those patients are deemed unfit because of the potential for cardiotoxicity inherent in the anthracyclines currently used in 7+3.

Given its lack of cardiotoxicity, single agent Annamycin may also provide a viable treatment alternative for such patients.

Hence our initial clinical trials in R/R AML, as discussed more fully below, were focused on Annamycin as a single agent, and establishing an RP2D, which we were able to establish in early 2022.

Annamycin in Combination with Cytarabine (also known as Ara-C) in AML

As a part of our ongoing sponsored research at MD Anderson, animal testing has indicated that the combination of Annamycin with Ara-C (AnnAraC) provides a synergistic effect that is more effective in AML mouse models than either drug alone.

These data were presented at the 62nd Annual Meeting & Exposition of the American Society for Hematology (ASH) under the title:

"High Efficacy of Liposomal Annamycin (L-ANN) in Combination with Cytarabine in Syngeneic p53-null AML Mouse Model."

This study was conducted in a highly aggressive AML mouse model where median survival is approximately 13 days. For animals treated with the combination of Annamycin and Ara-C, median survival ranged from 56 to 76 days, thus expanding median survival by 585%, with some animals being completely cured. We believe these experiments support initiation of clinical development of the combination of Annamycin and Ara-C in AML patients.

Although Annamycin has already shown human activity as a single agent in its two Phase 1 AML clinical trials, including one complete response, and has shown no signs of cardiotoxicity, unlike other anthracyclines, it now appears, based on the observed synergy in vitro and confirmatory in vivo data, that the combination of Annamycin and Ara-C could be more effective in a clinical setting than Annamycin as a single agent. This would be consistent with current practice to use Ara-C in combination with an anthracycline like Annamycin.

The current first-line therapy for AML patients is the combination of an anthracycline and Ara-C in a regimen referred to as "7+3" where Ara-C is administered daily for 7 days in parallel with 3 daily doses of an anthracycline. Simply substituting the currently used anthracycline in a similar 7+3 regimen with Annamycin would represent a familiar and well-practiced treatment modality. Beyond that, we believe it would have the added advantages that Annamycin has been shown in published research to be active against tumor cells resistant to doxorubicin and, importantly, has the potential to remove the concern for cardiotoxicity, a significant toxic side effect of currently used anthracyclines.

This study was conducted in a highly aggressive AML mouse model where median survival is approximately 13 days.

For animals treated with AnnAraC, median survival ranged from 56 to 76 days, thus expanding median survival by 585%, with some animals, after treatment, having no signs of any tumors. Additionally, when looking at median overall survival (OS), AnnAraC demonstrated a 68% improvement in the OS compared to Annamycin as a single agent and a 241% increase in OS compared to Cytarabine alone.

We believe these experiments support initiation of clinical development of the combination of Annamycin and Ara-C in AML patients.

Although Annamycin has already shown human activity as a single agent in its two Phase 1 AML clinical trials and has shown no signs of cardiotoxicity, the observed synergy in vitro and confirmatory in vivo data suggest that the combination of Annamycin and Ara-C could be more effective in a clinical setting than Annamycin as a single agent.

This would be consistent with current practice to use Ara-C in combination with an anthracycline like Annamycin.

Simply substituting the currently used anthracycline in a similar 7+3 regimen with Annamycin would represent a familiar and well-practiced treatment modality.

Beyond that, we believe it would have the added advantages that Annamycin has been shown in published research to be active against tumor cells resistant to doxorubicin and, importantly, has the potential to remove the concern for cardiotoxicity, a significant toxic side effect of currently used anthracyclines.

Thus, we are now focusing our efforts on an AnnAraC trial for the treatment of AML in Europe in the first half of 2022.

Annamycin as a Single Agent in STS Lung Metastases

Moleculin recently announced that Annamycin demonstrates consistently high antitumor activity in vivo in all tested animal models of different types of lung-localized cancers, including sarcoma.

These promising findings correlate with surprisingly high uptake of Annamycin to the lungs in animal models.

We found in our studies that the Annamycin uptake is over 30-fold higher than that of doxorubicin, the primary first-line chemotherapy for soft tissue sarcoma (STS). The limited pulmonary uptake of doxorubicin in animal models may help explain its lack of activity against STS lung metastases in humans. Additionally, our clinical data to date show no cardiotoxicity associated with the use of Annamycin, and the published research demonstrate Annamycin’s ability to avoid multidrug resistance mechanisms, both of which are often treatment-limiting effects of anthracyclines (which includes doxorubicin) in this setting. Taken together, these factors suggest that Annamycin could represent an important treatment to help address a significant unmet need in patients with STS lung metastases.

We announced in April 2019 that our ongoing sponsored research at MD Anderson demonstrated that Annamycin is able to significantly improve survival in an aggressive form of triple negative breast cancer metastasized to the lungs in animal models.

We announced in April 2019 that our ongoing sponsored research at MD Anderson demonstrated that Annamycin can significantly improve survival in an aggressive form of triple negative breast cancer metastasized to the lungs in animal models.

We know that Annamycin was previously shown to be significantly more potent than doxorubicin in both Lewis lung carcinoma in vivo and small cell lung cancer in vitro models.

In addition to seeing activity in animal models of triple negative breast cancer metastasized to the lungs, we are also seeing activity in colon cancer metastasized to the lungs.

The particular animal models used in our testing are considered to represent a very aggressive forms of cancer.

We believe our success in increasing the survival rate in mice with these tumor models in combination with the previously observed high uptake of Annamycin by the lungs is a promising indication that supports additional clinical research in lung and metastatic lung cancers.

The particular animal models used in our testing are considered to represent very aggressive forms of cancer.

Furthermore, a poster entitled, "Liposomal annamycin inhibition of lung localized breast cancer," was presented at the San Antonio Breast Cancer Symposium held in December 2019.

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It should also be noted that treatment with Annamycin resulted in long-term survival of a significant number of animals, even when cancer was reintroduced into the animals post initial treatment, suggesting the development of beneficial immune memory.

A reduction in tumor growth was demonstrated and also a reversal of tumor activity resulting in an almost complete reduction of tumor burden.

On February 2, 2021, we announced that a preclinical study in animals has confirmed a significant therapeutic benefit of Annamycin against metastatic osteosarcoma.

A reduction in tumor growth was demonstrated as well as a reversal of tumor activity resulting in an almost complete reduction of tumor burden.

We announced in early 2021 that Annamycin demonstrated consistently high antitumor activity in vivo in tested animal models of different types of lung-localized cancers, including sarcoma.

These promising findings correlate with surprisingly high uptake of Annamycin to the lungs in animal models.

We found in our studies that the Annamycin uptake is over 30-fold higher than that of doxorubicin, the primary first-line chemotherapy for soft tissue sarcoma. The limited pulmonary uptake of doxorubicin in animal models may help explain its limited activity against STS lung metastases in humans. Additionally, our clinical data to date show no cardiotoxicity associated with the use of Annamycin, and the published research demonstrate Annamycin’s ability to avoid multidrug resistance mechanisms, both of which are often treatment-limiting effects of anthracyclines (which includes doxorubicin) in this setting. Taken together, these factors suggest that Annamycin could represent an important treatment to help address a significant unmet need in patients with STS lung metastases.

In February 2021, we announced that a preclinical study in animals has confirmed a significant therapeutic benefit of Annamycin against metastatic osteosarcoma.

As of day 130 of the study, the survival rate for animals treated with Annamycin was 100%, compared with only 10% for untreated animals.

We believe this data is a promising indication of the possibility of Annamycin’s impact on other cancers metastasized to the lungs.

We caution that this is preclinical animal data and we can provide no assurance that we will see similar results in our planned clinical trials.

It is estimated that there are approximately 36,000 new cases of STS in the seven major markets (US, EU5 and Japan) each year. Our clinical advisors estimate that approximately half of all STS patients will eventually develop lung metastases from their primary tumor. Although first-line treatments such as surgical resection, chemotherapy and radiation may provide initial therapeutic benefit for approximately one third of those patients, there are no approved or emerging second-line therapies for the remaining patients who relapse or are refractory. Although the lungs tend to be a major site of relapse, we are aware of only 2 active clinical trials specifically targeting STS lung metastases, indicating that Annamycin currently faces limited competition in this area of development.

Along with the results in STS lung metastases, our animal models have shown activity in other lung metastases, including osteosarcoma, colorectal and triple negative breast cancer, as well as meaningful concentration levels of Annamycin in the liver, spleen and pancreas. Additionally, when tested in a highly aggressive AML mouse model, Annamycin significantly reduced tumor burden in the spleen, lungs and liver, leading to an increase in survival. Based on this promising preclinical data, we believe the ultimate market opportunity for Annamycin could be much larger than just STS lung metastases. 

We believe these data are a promising indication of the possibility of Annamycin’s impact on other cancers metastasized to the lungs.

We caution that these are preclinical animal data and we can provide no assurance that we will see similar results in our clinical trials.

It is estimated that there are approximately 36,000 new cases of STS in the seven major markets (US, EU5 and Japan) each year. Our clinical advisors estimate that approximately half of all STS patients will eventually develop lung metastases from their primary tumor. Although first-line treatments such as surgical resection, chemotherapy and radiation may provide initial therapeutic benefit for approximately one third of those patients, there are no approved or emerging second-line therapies for the remaining patients who relapse or are refractory. Although the lungs tend to be a major site of relapse, when we began our own clinical trial using Annamycin against STS lung metastases, we were aware of only two active clinical trials specifically targeting STS lung metastases, indicating that Annamycin currently faces limited competition in this area of development.

Along with the results in STS lung metastases, our animal models have shown activity in other lung metastases, including osteosarcoma, colorectal and triple negative breast cancer, as well as meaningful concentration levels of Annamycin in the liver, spleen and pancreas. Additionally, when tested in a highly aggressive AML mouse model, Annamycin significantly reduced tumor burden in the spleen, lungs and liver, leading to an increase in survival. Based on these promising preclinical data, we believe the ultimate market opportunity for Annamycin could be larger than just STS lung metastases. As such, we may expand our clinical trials into these areas in the near term using externally funded trials.

Clinical Trials for Annamycin  

In 2021, we expect Annamycin will be studied for the treatment of AML and STS metastasized to the lungs in a total of three separate clinical trials, underway, or planned, including physician-sponsored trials.

Additionally, we believe that data supports a fourth clinical trial to begin with Annamycin in combination with Ara-C for the treatment of AML also in 2021.

We filed our IND application for Annamycin for the treatment of AML, with the clinical strategy of increasing the MTD mentioned above, in February 2017, which was allowed in September 2017.

The FDA limited dosages to patients to a lifetime maximum anthracycline exposure of 550 mg/m2 which in effect limited the maximum dose in our trial to 120 mg/m2.

Patient treatment began in the US in March 2018.

In August 2017, we met with the European Medicines Agency (EMA) to discuss a CTA (Clinical Trial Authorization) in Europe for the study of Annamycin for the treatment of AML.

In 2022, we expect there will be three clinical trials ongoing that involve Annamycin for the treatment of R/R AML or STS lung metastases.

We recently concluded our Annamycin single agent AML trial in Europe, safely establishing an RP2D, and are now focusing on a European Phase 1/2 AML trial with AnnAraC (combination of Annamycin with Ara-C) which we believe will begin in the first half of 2022.

Additionally, our Phase 1b/2 clinical trial in the US for the treatment of STS lung metastases is ongoing, and a third investigator led trial with Annamycin treating STS lung metastases using a different dosing regimen than the US trial should begin in Poland during the second half of 2022.

This is in addition to the successfully completed US Phase 1 clinical trial of single agent Annamycin treating R/R AML.

US R/R AML Trial

We filed our IND application for a Phase 1/2 trial in the US with Annamycin for the treatment of R/R AML, with the clinical strategy of increasing the prior developers’

MTD mentioned above, in February 2017, which was allowed in September 2017.

The FDA required us to limit dosages to subjects to a lifetime maximum anthracycline exposure of 550 mg/m 2 in this trial which in effect limited the maximum dose in our trial to 120 mg/m 2 .

Subject treatment began in the US in March 2018.

In February 2020, we announced that our open label, single arm US Phase 1 portion of a Phase 1/2 trial had concluded its second cohort and met its primary objective of demonstrating the safety of Annamycin in treating relapsed or refractory AML. At that time, we received an independent expert cardiology assessment confirming the absence of cardiotoxicity in the first 19 subjects treated with Annamycin in both our US and European Phase 1 clinical trials.

The FDA established the LTMAD because of concerns about cardiotoxicity associated with currently approved anthracyclines when administered above the LTMAD.

An updated independent safety review in early 2022 of certain preliminary data of the first 30 subjects in our three Annamycin clinical trials concluded there was no evidence of cardiotoxicity.

Importantly, 19 of the 30 subjects evaluated were treated above the LTMAD.

As stated in our CSR, one of seven (or 14.3%) subjects achieved a morphological leukemia-free state (MLFS).

MLFS is defined as <5% blasts in the bone marrow with no blasts with Auer rods and no extramedullary disease.

This was at what we viewed as a subtherapeutic dose level when compared to MB-105.

As a result of discussions with the FDA, we focused on establishing an RP2D in our single agent R/R AML trial in Europe (discussed below), which we have recently announced, and, as requested by the FDA, we continue to generate additional safety and efficacy data prior to considering continuation of our US R/R AML trial.

European R/R AML Trial

In August 2017, we met with the European Medicines Agency (EMA) to discuss a CTA (Clinical Trial Authorization) in Europe for the study of Annamycin for the treatment of R/R AML.

In December 2017, the Ethics Committee in Poland approved our Phase 1/2 trial of Annamycin for the treatment of relapsed or refractory AML.

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The EMA did not impose a lifetime maximum anthracycline exposure limit in this trial.

In February 2020, we announced that our open label, single arm US Phase 1 portion of a Phase 1/2 trial had concluded its second cohort and met its primary objective of demonstrating the safety of Annamycin in treating relapsed or refractory AML. We have received an independent expert cardiology assessment confirming the absence of cardiotoxicity in the first 19 patients treated with Annamycin in both our US and European Phase 1 clinical trials.

Annamycin is currently in one Phase 1/2 clinical trial in Europe, and the Phase 1 portion of another Phase 1/2 AML trial in the US has been concluded, subject to final database lock and closure.

The FDA established the LTMAD because of concerns about cardiotoxicity associated with currently approved anthracyclines when administered above the LTMAD.

Of the first 19 patients in our trials, 11 have been treated above the LTMAD (one patient received more than double the LTMAD) and none have shown evidence of any cardiotoxicity.

The trial in Poland is in its fifth cohort, where patients are being treated at 240 mg/m2.

Patient 2 in this cohort experienced a dose limiting toxicity (DLT), related to liver function, secondarily related to concomitant medication not being withheld.

Although that DLT resolved, in accordance with the trial protocol, the cohort was expanded and has now enrolled a total of five patients.

Moleculin is planning to amend the protocol for this trial to allow exploration of an intermediate dose level between the 210 mg/m2 dose in the fourth cohort and the current 240 mg/m2 dose level, in order to establish the maximum tolerated dosage (MTD) and Recommended Phase 2 dose (RP2D), which may be the same.

Because of the different indication and differences in dosing regimen, we expect to determine a separate MTD in the Phase 1 portion of the STS trials.

Study Design for AML -

We have been studying Annamycin in both the US and Europe in Phase 1/2 open label, single arm clinical trials to assess the safety and efficacy of Annamycin for the treatment of adults with relapsed or refractory AML.

The US and European trials have essentially the same study design, consisting of a Phase 1 intended to establish a "Recommended Phase 2 Dose" (RP2D), to which the studies may then proceed in the Phase 2 portion.

The Phase 1 portion of the studies provide for escalating doses in cohorts of 3 patients each, with each successive cohort receiving the next higher dose level until "dose limiting toxicities" prevent further increases.

Cohorts 1, 2, 3 and 4 in Europe received a dose of 120, 150, 180 and 210 mg/m2, respectively, and the results have permitted moving to Cohort 5 with dosing at 240 mg/m2.

In the final cohort of this trial, subjects were treated at 240 mg/m 2 .

Two subjects were preliminarily reported to have DLT events which were later classified as adverse events (AEs) following a review by the Safety Review Committee of the protocol DLT definitions.

However due to the preliminary DLT designation at the time, the cohort was expanded and eventually enrolled a total of eight subjects, with five receiving the full course of Annamycin.

An amendment to the Annamycin clinical trial protocol allowed for a change in the DLT criteria as it relates to transient grade 3 elevations and allowed dosing of three additional subjects in the 240 mg/m 2 cohort.

Of the eight subjects that were dosed three subjects experienced AEs or SAEs.

One fully resolved and another resolved to a grade 2 in the same day. One subject treated experienced an SAE (grade 2 infusion reaction) not currently listed in the investigator brochure (IB) therefore this is a Suspected Unexpected Serious Adverse Reaction (SUSAR) that required reporting to regulatory bodies, which was done.

In this cohort the eight subjects received an average of approximately seven prior regimens, representing heavily treated subjects.

Of the five receiving a full course of Annamycin at 240 mg/m 2 , a 60% ORR was experienced with two PRs and one CRi.

Coupling these data with the preclinical animal studies showing AnnAraC having greater efficacy than Annamycin or Cytarabine alone, as mentioned above, we established 240 mg/m 2 as the RP2D for this trial and switched our focus to initiating the combination study.

