What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-08-13 compared with 2024-05-10 · 101 added, 48 removed, 138 unchanged (52% of the section changed)

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The need to obtain and retain regulatory approval of our drug candidates, both in the United States and in Europe, and in countries deemed necessary for future trials;

Our ability to complete our clinical trials in a timely fashion and within our expected budget and resources;

Our ability to complete our clinical trials in a timely fashion in line with our stated milestones and within our expected budget and resources;

Our ability to maintain compliance with the continued listing requirements of the Nasdaq Capital Market;

Our ability to source our drug products at reasonable prices;

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Furthermore, we cannot guarantee future results, events, levels of activity, performance, or achievements.

We are a clinical stage pharmaceutical company with a growing pipeline, including Phase 2 clinical programs for hard-to-treat cancers and viruses.

We are a clinical stage pharmaceutical company with a growing pipeline, including Phase 2 and 3 clinical programs for hard-to-treat cancers and viruses.

We have three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial, based substantially on discoveries made at and licensed from the University of Texas MD Anderson Cancer Center (MD Anderson) in Houston, Texas.

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One of our core management beliefs is that anthracyclines represent the most important treatment for AML and Advanced STS, and we believe Annamycin may, for the first time ever, allow a majority of these patients to benefit from this treatment.

This belief leads us to currently focus mainly on the development of Annamycin.

This belief, coupled with our limited resources, leads us to currently focus mainly on the development of Annamycin.

We intend to advance our other drug candidates via investigator led studies – both clinically and preclinically.

Our Core Technologies

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a) Annamycin or L-Annamycin is a “next generation” anthracycline (one of the most widely used classes of chemotherapy), designed to be different than currently approved anthracyclines, which are limited in utility because of cardiotoxicity risks and their susceptibility to multidrug resistance mechanisms.

Annamycin was designed to avoid multidrug resistance and to be non-cardiotoxic and has shown no cardiotoxicity in subjects treated in clinical trials to date.

Furthermore, we have demonstrated safe dosing beyond the dose limitations imposed by regulatory authorities upon currently prescribed anthracyclines due to their inherent cardiotoxicity.

As of March 2024, Annamycin demonstrated efficacy in two of its Phase 1B/2 trials in subjects with AML and Advanced STS.

Annamycin was designed to avoid multidrug resistance and to be non-cardiotoxic and has shown no cardiotoxicity in subjects treated in our clinical trials to date.

Furthermore, we have demonstrated safe dosing beyond the dose limitations imposed by regulatory authorities upon commonly prescribed anthracyclines due to their inherent cardiotoxicity.

Annamycin has demonstrated efficacy in two of its Phase 1B/2 trials in subjects with AML and Advanced STS.

We believe that Annamycin has potential to fill an unmet need as a second line therapy (2nd line or 2L) in AML and potentially as first line therapy in Advanced STS.

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These also stimulate a natural immune response to tumors by inhibiting the errant activity of Regulatory T-Cells (TRegs).

WP1066, in oral formulation, has been in two clinical trials, including compassionate use cases.

WP1066, in oral formulation, has been in two clinical trials for central nervous system (CNS) tumors, including compassionate use cases, in pediatric subjects.

WP1066 and WP1193 are being tested in preclinical programs in intravenous (IV) formulations.

WP1066 and WP1220 have been in clinical trials in a topical formulation.

WP1066 and WP1220 have both independently successfully completed Phase 1 clinical trials and have demonstrated efficacy.

WP1066 and WP1220 have both independently successfully completed Phase 1 clinical trials and have demonstrated efficacy in their varied indications.

c) Our WP1122 Portfolio contains compounds (including WP1122, WP1096, and WP1097) designed to exploit the potential uses of inhibitors of glycolysis such as 2-deoxy-D-glucose (2-DG).

We believe such compounds may provide an opportunity to cut off the energy supply of tumors by taking advantage of their high degree of dependence on glucose in comparison to healthy cells, as well as viruses that also depend upon glycolysis and glycosylation to infect and replicate.

WP1122 has completed a Phase 1 clinical study, successfully establishing a Recommended Phase 2 Dose or RP2D.

WP1122 has completed a Phase 1 clinical study in normal volunteers, successfully establishing a Recommended Phase 2 Dose or RP2D.

Recent Business Developments

Below are recent business developments.

We held a conference call on August 6, 2024, along with Dr.

Michael Andreeff, a member of our Science Advisory Board, to discuss the results of the most recent meeting with the FDA and the plans for the MIRACLE trial.

That meeting, the MIRACLE trial and the current data from the MB-106 trial are discussed further below.

On August 1, 2024, we announced the discussion in and our resulting plans from our End of Phase 1B/2 (EOP1B/2) meeting held in late June with the FDA supporting the advancement of Annamycin in combination with Cytarabine (also known as “Ara-C” and for which the combination of Annamycin and Ara-C is referred to as “AnnAraC”) to a Phase 3 pivotal trial for the treatment of AML patients who are refractory to or relapsed after induction therapy (R/R AML).