We also continued to see no signs of cardiotoxicity with all but three subjects having been reviewed by the expert, as mentioned above.

These last three subjects will be included in future updated reviews by the expert.

With these data we successfully concluded the Phase 1 portion of this trial in February of 2022 and will now focus on treating AML utilizing AnnAraC, as discussed more fully below.

While this will establish an RP2D for Annamycin in this single agent AML trial and will assist in establishing the starting dose in our planned trial using AnnAraC in treating AML, we do not believe it will limit the dose escalation in either the AnnAraC or STS trials, which are both discussed in more detail below.

Plans for a Phase 1/2 Trial of AnnAraC in AML in Europe

Based on the preclinical data discussed above, we are preparing to start a new clinical trial for the treatment of relapsed or refractory AML with the combination of Annamycin with Ara-C. We expect this clinical trial to begin in the first half of 2022.

We intend for our planned study of AnnAraC in AML to have a similar trial design to the recently concluded Phase 1/2 study of Annamycin as a single agent in AML. We believe safety data from our current single agent trial will enable us to begin the combination trial at a higher starting dose of Annamycin in the Phase 1 portion that our starting does in our monotherapy AML trial.

As part of these plans in 2021, we filed a CTA in Poland for a Phase 1/2 trial treating AML with a combination of Annamycin and Cytarabine (AnnAraC) and received approval in December 2021 from the Bioethics Committee of the Medical University of Karol Marcinkiewicz in Poznań

(Ethics Committee) and we expect allowance from the URPL in time to begin this trial in the first half of 2022. However, we cannot provide assurance that such approval will be received. This trial builds on the safety and dosage data from the two prior single agent Annamycin AML Phase 1 trials in the US and Europe that have been successfully concluded.

We also utilized preclinical animal data from our sponsored research conducted simultaneous with our clinical trials to support this new combination trial.

In that animal study Annamycin in combination with Cytarabine demonstrated a 68% improvement in the median overall survival (OS) compared to Annamycin as a single agent and a 241% increase in OS compared to Cytarabine alone.

Study Design for R/R AML -

We have been studying Annamycin in both the US and Europe in Phase 1/2 open label, single arm clinical trials to assess the safety and efficacy of Annamycin as a single agent for the treatment of adults with relapsed or refractory AML.

The US and European trials had essentially the same study design, consisting of a Phase 1 intended to establish a "Recommended Phase 2 Dose" (RP2D), to which the studies may then proceed in the Phase 2 portion.

The Phase 1 portion of the studies provided for escalating doses in cohorts of 3 subjects each, with each successive cohort receiving the next higher dose level until "dose limiting toxicities" prevent further increases.

Cohorts 1, 2, 3 and 4 in Europe received a dose of 120, 150, 180 and 210 mg/m 2 , respectively, and the results allowed us to advance to Cohort 5 with dosing at 240 mg/m 2 .

Refer to the discussion above for an update on this trial.

Cohort 1 in the US started at 100 mg/m 2 , and the results supported moving to Cohort 2 at 120 mg/m 2 , which has now been fully recruited, treated, and evaluated.

Our US Phase 1 trial met its primary endpoint, demonstrating the safety of Annamycin in treating AML when delivered to patients at or below the lifetime maximum anthracycline dose established by the FDA.

Our US Phase 1 trial met its primary endpoint, demonstrating the safety of Annamycin in treating AML when delivered to subjects at or below the lifetime maximum anthracycline dose established by the FDA.

The primary safety signal was the absence of cardiotoxicity, a serious and often treatment-limiting issue prevalent with currently approved anthracyclines.

The European trial has benefited from a more aggressive dose escalation scheme than was allowed in the US trial and, as a result, has recruited much more rapidly and to much higher dose levels. Accordingly, we have closed the US trial and will rely on the European trial to establish the RP2D.

Once we establish an RP2D in the European trial, the intent is to advance to a Phase 2 arm planned to assess the safety and efficacy of Annamycin in 21 additional patients.

We may amend the protocol of this study where appropriate to adapt to new information that may affect patient safety and care.

The data reported is preliminary as collected by independent CRO site monitors per standard practice and is subject to subsequent quality assurance review.

We have been and intend to continue reporting top-line results by cohort in our clinical trials, with each announcement also including an update on any other related trials.

The European trial benefited from a more aggressive dose escalation scheme than was allowed in the US trial and, as a result, reached higher dose levels. 

We have been and intend to continue reporting top-line results by cohort in all of our Annamycin clinical trials, with each announcement also including an update on any other related trials.

Top-line results will include reporting of any drug-related adverse events (AEs) and assessment of cardiotoxicity, including ECHO (echocardiogram) or MUGA (MUGA stands for multiple-gated acquisition and is also known as radionuclide ventriculography (RVG, RNV) or radionuclide angiography (RNA);

it is a type of nuclear imaging test intended to show how well the heart is pumping) scans measuring change in ejection fraction and measuring blood troponin level, which is considered a biomarker for potential long-term cardiovascular impairment.

Top-line results will also include the number of partial responses (PRs), complete responses (CRs) and patients deemed capable of progressing to a potentially curative bone marrow transplant, which we term "bridge to transplant" (BTs), each of which is essentially a function of the magnitude of reduction in a patient's bone marrow blasts.

For purposes of these clinical trials, a CR means that the patient's bone marrow blasts reduced to 5% or less (with CRi meaning a CR where there was incomplete recovery of white blood cell and/or platelet counts), a PR means the patient's bone marrow blasts reduced by 50% and resulted in a blast count of 25% or less, and a BT means patients are deemed capable of progressing to a potentially curative bone marrow transplant.

Safety of Annamycin in AML Patients -

it is a type of nuclear imaging test intended to show how well the heart is pumping) scans measuring change in ejection fraction and measuring certain blood troponin levels, which is considered a biomarker for potential long-term cardiovascular impairment.

Top-line results will also include the number of partial responses (PRs), complete responses (CRs) and subjects deemed capable of progressing to a potentially curative bone marrow transplant, which we term "bridge to transplant" (BTs), each of which is essentially a function of the magnitude of reduction in a subject's bone marrow blasts.

For purposes of these clinical trials, a CR means that the subject's bone marrow blasts reduced to 5% or less (with CRi meaning a CR where there was incomplete recovery of white blood cell and/or platelet counts), a PR means the subject's bone marrow blasts reduced by 50% and resulted in a blast count of 25% or less, and a BT means subjects are deemed capable of progressing to a potentially curative bone marrow transplant.

Safety of Annamycin in R/R AML Subjects -

Our US Phase 1 trial met its primary endpoint, demonstrating the safety of Annamycin in treating R/R AML when delivered to subjects at or below the lifetime maximum anthracycline dose established by the FDA.

The primary safety signal was the absence of cardiotoxicity, a serious and often treatment-limiting issue prevalent with currently approved anthracyclines.

As discussed above, this was determined by echocardiograms, as well as cardiac health biomarkers, principally blood troponin levels, which are considered an indicator of potential long-term heart damage.

The data showed no cardiotoxicity in all of the patients evaluated in the US Phase 1 trial.

Additionally, there were no unexpected serious adverse events and no dose limiting toxicities (DLTs) at any dose tested until the 240 mg/m2 cohort in Poland.

The DLTs in that cohort are discussed above.

To date, an independent expert assessment of the absence of cardiotoxicity in the first 19 patients treated with Annamycin in both our US and European Phase 1 clinical trials in which an independent expert concluded that he "does not see evidence of cardiotoxicity.”

Additionally, we recently concluded our European R/R AML trial, as discussed above, and not only set an RP2D but also met the trial’s primary safety signal with the absence of cardiotoxicity.

As discussed above, this was determined by echocardiograms, as well as cardiac health biomarkers, principally certain blood troponin levels, which are considered an indicator of potential long-term heart damage.

The data showed no cardiotoxicity in all of the subjects evaluated in the both Phase 1 trials.

An updated independent safety review in early 2022 of certain preliminary data of the first 30 subjects in our three Annamycin Phase 1 clinical trials, which again concluded there was no evidence of cardiotoxicity.

Importantly, 19 of the 30 subjects have been treated above the LTMAD.

Compared to previous studies of other anthracyclines, we believe this is an important event.

For example, a recent review published in Cardiovascular Drugs and Therapy (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5346598/) reported that 65% of patients who received the equivalent of 550 mg/m2 of doxorubicin (a current standard of care anthracycline) exhibited sub-clinical cardiotoxicity, defined as a reduction in left ventricular ejection fraction >10% points to a value <50%.

In the 5 patients mentioned above who were treated in our European trial above 550 mg/m2, no evidence of cardiotoxicity was detected.

For example, a review published in Cardiovascular Drugs and Therapy (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5346598/) reported that 65% of patients who received the equivalent of 550 mg/m 2 of doxorubicin (a current standard of care anthracycline) exhibited sub-clinical cardiotoxicity, defined as a reduction in left ventricular ejection fraction >10% points to a value <50%.

In the 5 subjects mentioned above who were treated in our European trial above 550 mg/m 2 , no evidence of cardiotoxicity was detected.

The same published review also suggested that a better long-term indicator of cardiotoxicity may be the measurement of an increase in a biomarker called troponin.

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Overall, some form of cardiotoxicity, short-term or long-term, occurs in 65% of such patients.

Of the 19 patients treated thus far in both of our Annamycin clinical trials and where safety has been assessed, none has shown an increase in troponin levels, again supporting the absence of cardiotoxicity. As previously noted, although these data are, in our view, promising, there remains significant additional clinical investigation to be done, and there can be no guarantee of the future results. 

Preliminary Evidence of Potential Effectiveness in AML -

Although the primary objective of the US Phase 1 trial was to evaluate safety, the study also gathered data to support a preliminary assessment of Annamycin's potential efficacy.

Among other things, the study recorded complete response (CR), partial response (PR), and event-free survival.

Based on these criteria, efficacy was seen in 2 or 30% of the US patients, even though the drug was dosed at what we considered to be sub-therapeutic levels.

The evidence of efficacy consisted of 1 patient who achieved a "morphologically leukemia-free state," which the protocol defined as a CR with incomplete recovery of platelets or neutrophils (CRi), and another patient who had a substantial remission of leukemia cutis (a somewhat rare leukemia symptom), improving from diffuse to 3 small lesions.

We believe to see this kind of activity this early is encouraging, especially since Phase 1 trials are primarily designed to demonstrate safety, not efficacy, and the dosing was therefore at a level we expected to be sub-therapeutic, based on previous data.

We are also encouraged because Annamycin is being studied as a single agent, not in combination with any other drugs.

We believe this is potentially significant, because we believe the vast majority of relapsed or refractory AML patients do not respond to single agents.

Although this is very early data from a small sample size, we are especially encouraged because the dosing was well below our anticipated recommended Phase 2 dose.

We believe that, if the level of activity experienced in the US trial can be demonstrated in a larger patient population, we may be well-positioned to seek accelerated approval from the FDA.

FDA has granted Fast Track designation, which recognizes that Annamycin shows the potential to address unmet medical needs, which can include providing efficacy comparable to available therapies while avoiding toxicity associated with the existing treatment.

Between the US and European studies, 15 AML patients have been evaluated after receiving Annamycin at or above 120 mg/m2 in closed cohorts (below 240 mg/m2).

When they entered the study, 10 of the 15 patients were considered relapsed and 5 were considered refractory.

Although reduction in bone and/or circulating blasts has been seen in most relapsed and refractory AML patients, each of the 5 patients where efficacy endpoints were met was a relapsed patient.

In the 15 patients mentioned, efficacy signals have been demonstrated to date in 50% of the relapsed and 33% of the refractory patients.

The efficacy-related data for those patients (which includes the 2 US patients mentioned above) is as follows:

One patient had a CRi, which the protocol defined as a complete response with incomplete recovery of white blood cells and/or platelets;

Two patients had PRs (partial responses, meaning that bone marrow blasts were reduced 50% and to below 25%);

One patient had a substantial remission (from diffuse to a few lesions) of their somewhat rare leukemic symptom known as leukemia cutis;

One patient was bridged to bone marrow transplant (BT) based on a sufficient reduction in bone marrow blasts.

We refer to Annamycin as a "next generation anthracycline," because it is designed, and thus far has shown clinically, to provide enhanced therapeutic benefits when compared with traditional anthracyclines (like doxorubicin) while reducing the potential for cardiotoxicity, or damage to the heart.

This design intent has previously been validated with preclinical toxicology studies in animal models (as required by FDA) demonstrating Annamycin has little to no cardiotoxicity, unlike what is seen with doxorubicin.

Of the 19 patients treated and fully evaluated thus far in both trials, including those treated below 120 mg/m 2 , none has shown any evidence of cardiotoxicity.

This includes 10 patients in Europe who were treated at levels above the US maximum allowable lifetime cumulative anthracycline dose level (550 mg/m 2 ), a limitation not imposed on our trial in Europe.

If this continues to be confirmed in further studies, this lack of toxicity could be an important differentiator between Annamycin and the currently approved anthracyclines, for which cardiotoxicity is a well-known treatment limitation.

Plans for a Phase 2 Trial for AML -

Upon conclusion of our European AML clinical trial, we intend to discuss with the FDA and EMA our plans to conduct a single arm Phase 2 trial that would serve as the basis for accelerated approval of Annamycin to treat AML.

This will follow the establishment of a RP2D in our ongoing Phase 1/2 dose escalation trial in Europe.

The FDA has already granted Annamycin Fast Track status and ODD for AML.

The benefits of Fast Track include FDA actions to expedite development and review, including "rolling review," where the agency reviews portions of a marketing application before the complete application is submitted.

Most recently, the US Phase 1 study met its primary objective of demonstrating the safety of Annamycin at a dose that was cumulatively at or below the lifetime maximum anthracycline dose established by the FDA.

Those results are consistent with results achieved with the parallel Phase 1/2 study being conducted in Europe, which has demonstrated the safety of escalating doses of Annamycin in AML patients, including doses that significantly exceed the maximum lifetime dose of anthracyclines imposed in the US.

In both trials, the primary endpoints are aimed at demonstrating the product's safety, primarily the lack of cardiovascular risk, as measured by echocardiograms and cardiac health biomarkers, principally blood troponin levels, among other things.

Based on these results, we will continue to focus our efforts on the European trial to establish an RP2D.

Once that is complete, we intend to enter discussions with the FDA and EMA about conducting a single arm Phase 2 study that would be the pivotal trial supporting US and European approval of Annamycin for relapsed or refractory AML, and, if approved, with an additional confirmatory post-approval Phase 3 study also possibly being required.

We can provide no assurance that the FDA or their EU or other equivalent will permit such reliance and we may be required to conduct additional trials.

Plans for a Phase 1/2 Trial of AnnAraC in AML

Based on the preclinical data discussed above, we are preparing to start a new clinical trial for the treatment of relapsed or refractory AML with the combination of Annamycin with Ara-C, a combination we are calling “AnnAraC.” We expect this clinical trial to begin sometime in the second half of 2021.

We intend for our planned study of AnnAraC in AML to have a similar trial design to the current Phase 1/2 study of Annamycin as a single agent in AML. We believe safety data from our current single agent trial will enable us to begin the combination trial at a higher starting dose of Annamycin in the Phase 1 portion but that will be an issue for the applicable regulatory agency when we approach them on an IND or CTA.

We believe that the initial site for a combination trial will most likely be in Europe.

Plans for a Phase 1b/2 Trial of Annamycin in STS Lung Metastases

We have been moving quickly to begin a clinical trial in the US to study Annamycin for STS lung metastases, and in light of the importance of producing human clinical data to facilitate outlicensing opportunities, we included this upcoming trial as part of our internally funded clinical development program.

In December 2020, we announced that the FDA allowed our IND application to study Annamycin for the treatment of STS lung metastases to go into effect. This allows us to begin a Phase 1b/2 clinical trial in the US for patients with soft tissue sarcoma that has metastasized to the lungs after first-line therapy for their disease.

We are also collaborating with WPD and physicians in Poland who have shown a high level of interest in testing Annamycin in STS lung metastases and are currently pursuing a physician-sponsored clinical trial in Europe.

WPD recently announced their facilitation of a grant equivalent to $1.5 million USD to the Maria Sklodowska-Curie National Research Institute to fund a Phase 1b/2 clinical trial of Annamycin for the treatment of STS lung metastases. The grant-funded clinical trial will be led by Prof.

Of the 30 subjects treated thus far in all three of our Annamycin clinical trials and where safety has been assessed, none has shown a clinically significant increase in troponin levels, again supporting the absence of cardiotoxicity. As previously noted, although these data are, in our view, promising, there remains significant additional clinical investigation to be done, and there can be no guarantee of the future results. 

US STS Lung Metastases Trials

Our preclinical work on Annamycin demonstrated activity against certain cancers metastasized to the lungs, including soft tissue sarcoma (STS), osteosarcoma and triple negative breast cancer.

In December 2020, we disclosed that the FDA allowed our IND to go into effect to study Annamycin for the treatment of soft tissue sarcoma lung metastases.

This allowed us to begin a Phase 1b/2 clinical trial in the US for subjects with this indication after first-line therapy for their disease.

This trial began in June of 2021.

We also disclosed in December 2020 that the FDA had granted ODD to Annamycin for the treatment of soft tissue sarcomas, in addition to the existing ODD for Annamycin in relapsed or refractory AML.

Also, in December 2021, we reported preliminary interim results from our US Phase 1b/2 clinical trial as we concluded the safety review of the third cohort and opened the fourth cohort in the dose escalation portion of trial, which continues to document preliminary human activity for this drug.

The Phase 1b/2 study is a US multi-center, open-label, single-arm study that in Phase 1b will determine the MTD and/or the RP2D and safety of Annamycin.

The Phase 2 portion of the study will explore the efficacy of Annamycin as a single agent at the RP2D for the treatment of subjects with STS with lung metastases for whom prior chemotherapy has failed, and for whom new chemotherapy is considered appropriate.

A minimum of three subjects will be enrolled in each cohort of the Phase 1b portion of the study until an MTD is identified, after which there will be a determination of the RP2D based on an assessment of both safety and efficacy.

Up to 25 subjects will be enrolled at the RP2D in Phase 2 to further evaluate efficacy.

Three of the six subjects in the first two cohorts reached four or more months with stable disease or better.

In a patient population where the median progression free survival time in patients with soft tissue sarcoma with metastases that have failed initial systemic therapy is approximately 1.6 to 2.0 months, without effective therapy which includes subjects treated with a placebo.

Comandone, F.

Petrelli, A Boglione, S.

Salvage Therapy in Advanced Adult Soft Tissue Sarcoma.

The Oncologist 2017;22:1518–1527), we believe Annamycin has the potential to bring a new and effective treatment option to patients with this significant unmet need.

We are also encouraged by the pace of recruitment to date for this trial.

The summary of interim data from the first four cohorts of the study are as follows:

First Cohort (210 mg/m 2 ):

Two subjects had stable disease up to 6 cycles (4.5 months) but were then discontinued due to progressive disease.

One subject discontinued after the first cycle.

The end of study scan was performed, and stable disease was observed.

However, the subject discontinued from the study because the initiation of the second cycle was delayed greater than 6 weeks from the previous dose.

Second Cohort (270 mg/m 2 ):

In one subject, the scan at the end of the second cycle showed that there was a partial response (PR, >30% reduction in tumor size), and this was stable when the subject was scanned at the end of cycle 4.

The subject subsequently discontinued from the study due to that subject electing to undergo surgical resection to potentially eradicate disease.

One subject was discontinued from the study after 2 cycles after the end of cycle 2 scan revealed progressive disease.

One subject received 1 cycle of treatment but discontinued treatment for reasons unrelated to Annamycin.

The end of study scan revealed progressive disease.

Third Cohort (330 mg/m 2 ):

One subject discontinued after the first cycle. An interim, unscheduled scan revealed progressive disease and the subject was discontinued from the study.

One subject was discontinued from the study after 2 cycles as a scan after the end of cycle 2 revealed progressive disease.

One subject received 2 cycles and end of cycle 2 scans showed stable disease. However, subject withdrew consent from the study to pursue local standard of care.

Fourth Cohort (390 mg/m 2 ):

Efficacy data for the fourth cohort are incomplete as not all subjects have received their scans.

One subject received 2 cycles and end of Cycle 2 scans showed Stable Disease. The subject currently continues on study with Cycle 3.

One subject is currently in Cycle 2.

This subject experienced a DLT of febrile neutropenia.

It did resolve and the subject continued in the study.

End of Cycle 2 scans showed Stable Disease. The subject currently continues on study with Cycle 3.

One subject received 2 cycles and end of Cycle 2 scans showed Stable Disease. The subject currently continues on study with Cycle 3.

The statements above are based on interim data and should be considered preliminary and subject to change.

We have now completed initial enrollment in the fourth cohort of the Phase 1b portion of the study with dosing increased to 390 mg/m 2 and expect to announce that cohort’s full preliminary results in the near term.

Due to the DLT noted above, the fourth cohort is being expanded to enroll an additional three subjects at this dose level. In the absence of any additional DLTs at this dose level, we have the option to continue escalation to explore the fifth cohort at 450 mg/m 2 dose level or to declare the RP2D to be 390 mg/m 2 .

If a second DLT occurs at the 390mg/m 2 dose level, three subjects may be enrolled into one additional dose level at 360mg/m 2 to confirm the MTD/RP2D.

If the fifth cohort is deemed safe, we may continue to escalate until an MTD is reached.

Therefore, up to twenty-one subjects or more may be enrolled in the Phase 1b portion of the study, unless a determination is made to add additional cohorts beyond the fifth cohort or we establish an RP2D.

We are also collaborating with WPD and physicians in Poland and are currently pursuing a physician-sponsored clinical trial in Europe.

WPD announced their facilitation of a grant equivalent to $1.5 million USD to the Maria Sklodowska-Curie National Research Institute to fund a Phase 1b/2 clinical trial of Annamycin for the treatment of STS lung metastases. The grant-funded clinical trial will be led by Prof.

Piotr Rutkowski, MD, PhD, Head of Department of Soft Tissue/Bone Sarcoma and Melanoma at the Maria Sklodowska-Curie National Research Institute of Oncology in Warsaw, Poland, and it will be operated independently of our study in the US.

It is our goal to have to have our US clinical trial begin by mid-2021, with the possibility of the European-funded clinical trial to begin later in 2021.

The WP1066 Portfolio

The trial will use a dosing regimen of once per week rather than once every 21 days as in the US trial.

We expect this trial to begin in 2022.

US STS Lung Metastases Trial - Study Design

In Phase 1b, Annamycin is administered as an intravenous (IV) infusion over 2 hours on Day 1, followed by 20 days off (1 cycle = 21 days).

Subjects visit the study site every 21 days (±3 days) at which time safety monitoring, including adverse events (AEs), a physical examination, laboratory evaluations (clinical chemistry, complete blood count), vital signs, weight measurements, Eastern Cooperative Oncology Group (ECOG) performance status, and electrocardiograms (ECGs) are performed, followed by an IV infusion of study drug.

Cardiac function is followed by echocardiogram (ECHO) scans at screening, at the end of the first two cycles and then every other cycle thereafter, at the end of treatment visit, and if feasible, during follow up at 6 months (±1 month) and 1 year (±1 month) after study drug discontinuation.

As long as the Investigator considers that the benefits of treatment with Annamycin continue to outweigh the risks, treatment will continue every 21 days until tumor progression is observed or unacceptable toxicity occurs.

Tumor response is monitored every 6 weeks (±1 week) from Cycle 1 Day 1 during treatment, at the End of Treatment visit, and then every 3 months (±1 month) until disease progression using RECIST 1.1 criteria.

Those subjects who leave the study after a maximum response is achieved and who do not start another therapy will be followed every 3 months (±1 month) for progression-free survival (PFS).

If a subject receives further therapy after discontinuing from the study, they will only be followed for overall survival (OS) and if feasible, follow-up ECHO scans at 6 months (±1 month) and 1 year (±1 month) will be conducted after study drug discontinuation.

The WP1066 Portfolio Program

We have a license agreement with MD Anderson pursuant to which we have been granted a royalty-bearing, worldwide, exclusive license for the patent and technology rights related to our WP1066 Portfolio and its close analogs, molecules targeting the modulation of key oncogenic transcription factors.

In 2019, the FDA granted ODD for WP1066 for the treatment of glioblastoma, which means the agency believes we have established a medically plausible basis for using the drug to treat glioblastoma.

Our WP1066 Portfolio (including lead drug candidates WP1066 and WP1220) we believe, represents a novel class of agents capable of hitting multiple targets, including the activated form of a key oncogenic transcription factor, STAT3.

We believe our WP1066 Portfolio (including lead drug candidates WP1066 and WP1220) we believe, represents a novel class of agents capable of hitting multiple targets, including the activated form of a key oncogenic transcription factor, STAT3.

A substantial body of published research has identified STAT3 as a master regulator of a wide range of tumors and has linked the activated form, p-STAT3, with the survival and progression of these tumors.

For this reason, it is believed that targeted inhibition of p-STAT3 may be an effective way to reduce or eliminate the progression of these diseases.

During 2020, we have been working on developing an appropriate IV formulation for the portfolio of WP1066.

As a result of these studies, we believe that the lead molecule WP1066 may be our best candidate for intravenous administration and studies of an IV formulation candidate are currently underway.

Additionally, we determined that the stability of WP1732, another molecule in the WP1066 Portfolio was less than satisfactory and, as such, in March 2021 we terminated our license for WP1732 with MDA.

The high level of anticancer activity demonstrated in multiple tumors in animal models by WP1066 is potentially related to its ability to also inhibit such important key oncogenic transcription factors such as c-Myc and HIF-1α.

In addition to direct anticancer effects not related to the function of the immune system, our lead drug candidate WP1066 has also been shown to boost immune response in animals, in part by inhibiting activity of Regulatory T cells (TRegs), which are coopted by tumors to evade the immune system.

During 2021, we have been working on developing an appropriate IV formulation for WP1066 or its analogs.

As a result of these studies, we believe that the lead molecule WP1066 may be our best candidate for intravenous administration and efforts to identify and optimize the best strategy for IV delivery are currently underway.

The high level of anticancer activity demonstrated in multiple tumors in animal models by WP1066 is potentially related to its ability to also inhibit such important key oncogenic transcription factors such as c-Myc and HIF-1α.

In addition to direct anticancer effects not related to the function of the immune system, our lead drug candidate WP1066 has also been shown to boost immune response in animals, in part by inhibiting activity of TRegs, which are coopted by tumors to evade the immune system.

We believe the dual effect of (1) directly inhibiting tumor growth and inducing tumor cell death and (2) separately boosting and directing the natural immune response to tumors is therapeutically promising.

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that then bind to T-Cells and prevent them from attacking the tumor.

Immune checkpoint inhibitors are antibodies that block these receptor mechanisms and allow the T-Cells to act normally and attack the tumor.

In certain types of tumors, like melanoma, checkpoint inhibitors work well, and the results can be impressive, creating durable suppression of tumors where no other therapy had succeeded.

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10.3389/ fphar.2018.00536, eCollection 2018).

In summary, although much of the data is preclinical and all of it is preliminary, we are optimistic that administration of WP1066 could lead to improved treatment results in many patients receiving checkpoint inhibitor therapy.

WP1066  

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In vivo testing in mouse tumor models indicates that WP1066 inhibits tumor growth, blocks angiogenesis (a process that leads to the formation of blood vasculature needed for tumor growth) and increases survival.

Recently, our own sponsored research and published findings from independent researchers point to the possibility that administration of WP1066 could lead to improved treatment results in many patients receiving checkpoint inhibitor therapy.

Our own sponsored research and published findings from independent researchers point to the possibility that administration of WP1066 could lead to improved treatment results in many patients receiving checkpoint inhibitor therapy.

Additionally, in April 2019 we announced that preclinical data supporting activity of our STAT3-inhibiting Immune/Transcription Modulators was presented by Dr.

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The abstract (AACR Abstract:

https://www.moleculin.com/inhibition-of-stat3-in-pancreatic-ductal-adenocarcinoma-and-immunotherapeutic-implications/ ) and presentation included data resulting from preclinical evaluation in pancreatic cancer models of the STAT3 inhibitor WP1066.

https://www.moleculin.com/inhibition-of-stat3-in-pancreatic-ductal-adenocarcinoma-and-immunotherapeutic-implications/) and the presentation included data resulting from preclinical evaluation in pancreatic cancer models of the STAT3 inhibitor WP1066.

In vitro efficacy of this inhibitor was assessed using proliferation and apoptosis induction assays in a panel of patient-derived and commercially available Pancreatic Ductal Adenocarcinoma (PDAC) cell lines.

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Importantly, WP1066 shows in-vivo efficacy in preliminary experiments when tested alone or in combination with T cell immune checkpoint inhibitors.

Clinical Activity WP1066 -

Two trials are underway with WP1066.

The first trial is a physician-sponsored Phase 1 trial of WP1066 in patients with recurrent malignant glioma and brain metastasis from melanoma which the FDA allowed to proceed in December 2017.

Clinical Trials for the WP1066 Portfolio

In 2021, two trials were underway with WP1066.

The first trial was a physician-sponsored Phase 1 trial of WP1066 in adult subjects with recurrent malignant glioma and brain metastasis from melanoma which the FDA allowed to proceed in December 2017.

In July 2018, this trial opened for recruitment in the US.

This dose-escalation Phase 1 brain tumor clinical trial via a physician-sponsored IND with MD Anderson Cancer Center has generated pharmacokinetic data for oral dosed WP1066.

That data demonstrated sufficient bioavailability of our drug via oral administration to show the presence of WP1066 in blood plasma on a dose-dependent basis.

Investigators at MD Anderson have begun the fourth and final cohort in the dose escalation phase.

The Phase 1 trial at MD Anderson with WP1066 drug is being supported by $2 million in private grant funding which is in addition to two Specialized Programs of Research Excellence or (SPORE) peer reviewed grants awarded by the National Cancer Institute.

We believe the rigorous peer-review process applied to SPORE grant applications represents an important additional measure of independent assessment and validation of the research connected with our approach to using WP1066/STAT3 for the treatment of cancer.

The grants described here do not flow through our financial statements, but instead are applied to the cost of preclinical and clinical activities at and conducted by MD Anderson.

In the first quarter of 2021, we were notified that the physician sponsoring this trial is leaving MDA. Although we cannot be assured that this trial will continue at MDA after her departure, several additional institutions have expressed an interest in sponsoring similar research on WP1066 in brain tumors, so to help ensure the potential continuation of this important research, regardless of the sponsoring institution, we have requested the IND for this trial to be transferred into our name with the FDA, although there is no assurance that we will be successful in completing such transfer.

While we are making arrangements to continue this research in additional physician-sponsored trials, we expect that continued research on WP1066 in adult GBM will be delayed.

At the 2009 annual meeting of the Society for Neuro Oncology (SNO), Emory University researchers reported encouraging activity in animals with their in vitro pediatric brain tumor models using WP1066.

Based on this data, they filed and received clearance to proceed with an IND for a trial to treat children with recurrent or refractory malignant brain tumors with WP1066.

This trial is being conducted at the Aflac Cancer & Blood Disorders Center at Children's Healthcare of Atlanta.

This trial has now successfully completed treatment of three patients in the first cohort and two patients in the second cohort, with the third and last patient in the second cohort having begun treatment at the dose level of 6mg/kg.

In that trial, one of the patients with DIPG showed an apparent response to the treatment with both clinical improvement and radiologic reduction of tumor size.

We caution that this is preliminary data and no conclusions should be drawn from this single event.

This dose-escalation Phase 1 brain tumor clinical trial via a physician-sponsored IND with MD Anderson Cancer Center has generated pharmacokinetic data for orally dosed WP1066.

Those data demonstrated sufficient bioavailability of our drug via oral administration to show the presence of WP1066 in blood plasma on a dose-dependent basis.

In early 2021, investigators at MD Anderson began the fourth cohort in the dose escalation phase.

In the first quarter of 2021, we were notified that the physician sponsoring the MD Anderson trial was leaving MD Anderson.

MD Anderson has chosen to terminate this trial.

We are actively pursuing the process to file our own IND for WP1066 so physician sponsored trials can reference our IND, although we can provide no assurance as to when, or if, this filing will be completed.

Another physician-sponsored Phase 1 trial is being considered for the treatment of adult GBM with WP1066 in combination with radiation, although no assurances can be given that such trial will begin.

In July 2020 we announced that a peer-reviewed article published in Clinical Cancer Research (Clin Cancer Res June 30 2020 DOI:10.1158/1078-0432.CCR-19-4092) reported findings that WP1066, used in combination with traditional whole brain radiation therapy (WBRT) resulted in long-term survivors and enhanced median survival time relative to monotherapy in mice with implanted human brain tumors.

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The study was performed by lead author Martina Ott, Ph.D., Instructor of Neurosurgery, senior author Amy Heimberger, M.D., professor of Neurosurgery, and a team of researchers at The University of Texas MD Anderson Cancer Center.

Heimberger was also the Principal Investigator of the current physician-sponsored clinical trial of WP1066 for brain tumors.

In the current study, C57BL/6 mice underwent intracerebral implantation of GL261 glioma cells, WBRT, and treatment with WP1066, a blood-brain barrier penetrant inhibitor of the STAT3 pathway, or the two in combination.

In this study, C57BL/6 mice underwent intracerebral implantation of GL261 glioma cells, WBRT, and treatment with WP1066, a blood-brain barrier penetrant inhibitor of the STAT3 pathway, or the two in combination.

The role of the immune system was evaluated using tumor rechallenge strategies, immune incompetent backgrounds, immunofluorescence, immune phenotyping of tumor-infiltrating immune cells (via flow cytometry), and nanostring gene expression analysis of 770 immune-related genes from immune cells, including those directly isolated from the tumor microenvironment.

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Nanostring analysis and immunofluorescence revealed immunological reprogramming in the brain tumor microenvironment specifically affecting dendritic-cell antigen presentation and T cell effector functions.

The study indicates that the combination of STAT3 inhibition and WBRT enhances the therapeutic effect against gliomas in the CNS by inducing dendritic-cell and T cell interactions in the brain tumor, which seems to be a requirement for a fully functional immune response

This study is consistent with preliminary data we announced last year.

The study indicates that the combination of STAT3 inhibition and WBRT enhances the therapeutic effect against gliomas in the central nervous system by inducing dendritic-cell and T cell interactions in the brain tumor, which seems to be a requirement for a fully functional immune response

This study is consistent with preliminary data we announced previously.

Importantly, the study indicated the potential that the combination of STAT3 inhibition with whole brain radiotherapy had the capacity to enhance the therapeutic effect against established tumors as well as developing immune memory that appears to prevent recurrence.

With this preclinical data, we believe that another physician-sponsored Phase 1 trial should be considered for the treatment of GBM with WP1066 in combination with radiation, although no assurances can be given that such trial will begin.

With this preclinical data, we believe that another physician-sponsored Phase 1 trial could be considered for the treatment of GBM with WP1066 in combination with radiation, although no assurances can be given that such trial will begin.

Based on these data, they filed and received clearance to proceed with an IND for a trial to treat children with recurrent or refractory malignant brain tumors with WP1066.

This trial is being conducted at the Aflac Cancer & Blood Disorders Center at Children's Healthcare of Atlanta.

The Emory trial for pediatric brain tumors has now treated three subjects in the first two cohorts of the Phase 1 dose escalation portion of physician-sponsored clinical trial for the treatment of pediatric brain tumors with WP1066.

One subject has been treated in the third cohort at the dose level of 8mg/kg.

Two more subjects will be treated at this dose level.

Emory University has amended its protocol to allow dosing at 16 mg/kg after these two additional subjects have been dosed, and the third cohort dosing has been deemed safe.

In that trial, one of the subjects in the first cohort with DIPG showed an apparent response to the treatment with both clinical improvement and radiologic reduction of tumor size.

We caution that these is preliminary data, and no conclusions should be drawn from this single event. 

An analog of WP1066, referred to as WP1220, was previously the subject of an IND (WP1220 was referred to as “MOL4239”

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Clinical trials were commenced on WP1220 in the US but were terminated early due to limited efficacy in the topical treatment of psoriatic plaques.

Notwithstanding its limitations in treating psoriasis, our pre-clinical research in multiple cutaneous T-cell lymphoma (CTCL) cell lines has suggested that WP1220 may be effective in inhibiting CTCL.

Based on this data, we are collaborating with two Polish drug development companies.

One is Dermin, which has previously received Polish government grant money to develop WP1220 in Poland for the topical treatment of early stage CTCL patients, and the other is WPD Pharmaceuticals, which is applying for Polish government grant money.

Notwithstanding its limitations in treating psoriasis, our pre-clinical research in multiple CTCL cell lines has suggested that WP1220 may be effective in inhibiting CTCL.

Based on these data, we are pursuing discussions with various pharmaceutical companies to further development of this molecule.

CTCL is a potentially deadly form of skin cancer for which there are limited treatment options. 

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In August 2019, we completed full enrollment in a proof-of-concept clinical trial in Poland to study WP1220 for the treatment of CTCL.

Polish authorities approved our CTA for this use in January 2019, and the trial began enrolling patients in March 2019.

In February 2020, we announced the final data from our CTCL clinical trial of WP1220, which was published and presented by Dr.

Polish authorities approved our CTA for this use in January 2019, and the trial began enrolling subjects in March 2019.

In February 2020, we announced the final data from our CTCL clinical trial of WP1220, which were published and presented by Dr.

Sokolowska-Wojdylo in conjunction with the 4th Annual World Congress of Cutaneous Lymphomas in Barcelona, Spain on February 13, 2020.

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4 of the 5 subjects improved in CAILS scores on index lesions, with one exhibiting stable disease, with a median reduction of 56% (range 25-94%).

3 of the subjects exhibited a PR.

Improvement was noted within 7 days of treatment initiation and maintained 1 month after discontinuation.

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Although this was a small proof-of-concept clinical trial, WP1220, topically applied, had no safety issues and appeared to be effective in MF.

We believe this is the first demonstration in humans suggesting that inhibition of p-STAT3 with topical therapy has efficacy in CTCL. As a result of this, we are actively seeking third-party collaborations to begin a Phase 2a/2b trial with approximately 60 patients.

If a suitable collaborator is not identified, we will consider internally funding a Phase 2a clinical trial to gather further human efficacy data.

We believe this is the first demonstration in humans suggesting that inhibition of p-STAT3 with topical therapy has efficacy in CTCL. As a result of this, we continue to actively seek third-party collaborations to begin a Phase 2a/2b trial with approximately 60 subjects.

IV Formulation for the WP1066 Portfolio

The topical application WP1220 does not appear to result in systemic exposure to the drug, which is desirable in case of a topical drug targeting a dermatologic condition, however, WP1066 is currently administered orally with the intent of systemic uptake.

Although preliminary data from physician-sponsored brain tumor trials indicates that the oral administration of WP1066 does result in detectable levels of WP1066 in plasma, we believe our opportunity for successful development of a p-STAT3 inhibitor would be expanded if we were able to develop a compound capable of intravenous (IV) administration. In 2020, we began developing IV formulation methods for WP1066 that might address its lack of solubility. As a backup, however, we also invested in research to identify molecular analogs that may be more soluble and, therefore, easier to develop for IV administration.

In February 2018, we announced that, pursuant to our continued collaboration with MD Anderson we had developed and licensed WP1732, a new molecule in the WP1066 portfolio, that was soluble in water.

After continuing research on WP1732, we have more recently identified challenges with the stability of the compound that could limit its development as a drug.

In light of these challenges, we terminated the license with MD Anderson related to WP1732. Although we intend to continue our work toward a viable IV formulation of WP1066, there can be no assurance that this effort will be successful.

The WP1122 Portfolio

The topical application WP1220 does not appear to result in systemic exposure to the drug, which is desirable in the case of a topical drug targeting a dermatologic condition, however, WP1066 is currently administered orally with the intent of systemic uptake.

Although preliminary data from physician-sponsored brain tumor trials indicate that the oral administration of WP1066 does result in detectable levels of WP1066 in plasma, we believe our opportunity for successful development of a p-STAT3 inhibitor would be expanded if we were able to develop a compound capable of intravenous (IV) administration. In 2020, we began developing IV formulation methods for WP1066 that might address its lack of solubility.

We also invested in research to identify molecular analogs that may be more soluble and, therefore, easier to develop for IV administration.

Although we intend to continue our work toward a viable IV formulation of WP1066, there can be no assurance that this effort will be successful.

The WP1122 Portfolio Program

WP1122 Portfolio Program Overview

We have a license agreement with MD Anderson pursuant to which we have been granted a royalty-bearing, worldwide, exclusive license for the patent and technology rights related to our WP1122 Portfolio and similar molecules focused on inhibitors of glycolysis and glycosylation.

These new compounds are designed to exploit the potential uses of inhibitors of glycolysis such as 2-deoxy-D-glucose (2-DG), which we believe may provide an opportunity to cut off the fuel supply of tumors by taking advantage of their high level of dependence on glucose in comparison to healthy cells.

These new compounds are designed to exploit the potential uses of inhibitors of glycolysis such as 2-deoxy-D-glucose (2-DG), which we believe may provide an opportunity to stop the fuel supply of tumors by taking advantage of their high level of dependence on glucose in comparison to healthy cells.

A key drawback to 2-DG is its lack of drug-like properties, including a short circulation time and poor tissue/organ distribution characteristics.

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Additionally, based on independent preclinical data, we believe that this technology has the potential to impact hard to treat viruses that also rely heavily on glycolysis and glycosylation.

Due to the COVID-19 pandemic, we initiated development of the WP1122 portfolio with a combined effort of internally and externally funded preclinical work on WP1122 for the treatment of COVID-19.

We recently announced collaborations with third parties to assist us in developing potential treatments for certain viral diseases, including, potentially, COVID-19.

Due to the COVID-19 pandemic, we initiated development of the WP1122 portfolio with preclinical work on WP1122 for the treatment of COVID-19.

During 2020, we announced that in vitro testing corroborated the antiviral potential of WP1122, including for the SARS-CoV-2 virus responsible for COVID-19.

Subsequently, we had written discussions with the FDA regarding the clinical development of WP1122 for the treatment of COVID-19.

Based on guidance from the FDA, we believe that we need to demonstrate efficacy in a COVID-19 animal model in order to proceed with an IND for COVID-19 clinical trials in the US. Therefore, the timing of any such clinical trial activity in the US is subject to the limited access we have to validated in vivo efficacy testing. For this reason, we are also evaluating opportunities to pursue COVID-19 clinical development outside the US. The IND-enabling preclinical work already completed for WP1122 is mostly similar to the preclinical work we originally planned as part of developing WP1122 for cancer indications.

The timing of an IND in the US or an equivalent in certain other countries is mainly dependent on gaining access to validated in vivo testing that is currently in very high demand and therefore limited availability.

There are very few validated in vivo testing models for COVID-19 and the wait time for such testing is extremely long.

We are focusing our efforts on jurisdictions that may not require testing in a COVID-19 animal model prior to initiating clinical trials.

As an example, the CDSCO (the Indian equivalent of the FDA) recently approved human clinical trials for 2-DG (the active moiety of WP1122) in COVID-19 patients. Furthermore, according to information published by the CDSCO, the resulting Phase 2 trial in 40 COVID-19 patients demonstrated efficacy of 2-DG. Given that WP1122 is prodrug of 2-DG designed to improve its circulation time and tissue/organ uptake, we consider this human data regarding 2-DG to be potentially more relevant to the potential for WP1122 to be useful in treating COVID-19 than any available animal testing model. 

Accordingly, we believe the preclinical work under way for WP1122 will support an IND application or its foreign equivalent for either cancer-related or virus-related clinical trials (or both) in the first half of 2021.

Regardless, there can be no assurance that we will be able to move forward in a timely manner with research on using WP1122 to treat COVID-19, or that WP1122 will be effective in COVID-19 patients.

Subsequently, we had written communications with the FDA regarding the clinical development of WP1122 for the treatment of COVID-19.

Based on guidance from the FDA, we believed that we needed to demonstrate efficacy in a COVID-19 animal model in order to proceed with an IND for COVID-19 clinical trials in the US. At that time, availability of validated COVID-19 animal models was limited. For this reason, we evaluated opportunities to pursue COVID-19 clinical development outside the US. The IND-enabling preclinical work already completed for WP1122 is mostly similar to the preclinical work we originally planned as part of developing WP1122 for cancer indications.

Accordingly, we filed and subsequently received clearance for an IND to study WP1122 in GBM as described below.

An early 2021 study of 2-DG in COVID-19 subjects was conducted by the Institute of Nuclear Medicine and Allied Sciences (INMAS), a lab of Defense Research and Development Organization (DRDO), in collaboration with Dr Reddy's Laboratories (DRL), Hyderabad, India.

INMAS-DRDO scientists initiated a Phase 2 clinical trial on 2-DG in COVID-19 subjects in May 2020 during the first wave of the pandemic.

This was followed by a Phase 3 study and an approval in May 2021, by Drugs Controller General India (DCGI) for emergency use of 2-DG as an adjunct therapy in subjects with moderate to severe COVID-19.

As per the interim available data, the Phase 2 trial reported a median time difference of 2.5 days to achieve normalization of specific vital signs parameters in the 2-DG arm when compared to Standard of Care (SoC).

Subsequently, the Phase 3 trial was pursued which showed that a higher proportion of subjects improved symptomatically and became free from supplemental oxygen dependence in the 2-DG arm (42%) when compared to the SoC arm (31%) by the end of day three of treatment.

( Sahu KK, Kumar R.

Role of 2-Deoxy-D-Glucose in COVID-19 disease:

A potential game-changer.

J Family Med Prim Care.

2021;10(10):3548-3552.

Doi:10.4103/jfmpc.jfmpc_1338_21).

Given that WP1122 is prodrug of 2-DG designed to improve its circulation time and tissue/organ uptake, we consider this human data regarding 2-DG to be potentially relevant to the potential for WP1122 to be useful in treating COVID-19.

The MHRA had access to this and other data in approving our CTA, as discussed below, and did not require an animal testing model.

Clinical Trial for COVID-19 with WP1122

On April 6, 2021, we announced the engagement of IQVIA Biotech, a contract research organization (CRO) to manage our efforts to begin potential clinical trials of WP1122 for the treatment of COVID-19.

On October 19, 2021, we announced that we received authorization from the MHRA to commence a Phase 1a clinical trial of WP1122 in the United Kingdom.

Furthermore, we also announced that we received a favorable opinion from the London - Riverside Research Ethics Committee in the UK to begin the study, which is expected to be conducted at the Medicines Evaluation Unit in Manchester, United Kingdom.

In early March 2022, we filed an amended protocol with both the Riverside Ethics Committee and the MHRA.

The amendment updated the dilution of the oral solution to achieve full dissolution of WP1122. No risk/benefit to the study was affected because of this change.

Once this amendment is approved, we plan to begin this trial in the first half of 2022.

The Phase 1a study in healthy human volunteers will investigate the effects of a single ascending dose (SAD) and multiple days of ascending dosing (MAD) of WP1122 administered as an oral solution.

Dose escalation will take place in sequential SAD cohorts, and MAD will start as soon as SAD has completed at least 3 dosing cohorts in which WP1122 is found to be safe and well-tolerated.

This study in healthy volunteers will explore safety and pharmacokinetics (PK), and subsequent clinical development will be in subjects infected with SARS-CoV-2 to further evaluate safety and establish a favorable risk/benefit profile.

The Company expects to enroll approximately 80 healthy volunteers in the United Kingdom.

The primary endpoint (SAD and MAD) for the study is safety and tolerability, which will be assessed by the frequency of adverse events (AEs), serious adverse events, treatment-emergent adverse events, and AEs of special interest.

These will be presented by severity and seriousness, system organ class, preferred term and cohort.

Clinically significant changes from baseline in clinical laboratory values, physical examination, vital signs, and electrocardiograms will be documented.

The secondary endpoint (SAD and MAD) of the study will be the assessment of PK parameters of WP1122 and its 3 active metabolites.

Total duration of study participation for each subject will be up to 4 weeks during SAD and up to 5 weeks during MAD.

Potential Clinical Trial for GBM with WP1122

On December 1, 2021, we announced that the FDA allowed our IND application to study WP1122 for the treatment of GBM to go forward.

With this IND now cleared, we plan to seek a partner to conduct an externally funded Phase 1 open label, single arm, dose escalation study of the safety, pharmacokinetics and efficacy of oral WP1122 in adult subjects with GBM.

Such a trial would enable parallel development of WP1122 as a cancer therapy.

Consistent with our strategy of leveraging external funding for many of our clinical trials, we intend to seek opportunities for an investigator-initiated clinical trial of WP1122 in cancer patients in 2022.

There is no assurance that we will be successful in finding an investigator with access to externally sourced funds.

Additionally, we will rely on external collaborations for testing other molecules in the WP1122 portfolio against other hard to treat viruses such as HIV, Dengue fever, and Zika.

Overview of The Market for Our Oncology Drugs

Cancer is the second leading cause of death in the United States behind heart disease.

In 2019, an estimated 16.9 million people in the United States were living with a past or current diagnosis of cancer, and, the American Cancer Society further estimates that in 2021, nearly 1.9 million new cases will be diagnosed and over 600,000 Americans will die from cancer.

Importantly, these estimates are based on reported cancer incidence and mortality through 2017 and 2018, respectively, and do not account for the unknown impact of COVID-19 on cancer diagnoses and deaths.

The Orphan Drug Act and other legislative initiatives, such as “Rare Pediatric Disease”

designation, provide incentives, including market exclusivity and accelerated approval pathways, for companies that pursue the development of treatments for rare diseases and serious diseases for which there are few or no acceptable available treatment alternatives.

Over the last 10 years, an increasing number of companies have begun using these designations to obtain new drug approvals for drugs where patent coverage has expired and/or where accelerated approval appears possible.

An IMS Health report estimated that, in 2013, the sale of drugs with full or partial Orphan Drug exclusivity represented approximately $29 billion in revenue.

We have obtained and continue to consider obtaining Orphan Drug exclusivity and have pursued and continue to consider pursuing accelerated approval to be important parts of our development strategy for our drug candidates.

Notwithstanding these potential opportunities, we can provide no assurance that our drugs will receive Orphan Drug designation (other than Annamycin and WP1066, both of which have received such designation) or, if approved, exclusivity or any other special designation that could, among other things, provide for accelerated approval.

The American Cancer Society (https://www.cancer.org/latest-news/facts-and-figures-2022.html - as of March 2022) estimates that cancer continues to be the second most common cause of death in the US, after heart disease.

A total of 1.9 million new cancer cases and 609,360 deaths from cancer are expected to occur in the US in 2022, which is about 1,670 deaths a day.

These statistics do not include either basal cell or squamous cell skin cancers because US cancer registries are not required to collect information on these cancers.

These numbers also do not account for the effect the COVID-19 pandemic has likely had on cancer diagnoses and deaths because they are projections based on reported cases through 2018 and deaths through 2019.

Market for Annamycin

Digestive, reproductive, breast and respiratory cancers comprise most of expected cancer diagnoses in 2022, while cancers like leukemia and brain tumors are considered “rare diseases.”

Leukemia in particular, can be divided into acute, chronic and other, with acute lymphoblastic leukemia (ALL) and acute myeloid leukemia (AML) comprising 25,930 of the estimated 61,090 new cases expected in the United States in 2021. The National Cancer Institute estimates that cancer-related direct medical costs in the US were $183 billion in 2015 and are projected to increase to $246 billion by 2030, a 34% increase based only on population growth and aging.

However, the projection is likely an underestimate because of the growing cost of prescription medicines, with the list price for many now more than $100,000 annually.

Leukemia in particular, can be divided into acute, chronic and other, with acute lymphoblastic leukemia (ALL) and acute myeloid leukemia (AML) comprising 26,710 of the estimated 60,650 n ew cases expected in the United States in 2022. T he National Cancer Institute estimates that cancer-related direct medical costs in the US wer e $183 billion in 2015 and are projected to increase to $246 billion by 2030, a 34% i ncrease based only on population growth and aging.

However, the projection is likely an underestimate because of the growing cost of prescription medicines, with the list price for many now more than $100,000 ann ually.

Our lead drug candidate, Annamycin, is in a class of drugs referred to as anthracyclines, which are chemotherapy drugs designed to destroy the DNA of targeted cancer cells.

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estimated to rise to $1.6 billion by 2025.

Of this worldwide amount, The US market is estimated to comprise the largest share.

Of this worldwide amount, The US market is estimated to comprise the largest sha re.

Leukemia is a cancer of the white blood cells and acute forms of leukemia can manifest quickly and leave patients with limited treatment options.

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This usually begins with a therapy referred to as “7+3,”

which consists of combining seven injections of Cytarbine with 3 infusions of an anthracycline to induce remission (a complete response, or “CR”).

which consists of combining seven injections of Cytarabine with 3 infusions of an anthracycline to induce remission (a complete response, or “CR”).

This therapy had not improved since it was first used in the 1970s and we estimate that this induction therapy had a success rate of about 20% to 25%.

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These cancers can develop anywhere in the body but are found mostly in the arms, legs, chest, and abdomen.

A research paper by a recognized source of information in the industry provided market estimates to us in late 2020 and the following estimates are based on that paper.

The lungs are the most frequent site of metastasis from soft-tissue sarcomas.

From several studies, it has been estimated that around 50-60% of the STS cases develop lung metastases.

From several studies, it has been estimated that approximately 30% of the STS cases develop lung metastases.

Effective systemic therapies for metastatic STS are currently limited;

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The market is expected to grow as a result of factors like an increase in the patient pool.

The market size of STS with lung metastases in the seven major markets is expected to rise from $177 million in 2017 to reach $198 million by 2030.

The total incident population of STS with lung metastases in the seven major markets is anticipated to rise from 7,871 in 2017 to 8,698 by 2030.

According to the estimates, the highest market size of STS with lung metastases was estimated in the United States, followed by Germany.

We believe that the market size of STS with lung metastases in the seven major markets is expected to rise from $177 million in 2017 to reach $198 million by 2030.

According to our estimates, the highest market size of STS with lung metastases was estimated in the United States, followed by Germany.

The market of STS with lung metastases is categorized into first-line and second-line therapies.

The therapies in the first line of treatment involve surgery, off-label treatment, and stereotactic radiation therapy (SBRT).

It has been estimated that around 60-65% of patients taking the first-line treatment due to relapse of the disease progress on to second-line treatment.

Since there are no approved or emerging therapies for treatment of relapsed/refractory patients, first-line therapies are often used again in second-line management.

The therapies in first-line treatment involve surgery, off-label treatment, and stereotactic radiation therapy (SBRT).

We estimate that around 80% of patients taking the first-line treatment due to relapse of the disease progress on to second-line treatment.

Since we know of no approved or emerging therapies for treatment of relapsed/refractory patients, we believe that first-line therapies are often used again in second-line management.

Other cancers metastasize to the lungs, including osteosarcoma, breast and colon cancers, for which the relapsed or refractory population is estimated to exceed 8,000 in the US. In addition, there are over 20,000 annual cases of testicular, thyroid, endometrial, renal and cervical cancers which metastasize to the lungs.

Given this backdrop, we believe the best initial pathway for Annamycin is to pursue the second-line treatment of STS lung metastasis.

Market for Our WP1066 Portfolio

Our two other active development projects, WP1066 and WP1122, have potential applications (among others) in the treatment of brain tumors, another rare disease for which there are few available treatments.

Based on our research, we believe that there were approximately 60,000 pancreatic cancer diagnoses and 48,000 deaths in the US last year. Incidence of pancreatic cancer in the US is expected to grow to 90,000 by 2040. While pancreatic cancer only accounts for 3.2% of all cancer diagnoses, it has the highest mortality rate of all cancers and is the third leading cause of cancer-related deaths in the US, behind lung and colon cancer.

The most effective treatment for pancreatic cancer is surgery, but only 20% of cases are eligible for a surgical approach. The 80% of non-resectable pancreatic cancers are typically treated with chemotherapy and other pharmacotherapies. Global sales of drugs used for the treatment of pancreatic cancer, including Abraxane, Lynparza and Tarceva, exceeded $3 billion in 2020, though this figure includes sales for treatment of other cancers as well.

Abraxane will become generic in 2022 which should impact this number.

There is a tremendous amount of clinical development activity in pancreatic cancer, with 551 trials ongoing, of which 32 were late-stage.

Market for Our WP1066 (STAT3) Portfolio

Our active development program for WP1066, has potential applications (among others) in the treatment of brain tumors, another rare disease for which there are few available treatments.

The leading brain tumor drug is temozolomide, a drug introduced under the brand name Temodar.

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Clinical research on WP1066 is currently focused on the treatment of adult GBM and childhood brain tumors, including DIPG.

An industry recognized data source in late 2020 estimated that the incidence rate of primary malignant brain and central nervous system tumors in the U.S.

is 7.4 cases per 100,000 person-years.

An industry recognized data source in late 2020 estimated that the incidence rate of primary malignant brain and central nervous system tumors in the US  is 7.4 cases per 100,000 person-years.

This translates to an incidence of approximately 20,000 cases of malignant brain cancer per year.

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Gliomas (mainly glioblastoma and astrocytomas) account for 78% of malignant tumors.

Diffuse Intrinsic Pontine Glioma (DIPG) - also called:

Diffuse Interstitial Pontine Glioma (DIPG) - also called:

Pontine Glioma or Brainstem Glioma –

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The main issue with DIPG is that most of these tumors are not classified by grade because biopsy or removal of the tumor is not safe because of the location of the tumor, so they are diagnosed by their appearance on MRI.

Symptoms usually develop rapidly in the majority of patients because of the fast growth of these tumors.

Symptoms usually develop rapidly in the majority of subjects because of the fast growth of these tumors.

The most common symptoms are issues related to balance and walking;

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We believe there is a significant unmet need for an effective treatment for DIPG.

While chemotherapy trials of over 200 drugs have not shown any impact on the disease, a DIPG patient in the first cohort of the Emory University study of WP1066 responded to treatment with both a radiologic reduction in tumor size and a clinical improvement in symptoms. While this is only an “n”

of one, we believe the response this is important and encouraging, especially since we believe this was a subtherapeutic dose level.

While chemotherapy trials of over 200 drugs have not shown any impact on the disease, a DIPG subject in the first cohort of the Emory University study of WP1066 responded to treatment with both a radiologic reduction in tumor size and a clinical improvement in symptoms. While this is only an “n”

of one, we believe the response is important and encouraging, especially since we believe this was a subtherapeutic dose level.

In December 2020, we announced that the FDA had approved our request for a "Rare Pediatric Disease" designation for our drug candidate WP1066.

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Unlike other forms of non-Hodgkin lymphoma, CTCL is initially manifested as skin lesions (mycosis fungoides "MF"), but later stages involve lymph nodes, circulating tumor cells in the blood, as well as viscera.

We use an industry respected database Informa Pharma Intelligence to form the following estimates.

MF is considered a low-grade cutaneous lymphoma accounting for more than half of primary CTCLs.

MF is considered a low-grade cutaneous lymphoma which we estimate accounts for more than half of primary CTCLs.

Early-stage MF (Stages I and II;

~70% of patients) is generally treated with skin-directed treatments (topical therapy) using systemic drugs that do not have significant side effects as secondary treatments.

~70% of subjects) is generally treated with skin-directed treatments (topical therapy) using systemic drugs that do not have significant side effects as secondary treatments.

Advanced-stage MF requires more aggressive (systemic) therapies due to more extensive involvement of tissues and organs.

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The US market was estimated to represent $40 million in annual sales in 2020, yet consists of technologies that are as much as 40 years old.

Our WP1220 Proof of Concept (PoC) Trial for the treatment of CTCL was conducted in 5 patients, including the treatment of a total of 11 lesions and concluded with an objective response rate (ORR) of 45%, no adverse events and 55% stable disease, resulting in 100% clinical benefit.

We believe that a significant unmet need remains for early stage (Stages IA through IIA) CTCL, and therefore, we believe a meaningful opportunity exists for WP1220.

Our WP1220 proof of concept trial for the treatment of CTCL was conducted in 5 subjects, including the treatment of a total of 11 lesions and concluded with a lesion objective response rate (ORR) of 45%, no adverse events and 55% stable disease, resulting in 100% clinical benefit.

60% of the subjects responded with a PR. We believe that a significant unmet need remains for early stage (Stages IA through IIA) CTCL, and therefore, we believe a meaningful opportunity exists for WP1220.

Market for Our WP1122 Portfolio

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Based on our preclinical testing in vitro (against cancers and viruses) and in vivo (against certain cancers only), WP1122 appears to improve the drug-like properties of 2-DG by creating a prodrug of 2-DG that reaches much higher tissue/organ concentrations than 2-DG alone.

We believe WP1122 should be well suited as a treatment for highly glycolytic cancers such as GBM and pancreatic cancers.

In addition to the market for GBM described above, pancreatic cancer is a rare and difficult to treat form of cancer. Cancers of the exocrine pancreas are a very serious health issue in the United States where approximately 27,000 patients are diagnosed annually with pancreatic cancer while about the same number die annually from this disease.

Due to difficulties in diagnosis, the intrinsic aggressive nature of pancreatic cancers, and the sparse systemic treatment options available, only approximately 4% of patients diagnosed with pancreatic adenocarcinoma will be alive five years after diagnosis.

Pancreatic cancer is the fifth leading cause of cancer deaths following breast cancer;

We believe WP1122 should be well suited as a treatment for highly glycolytic cancers such as GBM and pancreatic cancer.

In addition to the market for GBM described above, pancreatic cancer is a rare and difficult to treat form of cancer. Cancers of the pancreas are a very serious health issue in the United States where pancreatic cancer is the fifth leading cause of cancer deaths following breast cancer;

lung cancer, colon cancer, and prostate cancer.

We believe that WP1122 may also be effective at treating COVID-19. Hundreds of drug candidates have been tested in COVID-19 since the disease became pandemic in early 2020. Many approved COVID-19 therapies, such as therapeutic antibodies and anti-the viral drugs molnupiravir and nirmatrelvir, have demonstrated activity against SARS-CoV-2, the virus which causes COVID-19. Other therapies, such as the JAK inhibitor baricitinib, act on host-based mechanisms, importantly by reducing inflammation. WP1122 is being evaluated to act by both host-based and viral mechanisms. Many experts believe that COVID-19 will eventually become endemic, and that a dynamic similar to influenza will emerge. In this scenario, we estimate that there could be approximately 4 million cases of COVID-19 in the US annually by 2027. Should WP1122 prove effective at treating COVID-19, of which there is no assurance, we expect that contract sales to governments will have an important role in the market. 

Our License Agreements

Sponsored Research and License Agreements with MD Anderson

We license all of our technology from MD Anderson and we also sponsor research there as well.

We have licensed all of our technology from MD Anderson, and we also sponsor research there as well.

Under license agreements associated with Annamycin, the WP1122 Portfolio, and the WP1066 Portfolio, all described below, we are responsible for certain license, milestone and royalty payments over the course of the agreements.

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Royalty payments can range in the single digits as a percent of net sales on drug products or flat fees as high as $0.6 million, depending upon certain terms and conditions.

Not all of these payments are applicable to every drug.

Total expenses under these agreements were $0.3 million an d $0.2 million for the year ended December 31, 2020 and 2019, respectively.

We have a sponsored research agreement with MD Anderson that currently runs until the end of October 2021.

The expenses recognized under the MD Anderson agreement with regards to the sponsored research agreement were $0.6 million and $0.5 million for the year ended December 31, 2020 and 2019, respectively.

In February 2021, we extended this Agreement until December 31, 2022 for total payment of $1.0 million spread over that period of time.

On June 29, 2017, we entered into an agreement with MD Anderson licensing certain technology related to the method of preparing Liposomal Annamycin.

Not all of these payments are applicable to every drug. Total expenses under these agreements were $0.3 million for the years ended December 31, 2021 and 2020, respectively.

We have a sponsored research agreement with MD Anderson that currently runs until the end of December 2022.

The expenses recognized under the MD Anderson agreement with regards to the sponsored research agreement were $0.7 million a nd $0.6 million for the year ended December 31, 2021 and 2020, respectively.

In July 2021, we amended the sponsored research agreement for total payment of $0.2 million to support the continuation of the project.

On June 29, 2017, we entered into a patent and technology license agreement with MD Anderson licensing certain technology related to the method of preparing Liposomal Annamycin and on December 17, 2021 we entered into an amendment to this agreement to include certain technology related to the method of reconstituting Liposomal Annamycin.

On December 2, 2021, we entered into a patent and technology license agreement with MD Anderson licensing certain technology related to lung targeted therapies with Annamycin.

The terms and payments of which are included in the summary above.

The terms of these agreements extend until the later of 20 years from the effective date of the agreements, or the expiration of the last-to-expire licensed patent.

In addition, commencing on the four-year anniversary of each agreement, MD Anderson has the right to remove any jurisdiction from such agreement, upon 90 days’

notice, if we have not commercialized or are not using commercially reasonable efforts actively and effectively to attempt to commercialize a licensed invention in such jurisdiction.

WP1066 Portfolio

The rights and obligations to a June 2010 Patent and Technology License Agreement entered into by and between Moleculin LLC and MD Anderson (the “Moleculin Agreement”) have been assigned to us.

The rights and obligations to a June 2010 Patent and Technology License Agreement entered into by and between Moleculin LLC and MD Anderson (the “2010 Agreement”) have been assigned to us.

Therefore, we have obtained a royalty-bearing, worldwide, exclusive license to intellectual property rights, including patent rights, related to our WP1066 drug product candidate.

In consideration, we must make payments to MD Anderson including an up-front payment, milestone payments and minimum annual royalty payments for sales of products developed under the license agreement.

Annual maintenance fee payments will no longer be due upon marketing approval in any country of a licensed product.

On February 3, 2022, we entered into a new patent and technology license agreement (the “2022 Agreement”) with MD Anderson licensing certain technology related to WP1066 checkpoint inhibitors.

In consideration for these agreements, we must make payments to MD Anderson including an up-front payment, milestone payments and minimum annual royalty payments for sales of products developed under the license agreement.

Annual maintenance fee payments will no longer be due upon marketing approval in any country of a licensed product under the 2010 Agreement.

One-time milestone payments are due upon commencement of the first Phase III study for a licensed product within the United States, Europe, China or Japan;

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and upon receipt of the first marketing approval for sale of a licensed product in the United States.

The rights we have obtained pursuant to the assignment of the Moleculin Agreement are made subject to the rights of the US government to the extent that the technology covered by the licensed intellectual property was developed under a funding agreement between MD Anderson and the US government.

The terms and payments of which are included in the summary above.

In February 2018, we entered into a license agreement covering a new group of molecules recently discovered in connection with research we have been sponsoring at MD Anderson Cancer Center called WP1732, a part of the WP1066 Portfolio.

As discussed above, we determined that the stability of WP1732 was less than satisfactory and, as such, in March 2021 we terminated our license for WP1732 with MD Anderson. 

The term of the 2010 Agreement extends until the later of 15 years from the effective date of the agreement, or the expiration of the last-to-expire licensed patent.

The term of the 2022 Agreement extends until the later of 20 years from the effective date of the agreement, or the expiration of the last-to-expire licensed patent.

In addition, MD Anderson may terminate the 2022 Agreement if we fail to file for an IND for a Phase 1 study before February 2, 2025 in the United States, France, Germany, Italy, Spain, the United Kingdom or China.

WP1122 Portfolio

The rights and obligations to an April 2012 Patent and Technology License Agreement entered into by and between IntertechBio and MD Anderson have been assigned to us.

The rights and obligations to an April 2012 Patent and Technology License Agreement entered into by and between IntertechBio and MD Anderson (the “2012 Agreement”) have been assigned to us.

Therefore, we have obtained a royalty-bearing, worldwide, exclusive license to intellectual property, including patent rights, related to our WP1122 Portfolio and to our drug product candidate, WP1122.

The terms and payments of which are included in the summary above.

This agreement was amended in May 2020 to provide for extension of a certain milestone requirement and allowed for us to extend such milestone upon our request and extension payment. The initial milestone required us to file an IND with the FDA for a Phase I study by February 20, 2021.

We extended the deadline for this milestone by six months by making the required extension payment, and we have the right to receive two additional six-month extensions in the future by making additional extension payments.

On December 3, 2021, we entered into a new patent and technology license agreement (the “2021 Agreement”) with MD Anderson licensing certain technology related to WP1122 anti-viral treatments.

The terms and payments of these agreements are included in the summary above.

The 2012 Agreement was amended in May 2020 to provide for extension of a certain milestone requirement and allowed for us to extend such milestone upon our request and extension payment. The initial milestone required us to file an IND with the FDA for a Phase I study by February 20, 2021.

We extended the deadline for this milestone to August 20, 2021 by paying an extension fee.

On August 3, 2021, we filed a CTA in the United Kingdom to commence a Phase 1a clinical trial of WP1122.

MD Anderson agreed that this CTA filing would further extend the deadline to file an IND with the FDA for a Phase I study until February 2022.

In December 2021, we submitted an IND for the treatment of GBM with WP1122 to the FDA, thus meeting the IND filing milestone.

The term of the 2012 agreement extends until the later of 15 years from the effective date of the agreement, or the expiration of the last-to-expire licensed patent.

In addition, MD Anderson may terminate the 2012 agreement if we fail to commence a Phase 1 study for a licensed product prior to November 20, 2022;

or if we fail to commence a Phase 2 study for licensed product prior to November 20, 2024.

The term of the 2021 agreement extends until the later of 20 years from the effective date of the agreement, or the expiration of the last-to-expire licensed patent.

In addition, MD Anderson may terminate the 2021 agreement if we fail to file an IND or its foreign equivalent for a Phase 1 study for a licensed product prior to December 3, 2024;

or if we fail to commence a Phase 1 study for licensed product prior to December 3, 2026.

We believe that the filing and clearance of a WP1122 Phase 1 clinical trial for COVID-19 in the UK and subsequent start of that trial will meet these milestone requirements.

WPD Licensing Agreement

On February 19, 2019, we sublicensed certain intellectual property rights, including rights to Annamycin, our WP1122 portfolio, and our WP1066 portfolio to WPD Pharmaceuticals (WPD), which sublicense was amended on March 22, 2021 (the “WPD Agreement”).

On December 20, 2021, we amended our sublicense agreement with WPD Pharmaceuticals (WPD), originally entered into on February 19, 2019, pursuant to which we sublicensed to WPD certain intellectual property rights, including rights to Annamycin, its WP1122 portfolio, and its WP1066 portfolio, which sublicense was previously amended on March 22, 2021 (as amended, the “WPD Agreement”).

WPD is affiliated with Dr.

Waldemar Priebe, our founder.

Under the WPD Agreement, we granted WPD a royalty-bearing, exclusive license to research, develop, manufacture, have manufactured, use, import, offer to sell and/or sell products in the field of human therapeutics under the licensed intellectual property in the countries of Poland, Estonia, Latvia, Lithuania, Belarus, Ukraine, Moldova, Romania, Armenia, Azerbaijan, Georgia, Slovakia, Czech Republic, Hungary, Uzbekistan, Kazakhstan, Greece, Austria, Russia, Netherlands, Turkey, Belgium, Switzerland, Sweden, Portugal, Norway, Denmark, Ireland, Finland, Luxembourg, Iceland (“licensed territories”).

In consideration for entering into the WPD Agreement, WPD agreed that it must use Commercially Reasonable Development Efforts to develop and commercialize products in the licensed territories.

For purposes of the WPD Agreement, the term “Commercially Reasonable Development Efforts”

means the expenditure, either directly or through the guarantees of grants, by or on behalf of WPD or any of its affiliates of at least:

(i) $2.5 million during the first four years of the agreement on the research, development and commercialization of products in the licensed territories;

and (ii) $1.0 million annually for the four years thereafter on the research and development of products in the licensed territories.

During the term of the WPD Agreement, to the extent we are required to make any payments to MD Anderson pursuant to our license agreements with MD Anderson, whether a milestone or royalty payment, as a result of the research and development or sale of a sublicensed product, WPD shall be required to advance or reimburse us such payments.

In further consideration for the rights granted by us to WPD under the WPD Agreement, WPD agreed to pay us a royalty percentage at a rate equal to the royalty rate we owe MD Anderson under our license agreements with MD Anderson plus an additional royalty (the “override royalty percentage”) equal to 1.0% of net sales of any sublicensed products, provided, however, if WPD spends:

(i) more than $7.5 million in Commercially Reasonable Development Efforts, the override royalty percentage will decrease to 0.75% of net sales;

or (ii) more than $9.5 million in Commercially Reasonable Development Efforts, the override royalty percentage will decrease to 0.5% of net sales.

Pursuant to the WPD Agreement, WPD agreed that it must use Commercially Reasonable Development Efforts (CRDE) to develop and commercialize products in the licensed territories.

For purposes of the WPD Agreement, the term CRDE means the expenditure, either directly or through the guarantees of grants, by or on behalf of WPD or any of its affiliates of at least:

(i) $2,500,000 during the first four (4) years (the “Initial Hurdle Date”) immediately following the date of the original agreement, or February 19, 2019, on the research, development and commercialization of sublicensed products in the licensed territories;

and (ii) a minimum of $2,100,000 annually for each of the five (5) years after the Initial Hurdle Date on the research and development of sublicensed products in the licensed territories.

The total minimum required total CRDE is $14.0 million.

In further consideration for the rights granted by us to WPD under the WPD Agreement, WPD agreed to pay us a royalty percentage at a rate equal to the royalty rate owed MD Anderson under our license agreements with MD Anderson plus an additional royalty (the “override royalty percentage”) equal to 1.0% of net sales of any sublicensed products, provided, however, if WPD spends:

(i) more than $14.0 million in CRDE, the override royalty percentage will decrease to 0.75% of net sales;

or (ii) more than $17.0 million in CRDE, the override royalty percentage will decrease to 0.5% of net sales.

With certain exceptions, the WPD Agreement will remain in full force and effect until the expiration of the last patent within the sublicensed patents.

Notwithstanding the foregoing, we have the right, in our sole discretion, to terminate the WPD Agreement in whole, or to materially amend the agreement by removing a portion of the sublicensed subject matter, in connection with certain fundamental transactions or in connection with the granting to an unaffiliated third party of a license or sublicense to all or to a material portion of the sublicensed subject matter within all or substantially all of the licensed territories (such event, the “buyback event”) by making a payment to WPD equal to a percentage of the consideration after transaction costs we receive in connection with the buyback event.

The percentage payable will be the greater of:

or (ii) 10% multiplied by a fraction (A) the numerator of which is the total dollar amount of expenditures made by WPD that represent Commercially Reasonable Development Efforts under the WPD Agreement, up to a maximum of $6.5 million;

and (B) the denominator of which is $6.5 million.

Prior to approval of the WPD Agreement, our board of directors received a fairness opinion from Roth Capital Partners, LLC stating their opinion that the consideration we will receive from WPD pursuant to the WPD Agreement is fair, from a financial point of view, to us.

Prior to approval of the March 2021 amendment to the WPD Agreement, our board of directors received a fairness opinion from Maxim Group, LLC stating their opinion that the consideration we will receive from WPD pursuant to the amended WPD Agreement is fair, from a financial point of view, to us.

Notwithstanding the foregoing, we have the right, in our sole discretion, to terminate the WPD Agreement in whole, or to materially amend the agreement by removing a portion of the sublicensed subject matter, in connection with certain fundamental transactions or in connection with the granting to an unaffiliated third party of a license or sublicense to all or to a material portion of the sublicensed subject matter within all or substantially all of the licensed territories (such event, the “buyback event”) by making a payment to WPD based on the percentage of licensed territories involved in the buyback event as compared to the overall world healthcare spend and the extent to which WPD has satisfied its CRDE requirements.

On December 19, 2021, we consented to allow WPD, upon a default to a third-party lender that had advanced funds to WPD (the “Lender”), to assign the WPD Agreement to the Lender, subject to certain conditions and subject to the Lender granting us the right to terminate the WPD Agreement upon any assignment as follows.

If the assignment occurs, we have the right at any time during the remaining term of the WPD Agreement to terminate the agreement by paying the Lender $1.7 million (the “Termination Fee”) in the form of $1.0 million in cash and the issuance to Lender of our common stock valued at the remaining balance due (based on valuing each share of common stock issued at the greater of $3.00 per share or 30% less than the five day trading average of the common stock for the five trading days prior to the date the notice of termination is delivered;

provided that if the assignment occurs and if we do not exercise the above termination right within 90 days of the Assignment Date:

(i) the Initial Hurdle Date will be extended for a period of 3 years;

and (ii) the Termination Fee shall increase (A) $2.0 million prior to the later of March 1, 2023 or 105 days from the assignment date;

(B) $2.2 million prior to the later of March 1, 2024 or one year and 105 days from the assignment date;

or, (C) $2.4 million thereafter.

Upon any assignment, we will pay the Lender $0.2 million to cover legal and transaction fees related to the termination.

Animal Life Sciences Licensing Agreement

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Under the ALI Agreement, we granted ALI a worldwide royalty-bearing, exclusive license to research, develop, manufacture, have manufactured, use, import, offer to sell and/or sell products in the field of non-human animals under the licensed intellectual property.

This license is subject to the terms in the prior agreements entered into by the Company and MDA.

ALI granted us the right to name an observer to ALI's board of directors.

On August 8, 2019, the Company named its Chairman and CEO Walter V.

Klemp to that position.

This license is subject to the terms in the prior agreements entered into by the Company and MD Anderson.

During the term of the ALI Agreement, to the extent we are required to make any payments to MD Anderson pursuant to our license agreements with MD Anderson, whether a milestone or royalty payment, as a result of the research and development or sale of a sublicensed product, ALI shall be required to advance or reimburse us such payments.

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With certain exceptions, the ALI Agreement will remain in full force and effect until the expiration of the last patent within the sublicensed patents.

Other Licenses

In 2015, we obtained the rights and obligations for certain patent and technology development and license agreements with Dermin sp.

In connection with such agreements, certain intellectual property rights related to Annamycin, our WP1122 portfolio, and our WP1066 portfolio were licensed to Dermin and Dermin was granted a royalty-bearing, exclusive license to manufacture, have manufactured, use, import, offer to sell and/or sell products in the field of human therapeutics under the licensed intellectual property.

With respect to Annamycin, the license is limited to the countries of Poland, Ukraine, Czech Republic, Hungary, Romania, Slovakia, Belarus, Lithuania, Latvia, Estonia, Netherlands, Turkey, Belgium, Switzerland, Austria, Sweden, Greece, Portugal, Norway, Denmark, Ireland, Finland, Luxembourg, Iceland, Kazakhstan, Russian Federation, Uzbekistan, Georgia, Armenia, Azerbaijan and Germany;

provided that we had the right to remove Germany from the list of covered territories with a $0.5 million payment.

With respect to WP1122, the license is limited to the countries of Belarus, Russia, Kazakhstan, Uzbekistan, Turkmenistan, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Ukraine.

With respect to WP1066, the license is limited to the countries of Belarus, Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, Slovakia and Ukraine.

In each case, Dermin agreed to pay a royalty for the sale of any licensed product in the licensed territories and agreed to pay all out-of-pocket expenses incurred in filing, prosecuting and maintaining the licensed patents for which the license has been granted in the licensed territories.

Dermin also agreed to provide a percentage of certain consideration that Dermin receives pursuant to sublicense agreements.

Prior Sublicenses

In 2015, we entered into certain patent and technology development and license agreements with Dermin sp.

In July 2019, Dermin assigned its rights under the foregoing license agreements to an affiliated entity, Exploration Invest Pte Ltd.

(Exploration).

On July 30, 2019, we and Exploration entered into a License Modification Agreement pursuant to which we agreed to issue Exploration shares of Company common stock valued at $0.5 million (based on the greater of the closing price of the common stock on the date of the agreement or the 10-day average closing price prior to the date of the agreement) in exchange for the modifying the license agreements to:

On July 30, 2019, we and Exploration entered into an agreement pursuant to which we issued Exploration shares of Company common stock valued at $0.5 million (based on the greater of the closing price of the common stock on the date of the agreement or the 10-day average closing price prior to the date of the agreement) in exchange for the modifying the license agreements to:

(i) limit the licensed territory solely to Poland;

and (ii) limit the patent rights and technology rights licensed to Exploration to the patent rights and technology rights that existed on the date the original license agreements were entered into with Dermin.

On August 8, 2019, we issued 71,663 shares of common stock (taking into account the reverse stock split completed January 29, 2021) to Exploration to satisfy this commitment.

In February 2022, we entered into a termination agreement with Exploration pursuant to which Exploration agreed to terminate all the above licenses for a one-time payment of $400,000.

As of the date hereof, all the above licenses have been terminated.

Corporate History

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The reverse stock split was effected in accordance with the authorization adopted by our stockholders at our 2020 annual meeting of stockholders.

In July 2021, we formed Moleculin Amsterdam B.V., a wholly owned subsidiary, primarily to act as our legal representative for clinical trials in Europe for Moleculin Biotech, Inc.

We operate in a highly competitive segment of the pharmaceutical market, which market is highly competitive as a whole.

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These include a wide array of products against cancer targeting many of the same indications as our drug candidates.

While the introduction of newer targeted agents may result in extended overall survival, induction therapy regimens are likely to remain a cornerstone of cancer treatment in the foreseeable future.

While the introduction of newer targeted agents may result in extended overall survival, we believe that induction therapy regimens are likely to remain a cornerstone of cancer treatment in the foreseeable future.

There are a number of established therapies that may be considered competitive for the cancer indications for which we intend to develop our lead product candidate, Annamycin.

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Despite this extension of overall survival, Vyxeos did not reduce the toxic side effects of daunorubicin (including cardiotoxicity) and it failed to qualify a majority of patients for curative bone marrow transplant.

With these results, Jazz Pharmaceuticals acquired Celator in 2016 and obtained FDA approval, making Vyxeos the new first line standard of care for the treatment of AML

With these results, Jazz Pharmaceuticals acquired Celator in 2016 and obtained FDA approval.

More recently, a new drug called venetoclax, which is indicated for the treatment of chronic lymphocytic leukemia (CLL) and small lymphocytic lymphoma (SLL) in combination with certain antibody therapies, has been found to be effective for the treatment of AML.

Drugs attempting to target a subset of AML patients who present with specific gene mutations, such as one referred to as FLT3, have recently received FDA approval, but by definition serve only subsets of the AML population.

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In addition, any such competing therapy may be more effective and/or cost-effective than ours.

Soft-tissue sarcomas which have metastasized to the lungs are extremely difficult to treat. There are an estimated 13,600 new cases of soft-tissue sarcoma diagnosed each year, and of those that metastasize, approximately 70% of metastases occur to the lungs. The current standard of care consists of anthracycline therapy or newer-generation drugs such as pazopanib. However, only 20% of patients with STS lung metastases respond to these treatments. There are competitive efforts underway to develop new treatments for STS, including metastatic STS, but few specifically target STS metastases to the lungs.

Non-resectable pancreatic cancers are typically treated with chemotherapy and other pharmacotherapies, including Abraxane, Lynparza and Tarceva. While these products have been commercially successful, their success rates at treating pancreatic cancer are low and fatality rates remain high. This has led to a tremendous amount of clinical development activity in pancreatic cancer, with 551 trials ongoing, resulting in significant competition for pancreatic cancer patients among clinical trials, which could impact development timelines.

Several products have established efficacy for the treatment of SARS-CoV-2 infection and COVID-19, and the continued development of additional therapies has resulted in competition for patients in clinical trials. Products which have obtained approval, either on an emergency use basis or pursuant to full regulatory review, include antiviral antibody therapies from Lilly, Regeneron, GSK and AstraZeneca;

small molecule antiviral drugs from Pfizer and Merck;

and targeted anti-inflammatory drugs from Lilly and others. If proven to be effective against COVID-19, WP1122 would be expected to compete with other host-based therapies including targeted anti-inflammatory drugs.

Competition for other indications targeted for each of our drug candidates is described above.

Government Regulation

Government authorities in the US, at the federal, state and local level, and in other countries extensively regulate, among other things, the research, development, testing, manufacture, quality control, approval, labeling, packaging, storage, record-keeping, promotion, advertising, distribution, post-approval monitoring and reporting, marketing and export and import of products such as those we are developing.

The pharmaceutical drug product candidates that we develop must be approved by the FDA before they may be marketed and distributed.

In the United States, the FDA regulates pharmaceutical products under the Federal Food, Drug, and Cosmetic Act, and implementing regulations.

Government authorities at the federal, state and local level in the US, and in analogous levels in other countries extensively regulate, among other things, the development, testing, manufacture, quality control, safety, effectiveness, approval, labeling, packaging, storage, distribution, import, export, record-keeping, reporting, promotion, advertising, distribution, marketing and export and import of products such as those we are developing.

The pharmaceutical drug product candidates that we develop must be approved by the FDA before they may be marketed and commercially distributed in the US, and by regulators in other countries before being marketed and commercially distributed there.

In the United States, the FDA regulates pharmaceutical products such as our product candidates under the Federal Food, Drug, and Cosmetic Act and implementing regulations.

Pharmaceutical products are also subject to other federal, state and local statutes and regulations.

The process of obtaining regulatory approvals and the subsequent compliance with appropriate federal, state, local and foreign statutes and regulations require the expenditure of substantial time and financial resources.

Failure to comply with the applicable US requirements at any time during the product development process, approval process or after approval, may subject an applicant to administrative or judicial sanctions.

FDA and related enforcement activity could include refusal to approve pending applications, withdrawal of an approval, a clinical hold, warning letters, product recalls, product seizures, total or partial suspension of production or distribution injunctions, fines, refusals of government contracts, restitution, disgorgement or civil or criminal penalties.

Obtaining regulatory approvals and complying with post-approval requirements generally is expensive, labor-intensive and time-consuming.

Failure to comply with the applicable requirements may subject an applicant to administrative or judicial enforcement action, which could include refusal to permit clinical trials, refusal to approve an application, withdrawal of an approval, issuance of a warning letter, product recall, product seizure, suspension of production or distribution, fines, refusals of government contracts, and restitution, disgorgement or civil or criminal penalties.

Any agency or judicial enforcement action could have a material adverse effect on us.

Development and Approval

The process required by the FDA before a pharmaceutical product may be marketed in the US generally involves the following:

Completion of preclinical laboratory tests, animal studies and formulation studies according to Good Laboratory Practices and in accordance with the Animal Welfare Act or other applicable regulations;

Submission to the FDA of an Investigational New Drug application, or IND, which must become effective before human clinical studies may begin;

Performance of adequate and well-controlled human clinical studies according to the FDA’s current good clinical practices (GCP), to establish the safety and efficacy of the proposed pharmaceutical product for its intended use;

Submission to the FDA of an NDA for a new pharmaceutical product;

Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the pharmaceutical product is produced, to assess compliance with current good manufacturing practices (cGMP), to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical product’s identity, strength, quality and purity;

Potential FDA audit of the preclinical and clinical study sites that generated the data in support of the NDA;

FDA review and approval of the NDA.

The lengthy process of seeking required approvals and the continuing need for compliance with applicable statutes and regulations require the expenditure of substantial resources and approvals, and continued compliance are inherently uncertain.

Before testing any compounds with potential therapeutic value in humans, the pharmaceutical product candidate enters the preclinical testing stage.

Preclinical tests include laboratory evaluations of product chemistry, toxicity and formulation, as well as animal studies to assess the potential safety and activity of the pharmaceutical product candidate.

These early proof-of-principle studies are done using sound scientific procedures and thorough documentation.

The conduct of the single and repeat dose toxicology and toxicokinetic studies in animals must comply with federal regulations, laws and requirements including good laboratory practices.

The sponsor must submit the results of the preclinical tests, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol, to the FDA as part of the IND.

The IND automatically becomes effective 30 days after receipt by the FDA, unless the FDA has concerns and notifies the sponsor.

In such a case, the IND sponsor and the FDA must resolve any outstanding concerns before the clinical study can begin.

If resolution cannot be reached within the 30-day review period, either the FDA places the IND on clinical hold or the sponsor withdraws the application.

The FDA may also impose clinical holds on a pharmaceutical product candidate at any time before or during clinical studies for various reasons.

Accordingly, we cannot be sure that submission of an IND will result in the FDA allowing clinical studies to begin, or that, once begun, issues will not arise that suspend or terminate such clinical study.

Clinical studies involve the administration of the pharmaceutical product candidate to healthy volunteers or patients under the supervision of qualified investigators, generally physicians not employed by or under the clinical study sponsor’s control.

Clinical studies are conducted under protocols detailing, among other things, the objectives of the clinical study, dosing procedures, subject selection and exclusion criteria, how the results will be analyzed and presented and the parameters to be used to monitor subject safety.

Completion of preclinical laboratory tests, animal studies and formulation studies;

Submission to the FDA of an Investigational New Drug application, or IND, which must become effective before human clinical trials may begin;

Performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as good clinical practices (GCP) and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed pharmaceutical product for its intended use;

Submission to the FDA of an NDA for marketing approval that includes substantial evidence of safety and effectiveness from results of clinical trials, as well as the results of preclinical testing, detailed information about the chemistry, manufacturing and controls, and proposed labeling and packaging for the product;

Review of the product candidate by an FDA advisory committee, if applicable;

Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the pharmaceutical product is produced, to assess compliance with current good manufacturing practice, or cGMP, requirements, to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical product’s identity, strength, quality and purity;

Potential FDA audit of the preclinical and clinical trial sites that generated the data in support of the NDA;

FDA review and approval of the NDA, including agreement on post-marketing commitments, if applicable.

The development and approval process, as well as post-approval requirements and restrictions, require substantial resources, attention and effort, and the prospects for approval and continued compliance are inherently uncertain.

Preclinical Testing.

Before testing any compound in humans in the US, a company must generate extensive preclinical data.

Preclinical testing generally includes laboratory evaluation of product chemistry and formulation, as well as toxicological and pharmacological studies in animals to assess the product’s safety and activity.

The preclinical work must be done in accordance with Good Laboratory Practice, or GLP, requirements, the Animal Welfare Act, and other applicable regulations.

The sponsor must submit the preclinical data in an IND, together with manufacturing information, analytical data, any available clinical data or literature and a proposed clinical protocol.

Unless the FDA notifies the sponsor otherwise, an IND becomes effective 30 days after receipt by the FDA, and the proposed clinical trial may begin.

If it expresses concerns to the sponsor, FDA may impose a “clinical hold,”

which precludes beginning the study until the issues are resolved.

Similarly, once a study has begun, the FDA may impose a clinical hold suspending further activity, pending resolution of agency concerns.

Accordingly, we cannot be sure that submission of an IND will result in a clinical trial beginning or that, once begun, a clinical trial will not be suspended or terminated.

IND Application.

Clinical trials involve the administration of the product candidate to healthy volunteers or subjects with the targeted disease under the supervision of qualified investigators, generally physicians not employed by or under the clinical trial sponsor’s control.

Clinical trials are conducted under protocols detailing, among other things, the objectives of the clinical trial, dosing procedures, subject selection and exclusion criteria, how the results will be analyzed and presented and the parameters to be used to monitor subject safety.

Each protocol must be submitted to the FDA as part of the IND.

Clinical studies must be conducted in accordance with GCP.

Further, each clinical study must be reviewed and approved by an independent institutional review board (IRB) at, or servicing, each institution at which the clinical study will be conducted.

An IRB is charged with protecting the welfare and rights of study participants and considers such items as whether the risks to individuals participating in the clinical studies are minimized and are reasonable in relation to anticipated benefits.

The IRB also approves the informed consent form that must be provided to each clinical study subject or his or her legal representative and must monitor the clinical study until completed.

Human clinical studies are typically conducted in three sequential phases that may overlap or be combined:

The pharmaceutical product is initially introduced into healthy human subjects and tested for safety, dosage tolerance, absorption, metabolism, distribution and excretion.

In the case of some products for severe or life-threatening diseases such as cancer, especially when the product may be too inherently toxic to ethically administer to healthy volunteers, the initial human testing is often conducted in patients, with a goal of characterizing the safety profile of the drug and establishing a maximum tolerable dose (MTD).

Our pharmaceutical products fall into this latter category because its products are intended to treat cancer and contain cytotoxic agents.

Hence, our Phase 1 studies are conducted in late-stage cancer patients whose disease has progressed after treatment with other agents.

With the maximum tolerable dose established in a Phase 1 trial, the pharmaceutical product is evaluated in a limited patient population at the MTD to identify possible adverse effects and safety risks, to preliminarily evaluate the efficacy of the product for specific targeted diseases, to determine dosage tolerance, optimal dosage and dosing schedule and to identify patient populations with specific characteristics where the pharmaceutical product may be more effective.

Clinical studies are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical study sites.

These clinical studies are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling.

Clinical trials must be conducted in accordance with FDA’s good clinical practice, or GCP, regulations, which are intended to safeguard study subjects and support the validity of the resultant data.

Further, each clinical trial must be reviewed and approved by an independent institutional review board (IRB) at, or servicing, each institution at which the clinical trial will be conducted.

An IRB is charged with protecting the welfare and rights of study participants and for determining that the risks to study participants are minimized and are reasonable in relation to anticipated benefits.

The IRB also approves the informed consent form that each study subject (or his or her legal representative) must sign, and is responsible for monitoring the conduct of the study until completed.

Clinical testing.

Human clinical trials are typically conducted in three sequential phases that may overlap or be combined:

The pharmaceutical product is initially administered to humans, usually a small group of healthy human subjects, but occasionally to subjects with the targeted disease.

This latter case is usually reserved for product candidates intended for severe or life-threatening diseases (such as cancer) and/or when the product may be too inherently toxic to ethically administer to healthy volunteers.

Phase 1 trials generally are intended to determine the metabolism and pharmacologic actions of the drug, the side effects associated with increasing doses, and, if possible, to gain early evidence of effectiveness. Because our product candidates are being studied for treating cancers and contain cytotoxic agents, our Phase 1 studies are conducted in late-stage cancer patients whose disease has progressed after treatment with other agents, and are focused on establishing a maximum tolerable dose (MTD).

Here the product candidate is evaluated in a limited patient population to develop data regarding effectiveness, to determine dosage tolerance, optimal dosage and dosing schedule, to gather additional safety information, and to identify patient populations with specific characteristics where the pharmaceutical product may be more effective.

Clinical trials are undertaken to further evaluate dosage, clinical efficacy and safety in an expanded patient population at geographically dispersed clinical trial sites.

These clinical trials are intended to establish the overall risk/benefit ratio of the product and provide an adequate basis for product labeling.

The studies must be well controlled and usually include a control arm for comparison.

One or two Phase 3 studies are usually required by the FDA for an NDA approval, depending on the disease severity and other available treatment options.

In some instances, an NDA approval may be obtained based on Phase 2 clinical data with the understanding that the approved drug can be sold subject to a confirmatory trial to be conducted post-approval.

Post-approval studies, or Phase 4 clinical studies, may be conducted after initial marketing approval.

These studies are often used to gain additional experience from the treatment of patients in the intended therapeutic indication.

The FDA also may require Phase 4 studies, Risk Evaluation and Mitigation Strategies (REMS) and post-marketing surveillance, among other things, to monitor the effects of an approved product or place conditions on an approval that could restrict the distribution or use of the product.

Progress reports detailing the results of the clinical studies must be submitted at least annually to the FDA and written IND safety reports must be submitted to the FDA and the investigators for serious and unexpected adverse events or any finding from tests in laboratory animals that suggests a significant risk for human subjects.

Phase 1, Phase 2 and Phase 3 clinical studies may not be completed successfully within any specified period, if at all.

The FDA or the sponsor or its data safety monitoring board may suspend a clinical study at any time on various grounds, including a finding that the research subjects or patients are being exposed to an unacceptable health risk.

Similarly, an IRB can suspend or terminate approval of a clinical study at its institution if the clinical study is not being conducted in accordance with the IRB’s requirements or if the pharmaceutical product has been associated with unexpected serious harm to patients.

Concurrent with clinical studies, companies may complete additional animal studies and must also develop additional information about the chemistry and physical characteristics of the pharmaceutical product as well as finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

The manufacturing process must be capable of consistently producing quality batches of the pharmaceutical product candidate and, among other things, must develop methods for testing the identity, strength, quality and purity of the final pharmaceutical product.

Additionally, appropriate packaging must be selected and tested, and stability studies must be conducted to demonstrate that the pharmaceutical product candidate does not undergo unacceptable deterioration over its shelf life.

The results of product development, preclinical studies and clinical studies, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the pharmaceutical product, proposed labeling and other relevant information are submitted to the FDA as part of an NDA requesting approval to market the product.

The submission of an NDA is subject to the payment of substantial user fees.

A waiver of such fees may be obtained under certain limited circumstances.

The FDA reviews all NDAs submitted before it accepts them for filing and may request additional information rather than accepting an NDA for filing.

Once the submission is accepted for filing, the FDA begins an in-depth review of the NDA.

Under the goals and policies agreed to by the FDA under the Prescription Drug User Fee Act (PDUFA), the FDA has 10 months after the 60-day filing date in which to complete its initial review of a standard review NDA and respond to the applicant, and six months after the 60-day filing date for a priority review NDA.

The FDA does not always meet its PDUFA goal dates for standard and priority NDAs.

After the NDA submission is accepted for filing, the FDA reviews the NDA application to determine, among other things, whether the proposed product is safe and effective for its intended use, and whether the product is being manufactured in accordance with cGMP to assure and preserve the product’s identity, strength, quality and purity.

In some instances, an NDA approval may be obtained based on Phase 2 clinical data, often with the understanding that the approved drug can be sold subject to a confirmatory trial to be conducted post-approval.

Additionally, post-approval studies, also referred to as Phase 4 clinical trials, may be conducted after initial marketing approval.

These studies are often used to gain additional information about use of the product for its approved indication, and may at times be required by the FDA as a condition of approval.

Clinical trials require submission of annual progress reports to the FDA, and certain events, especially safety-related information, may require making reports to the FDA, investigators, and/or the IRB, and can lead to suspension, modification, or cessation of ongoing trials.

Accordingly, clinical trials may not be completed successfully within any specified period, if at all.

Concurrent with clinical trials, companies usually complete additional animal studies, develop additional information about the physical characteristics of the product candidate and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.

The sponsor of a clinical trial or the sponsor’s designated responsible party may be required to register certain information about the trial and disclose certain results on government or independent registry websites, such as ClinicalTrials.gov.

Additionally, a manufacturer of an investigational drug for a serious disease or condition is required to make available, such as by posting on its website, its policy on evaluating and responding to requests for individual patient access to such investigational drug.

This requirement applies on the earlier of the first initiation of a Phase 2 or Phase 3 trial of the investigational drug or, as applicable, 15 days after the drug receives a designation as a breakthrough therapy, fast track product, or regenerative medicine advanced therapy.

NDA Submission and Review.

The results of product development, preclinical studies and clinical trials, along with descriptions of the manufacturing process, analytical tests conducted on the chemistry of the pharmaceutical product candidate, proposed labeling and other relevant information are submitted to the FDA as part of an NDA seeking approval to market the product.

Under the Prescription Drug User Fee Act (PDUFA), as amended, the submission of an NDA is subject to the payment of a substantial fee, although the fee may be waived under certain circumstances, which may or may not be applicable to us or our partners for any of our product candidates. In addition, under the Pediatric Research Equity Act, as amended, an NDA or supplement to an NDA generally must contain data to assess the safety and effectiveness of the product candidate for the claimed indications in all relevant pediatric subpopulations and to support dosing and administration for each pediatric subpopulation for which the product is safe and effective.

The FDA may grant deferrals for submission of data or full or partial waivers depending on the designated pathway for submission.

The FDA first examines a submitted NDA to determine if the application is sufficiently complete to be accepted for review.

If not, the agency may refuse to file the NDA, informing the sponsor of inadequacies to be addressed in a resubmitted application.

In this event, the NDA must be resubmitted with the additional information.

The resubmitted application also is subject to review before the FDA accepts it for filing.

Once an NDA is accepted for filing, the FDA begins an in-depth review of the application.

Pursuant to goals established under PDUFA, the FDA aims to complete the review within 10 months of the 60-day filing date, which would be within 12 months of the date of submission, but that deadline is extended in certain circumstances, including by FDA requests for additional information or clarification.

The FDA also has programs intended to expedite the development and review of new drugs intended to treat serious or life-threatening conditions and address unmet medical needs and/or provide benefits over existing therapies.

They include:

Priority Review, under which FDA aims to complete the NDA review within eight months of the date of submission;

Accelerated Approval, where a product may be approved on the basis of data demonstrating an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality (IMM) that is reasonably likely to predict an effect on IMM or other clinical benefit;

Fast Track, which may provide for FDA review of sections of the NDA on a rolling basis, before the complete application is submitted;

Breakthrough Therapy, which also provides for rolling review and other actions to expedite review of the NDA.

The availability of these programs is determined by the facts surrounding each specific product candidate, the disease or condition it is intended to treat, and the availability and characteristics of alternative treatments.

Because those factors are subject to change, even if a product or application is granted designation for one (or more) of these programs, the benefits of the program may ultimately not be available.

Additionally, the FDA may rescind designations for certain expedited programs (specifically, Fast Track and Breakthrough Therapy) if the agency determines the product candidate no longer meets the criteria for such programs.

The FDA review of an NDA focuses on determining, among other things, whether the proposed product candidate is safe and effective for its intended use, and whether the product candidate is being manufactured in accordance with cGMP to assure and preserve the product candidate’s identity, strength, quality and purity.

The FDA may refer applications for novel pharmaceutical products or pharmaceutical products which present difficult questions of safety or efficacy to an advisory committee, typically a panel that includes clinicians and other experts, for review, evaluation and a recommendation as to whether the application should be approved and under what conditions.

The FDA is not bound by the recommendations of an advisory committee, but it considers such recommendations carefully when making decisions.

During the pharmaceutical product approval process, the FDA also will determine whether a risk evaluation and mitigation strategy (REMS) is necessary to assure the safe use of the pharmaceutical product.

If the FDA concludes that a REMS is needed, the sponsor of the NDA must submit a proposed REMS;

the FDA will not approve the NDA without a REMS, if required.

Before approving an NDA, the FDA will inspect the facilities at which the product is manufactured.

The FDA will not approve the product unless it determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving an NDA, the FDA will typically inspect one or more clinical sites as well as the site where the pharmaceutical product is manufactured to assure compliance with GCP and cGMP.

If the FDA determines the application, manufacturing process or manufacturing facilities are not acceptable, it will outline the deficiencies in the submission and often will request additional testing or information.

In addition, the FDA will require the review and approval of product labeling.

The NDA review and approval process is lengthy and difficult and the FDA may refuse to approve an NDA if the applicable regulatory criteria are not satisfied or may require additional clinical data or other data and information.

Even if such data and information is submitted, the FDA may ultimately decide that the NDA does not satisfy the criteria for approval.

Data obtained from clinical studies are not always conclusive and the FDA may interpret data differently than we interpret the same data.

The FDA will issue a complete response letter if the agency decides not to approve the NDA.

The complete response letter usually describes all of the specific deficiencies in the NDA identified by the FDA.

The deficiencies identified may be minor, for example, requiring labeling changes, or major, for example, requiring additional clinical studies.

Additionally, the complete response letter may include recommended actions that the applicant might take to place the application in a condition for approval.

If a complete response letter is issued, the applicant may either resubmit the NDA, addressing all of the deficiencies identified in the letter, or withdraw the application.

If a product receives regulatory approval, the approval may be significantly limited to specific diseases and dosages or the indications for use may otherwise be limited, which could restrict the commercial value of the product.

Further, the FDA may require that certain contraindications, warnings or precautions be included in the product labeling.

In addition, the FDA may require Phase 4 testing which involves clinical studies designed to further assess pharmaceutical product safety and effectiveness and may require testing and surveillance programs to monitor the safety of approved products that have been commercialized.

Expedited Development and Review Programs

The FDA has a Fast Track program that is intended to expedite or facilitate the process for reviewing new pharmaceutical products that meet certain criteria.

Specifically, new pharmaceutical products are eligible for Fast Track designation if they are intended to treat a serious condition and data demonstrate the potential to address unmet medical needs for the condition.

Fast Track designation applies to the combination of the product and the specific indication for which it is being studied.

Unique to a Fast Track product, the FDA may consider for review sections of the NDA on a rolling basis before the complete application is submitted, if the sponsor provides a schedule for the submission of the sections of the NDA, if the FDA determines that the schedule is acceptable and if the sponsor pays any required user fees upon submission of the first section of the NDA.

Any product submitted to the FDA for market, including a Fast Track program, may also be eligible for other FDA programs intended to expedite development and review, such as priority review and accelerated approval.

Any product is eligible for priority review if it is intended to treat a serious condition and it offers a significant improvement in safety or effectiveness compared to marketed products.

The FDA will move more quickly in its review of such products in an effort to complete the review four months sooner than a standard review.

Additionally, accelerated approval may be available for a product intended to treat a serious condition that provides a meaningful therapeutic benefit over existing treatments, which means the product may be approved on the basis of clinical data establishing an effect on a surrogate endpoint or on an intermediate clinical endpoint.

As a condition of accelerated approval, the FDA may require the sponsor to perform adequate and well-controlled post-marketing clinical studies.

In addition, the FDA currently requires pre-approval of promotional materials for products receiving accelerated approval, which could impact the timing of the commercial launch of the product.

Fast Track designation, priority review and accelerated approval do not change the standards for approval but may expedite the development or approval process.

The FDA may also determine that a risk evaluation and mitigation strategy (REMS) is necessary to assure the safe use of the product.

Among other things, a REMS can include restrictive conditions under which the product may be distributed, which may have a negative impact on the product’s commercial success.

If the FDA concludes that a REMS is needed, the NDA sponsor must submit a proposed REMS, and the product will not be approved until FDA determines that the proposed REMS is adequate. 

The FDA usually will inspect the facilities at which the product candidate is manufactured, and will not approve the product candidate unless the agency determines that the manufacturing processes and facilities are in compliance with cGMP requirements and adequate to assure consistent production of the product within required specifications.

Additionally, before approving an NDA, the FDA will typically inspect one or more clinical trial sites to assure compliance with IND study requirements and GCP.

The NDA review process also includes evaluation of the proposed labeling, which is often the subject of significant back-and-forth between the sponsor and the agency.

The NDA review and approval process is lengthy and difficult, and may involve FDA requests for additional data or information, which may extend the process and/or lead the agency to refuse to approve the application.

This is the case even if requested data or information are submitted, because data are not always conclusive and the FDA may interpret data differently than the sponsor does.

If it decides not to approve an NDA, the FDA will issue a complete response letter, which usually describes the specific deficiencies in the NDA and may include recommended actions the applicant might take for the FDA to reconsider the application.

The deficiencies may be minor, for example, requiring labeling changes, or more significant, such as requiring additional clinical trials.

An applicant receiving a complete response letter may either revise and resubmit the NDA or withdraw the application.

FDA approval of an NDA may impose significant limitations that could weaken the commercial value of the product.

This could take the form of a narrow indication or dosage, requiring the labeling to contain contraindications, warnings or precautions to address perceived safety issues, or mandating a REMS that significantly restricts or imposes burdens on how the product is distributed.

Additionally, the FDA may require Phase 4 testing as a condition of approval.

In particular, the FDA requires Phase 4 testing as a condition of accelerated approval, and may withdraw accelerated approval of a product if a sponsor fails to timely conduct such studies or if those studies fail to confirm safety or effectiveness.

Such post-approval requirements can materially impact a product’s commercial prospects. Post-approval modifications to a drug product, such as changes in indications, labeling or manufacturing processes or facilities, may require development and submission of additional information or data in a new or supplemental NDA, which would also require prior FDA approval.

Regulatory Exclusivities.

The Orphan Drug Act provides incentives for the development of drugs intended to treat rare diseases or conditions, which generally are diseases or conditions affecting less than 200,000 individuals in the US.

If a sponsor demonstrates that a drug is intended to treat a rare disease or condition, the FDA grants orphan drug designation (ODD) for the product for that use.

The benefits of ODD include research and development tax credits and exemption from user fees, including the significant application fee otherwise required with submission of an NDA.

A drug that is approved for an indication that is within the product’s orphan drug designation is granted seven years of orphan drug exclusivity (ODE).

During that period, the FDA generally may not approve any other application for product with the same active moiety for the same use, although there are exceptions, most notably when the later product is shown to be clinically superior to the product with orphan drug exclusivity.

A court decision in 2021 broadened the scope of ODE, but the impact of that decision is yet to be determined.

ODD and ODE are also available from the European Union (EU).

If the orphan-designated product continues to meet the criteria for orphan designation at approval, the approval for an orphan-designated indication conveys a 10-year exclusivity period, during which the competent authorities in the EU may not accept another marketing authorization application and may not grant another marketing authorization for a similar medicinal product (i.e., a medicinal product with an identical active substance, or an active substance with the same principal molecular structural features and that acts via the same mechanisms) for the same therapeutic indication.

The 10-year period can be reduced to six years if, at the end of the fifth year, it is established that the product no longer meets the criteria for the ODD, which can include if the product is sufficiently profitable not to justify market exclusivity.

Products that are approved to treat rare diseases that are serious or life-threatening and where the serious or life-threatening manifestations primarily affect patients under the age of 19 years of age may qualify for the Rare Pediatric Disease Priority Review Voucher (RPDPRV) program, in which the product sponsor receives upon approval a voucher for priority review of another product.

The voucher can be used by the sponsor for a subsequent application that would not in its own right qualify for priority review, or it may be sold to another company for that use.

In either case, a RPDPRV may have significant value.

Under the current statutory sunset provisions for the RPDPRV program, after September 30, 2024, FDA may award a voucher for an approved rare pediatric disease product application only if the sponsor has rare pediatric disease designation for the drug, and that designation was granted by September 30, 2024.

After September 30, 2026, FDA may not award any rare pediatric disease priority review vouchers.

We received ODD for Annamycin for the treatment of AML in 2018, and in 2020 for the treatment of soft tissue sarcomas, and Fast Track Designation for Annamycin for the treatment of relapsed or refractory AML in April 2019.

We received ODD for WP1066 for the treatment of glioblastoma in 2019.

If WP1066 is timely approved for the treatment of any of the following pediatric diseases, we may qualify for a Rare Pediatric Disease Priority Review Voucher:

ependymoma, medulloblastoma, diffuse intrinsic pontine glioma, or atypical teratoid rhabdoid tumor, provided that related statutory sunset provisions are extended.

The federal Food, Drug and Cosmetic Act (FDCA) also provides for a grant of five-year exclusivity with approval of a product containing a new chemical entity (NCE), which generally means that the active moiety has never before been approved in any drug.

During this exclusivity period, which runs from the date of the product’s approval, FDA may not accept for filing any Abbreviated New Drug Application (ANDA) for a generic version of the product or any 505(b)(2) NDA (generally an NDA that relies on data that are not the sponsor’s and for which the sponsor has not obtained a right of reference) for a product with the same active moiety.

There are circumstances under which the follow-on application can be submitted at four years, and there are provisions that operate to preclude approval of the application for an additional period of time.

Also, NCE exclusivity does not block approval of a “full”

NDA (generally, an NDA in which the data are the sponsor’s or for which the sponsor has obtained a right of reference).

The NCE exclusivity scheme is complicated and evolving;

for that reason, although we believe that some of our products will qualify for five-year NCE exclusivity, we cannot be certain that will receive such exclusivity, or that if we do, the exclusivity will effectively protect our market position.

Post-Approval Requirements

Any pharmaceutical products for which the Company receives FDA approvals are subject to continuing regulation by the FDA, including, among other things, cGMP compliance, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements, which include standards for direct-to-consumer advertising, prohibitions on promoting pharmaceutical products for uses or in patient populations that are not described in the pharmaceutical product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities and promotional activities involving the internet.

Failure to comply with FDA requirements can have negative consequences, including adverse publicity, enforcement letters from the FDA, actions by the US Department of Justice and/or US Department of Health and Human Services’

Office of Inspector General, mandated corrective advertising or communications with doctors, and civil or criminal penalties.

Although physicians may prescribe legally available pharmaceutical products for off-label uses, manufacturers may not directly or indirectly market or promote such off-label uses.

We rely and expect to continue to rely on third parties for the production of clinical and commercial quantities of our products.

Manufacturers of our products are required to comply with applicable FDA manufacturing requirements contained in the FDA’s cGMP regulations.

cGMP regulations require, among other things, quality control and quality assurance, as well as the corresponding maintenance of records and documentation.

Pharmaceutical product manufacturers and other entities involved in the manufacture and distribution of approved pharmaceutical products are required to register their establishments with the FDA and certain state agencies and are subject to periodic unannounced inspections by the FDA and certain state agencies for compliance with cGMP and other laws.

Once approved, products are subject to continuing regulation by the FDA, including, among other things, cGMP compliance, record-keeping requirements, reporting of adverse experiences with the product, providing the FDA with updated safety and efficacy information, product sampling and distribution requirements, complying with certain electronic records and signature requirements and complying with FDA promotion and advertising requirements, which include standards for direct-to-consumer advertising, prohibitions on promoting pharmaceutical products for uses or in patient populations that are not described in the pharmaceutical product’s approved labeling (known as “off-label use”), industry-sponsored scientific and educational activities and promotional activities involving the internet.

Although physicians may prescribe legally available pharmaceutical products for off-label uses, manufacturers may not directly or indirectly market or promote such off-label uses. If ongoing regulatory requirements are not met, or if safety or manufacturing problems occur after the product reaches the market, the FDA may at any time withdraw product approval or take actions that would limit or suspend marketing.

Additionally, the FDA may require post-marketing studies or clinical trials, changes to a product’s approved labeling, including the addition of new warnings and contraindications, or the implementation of other risk management measures, including distribution-related restrictions, if there are new safety information developments.

Further, failure to comply with FDA requirements can have negative consequences including adverse publicity, enforcement letters from the FDA, actions by the US Department of Justice and/or US Department of Health and Human Services Office of Inspector General, mandated corrective advertising or communications with doctors, and civil or criminal penalties.

We rely and expect to continue to rely on third parties for the production of clinical and commercial quantities of our product candidates.

Manufacturers of our product candidates are required to comply with applicable FDA manufacturing requirements contained in the agency’s cGMP regulations and related policies.

The cGMP regulations require, among other things, adhering to requirements relating to organization and training of personnel, buildings and facilities, equipment, control of components and drug product containers and closures, production and process controls, packaging and labeling controls, holding and distribution, laboratory controls, quality control and quality assurance, as well as the corresponding maintenance of records and documentation.

Pharmaceutical product manufacturers and other entities involved in the manufacture and distribution of pharmaceutical products are required to register their establishments with the FDA and certain state agencies and the FDA inspects equipment, facilities, and processes used in manufacturing pharmaceutical products prior to approval.

The FDA and certain state agencies also conduct periodic unannounced inspections to re-inspect equipment, facilities, and processes for compliance with cGMP and other laws.

Accordingly, manufacturers must continue to expend time, money and effort in the area of production and quality control to maintain cGMP compliance.

Discovery of problems with a product after approval may result in restrictions on a product, manufacturer or holder of an approved NDA, including withdrawal of the product from the market.

Failure to comply with applicable cGMP requirements and conditions of product approval may lead the FDA to take enforcement actions or seek sanctions, including fines, issuance of warning letters, civil penalties, injunctions, suspension of manufacturing operations, operating restrictions, withdrawal of FDA approval, seizure or recall of products, and criminal prosecution.

Although we periodically monitor the FDA compliance of our third-party manufacturers, we cannot be certain that our present or future third-party manufacturers will consistently comply with cGMP and other applicable FDA regulatory requirements.

Discovery of problems with a product after approval may result in restrictions on a product, manufacturer or NDA sponsor, including withdrawal of the product from the market.

In addition, changes to the manufacturing process generally require prior FDA approval before being implemented and other types of changes to the approved product, such as adding new indications and additional labeling claims, are also subject to further FDA review and approval.

Patent Term Restoration 

Depending upon the timing, duration and specifics of the FDA approval of the use of our pharmaceutical product candidates, some of our products covered by US patents may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.

The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for patent term lost during product development and the FDA regulatory review process for a product the approval of which is the first permitted commercial marketing of the active pharmaceutical ingredient.

If we receive FDA approval of our pharmaceutical product candidates, and depending upon the timing, duration and specifics of the FDA approval of the use of our pharmaceutical product candidates, some of our product candidates covered by US patents may be eligible for limited patent term restoration under the Drug Price Competition and Patent Term Restoration Act of 1984, commonly referred to as the Hatch-Waxman Amendments.

The Hatch-Waxman Amendments permit a patent restoration term of up to five years as compensation for the patent term lost during product development and the FDA regulatory review process for a product the approval of which is the first permitted commercial marketing of the active pharmaceutical ingredient.

However, patent term restoration cannot extend the remaining term of a patent beyond a date 14 years after the product’s approval date.

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The US Patent and Trademark Office, in consultation with the FDA, reviews and renders a decision on the application for any patent term extension or restoration.

In the future, we may be able to apply for extension of patent term for one or more of our currently licensed patents or any future owned patents to add patent life beyond its current expiration date, depending upon the expected length of the clinical studies and other factors involved in the filing of the relevant NDA. We cannot be certain that any of our products will qualify for patent term restoration or, if so, for how long the patent term will be extended.

In the future, we may be able to apply for extension of patent term for one or more of our currently licensed patents or any future owned patents to add patent life beyond its current expiration date, depending upon the expected length of the clinical trials and other factors involved in the filing of the relevant NDA. We cannot be certain that any of our product candidate’s will qualify for patent term restoration or, if so, for how long the patent term will be extended.

Pharmaceutical Coverage, Pricing and Reimbursement

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The process for determining whether a payer will provide coverage for a pharmaceutical product may be separate from the process for setting the price or reimbursement rate that the payer will pay for the pharmaceutical product.

Third-party payers may limit coverage to specific pharmaceutical products on an approved list, or formulary, which might not, and frequently do not, include all of the FDA-approved pharmaceutical products for a particular indication.

Third-party payers may limit coverage to specific pharmaceutical products on an approved list, or formulary, which might not, and frequently do not, include all the FDA-approved pharmaceutical products for a particular indication.

Third-party payers are increasingly challenging the price and examining the medical necessity and cost-effectiveness of medical products and services, in addition to their safety and efficacy.

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Some jurisdictions operate positive and negative list systems under which products may only be marketed once a reimbursement price has been agreed upon.

To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical studies that compare the cost-effectiveness of a particular pharmaceutical product candidate to currently available therapies.

To obtain reimbursement or pricing approval, some of these countries may require the completion of clinical trials that compare the cost-effectiveness of a particular pharmaceutical product candidate to currently available therapies.

Other member states allow companies to fix their own prices for medicines but monitor and control company profits.

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International Regulation

In addition to regulations in the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our future drugs.

In addition to regulations in the United States, we are subject to a variety of foreign regulations governing clinical trials and commercial sales and distribution of our future drugs.

Whether or not we obtain FDA approval for a drug, we must obtain approval of a drug by the comparable regulatory authorities of foreign countries before we can commence clinical trials or marketing of the drug in those countries.

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In addition to regulations in Europe and the United States, we will be subject to a variety of foreign regulations governing clinical trials and commercial distribution of our future drugs.

As of December 31, 2020 we had ten full-time employees and five part-time employees, and accordingly, a high percentage of the work performed for our development projects is outsourced to qualified independent contractors. 

Legal Proceedings

We are not subject to any litigation.

As of December 31, 2021 our workforce consisted of twenty-one full and part-time employees and contractors devoting more than 20 hours per week, in the US and Europe. We leverage our work force with other service providers and contractors worldwide, working in a primarily virtual environment, even prior to the COVID-19 pandemic.

Our workforce contained thirteen full-time employees and four part-time employees.

Access to Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business