This Phase 3 “MIRACLE” trial (derived from (M)olecul(i)n (R)/(r) AML (A)nnAraC (Cl)inical (E)valuation) will be a global trial, including sites in the US.

Consistent with the FDA’s recommendations, the adaptive Phase 3 trial is expected to rely solely on CR (complete remission) at day 35 (+/- 14 days) as the primary endpoint versus placebo.

We plan to utilize a double-blind, placebo-controlled design, where the control arm is high dose cytarabine (HiDAC) plus placebo.

The MIRACLE trial will initially focus on 2 nd line treatment for R/R AML subjects and then follow-up with treatment for 3 rd line R/R AML.

Based on our discussions with the FDA, we intend to amend our current investigational new drug application or IND to allow dosing above the lifetime maximum allowable dose (LTMAD) for currently prescribed anthracyclines in this trial in the US.

The MIRACLE study, subject to appropriate future filings with and potential additional feedback from the FDA and their foreign equivalents, is expected to initially utilize an adaptive design whereby the first 75 subjects will be randomized to receive HiDAC combined with either placebo, 190 mg/m 2 of Annamycin, or 230 mg/m 2 of Annamycin.

At that point, the trial will be unblinded to select the optimum dose for Annamycin.

For the second half of the trial, approximately 120 subjects will be randomized to receive either HiDAC plus placebo or HiDAC plus the optimum dose of Annamycin.

The selection of the optimum dose will be based not only on the absence of dose limiting toxicities but also on the overall balance of safety, pharmacokinetics and efficacy, consistent with the FDA’s new Project Optimus initiative.

We believe the FDA wants to see the durability of response (DoR) and overall survival (OS) as secondary endpoints.

In addition, we believe the FDA wants to see data for subjects beyond 2 nd line and, accordingly, our plan includes a follow-on MIRACLE2 trial in 3 rd line subjects starting once the optimum dose is established in the MIRACLE trial.

We have established plans for the following milestones with regard to the MIRACLE trial:

2024 2H – Begin contracting with MIRACLE trial sites

2025 Q1 – First subject treated in MIRACLE trial

2025 Q4 – Recruitment update (n=40)

Mid 2026 – Interim data (n=75) unblinded and Optimum Dose set for MIRACLE trial

2026 – Begin enrollment of 3 rd line subjects in MIRACLE2

2027 – Enrollment ends in 2 nd line subjects

2028 – Final Data for 2 nd line subjects in MIRACLE

2028 2H – Begin submission of a new drug application (NDA) the treatment of R/R AML for accelerated approval on primary endpoint of CR from MIRACLE

Clinical Trial for the Treatment of AML in Combination with Cytarabine (MB-106)

Study MB-106 Combination Therapy – Phase 1B/2 with

Ara-C + Annamycin "5+3"

All Lines (Range 1-7)

Recruited and Evaluable

Line of Therapy

All Lines (Range 1 st -7 th )

2 nd and 3 rd Line

Subjects Evaluable To Date

Subjects Evaluable Not Dosed Per Protocol

Median Age - Years (Range)

Complete Remissions (CR)

CR with incomplete recovery (CRi)

Total Composite Complete Remission (CRc)

Complete Remission (CR) Rate

Complete Remission Composite (CRc) Rate

Partial Remission (PRs)

Overall Response Rate (CRc's + PRs) or ORR

CRc Relapsed or Death To Date

BMT to Date (in CR's)

Complete Remission (CR)

Complete Remission Composite (CRc)

Partial Response (PR)

CRc Relapsed To Date

See Note 1 below

Note 1 for Table 1:

Data from MB-106 is for Intent To Treat (ITT) subjects and is preliminary and subject to change.

Median Durability of CRc is 4.9 months and climbing.

Data from MB-106 is for Intent To Treat (ITT) subjects;

is as of August 3, 2024;

and, is preliminary and subject to change.

Median Durability of all CRc's is ~7 months and climbing.

On May 7, 2024, our management held a Key Opinion Leader conference call with Dr.

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Preliminary Safety, Efficacy and Durability Data

The preliminary data for MB-106 demonstrate a CRc rate of 45% and an ORR of 55% for all subjects, regardless of the number of prior treatments (N=20).

Segmenting the MB-106 subject population for 1 st line (N=3) and, most notably, 2 nd line (N=10) therapies in the trial, yields a CRc rate of 67% and 60% and an ORR of 67% and 70%, both respectively.

We believe the CR and CRc rates demonstrated by AnnAraC in 2 nd line patients substantially exceeds the performance reported by any drug currently approved for use in 2 nd line AML.

Median durability of remission (DoR) for the 9 CRcs is approximately 4.9 months and developing with one death (related to pneumonia) and one relapse to date out of the ten CRcs.

The first subject with a CRc (and who has yet to relapse) was treated in February 2023.

The preliminary data for MB-106 demonstrate a CR rate of 36% and a CRc rate of 41% for all subjects (N=22), regardless of the number of prior treatments, up to 6 prior treatments.

Segmenting the MB-106 subject population for 2 nd line subjects (N=10) yields a CR rate of 50% and CRc rate of 60%.

Further segmenting for 2 nd and 3 rd line subjects (N=14) yields a CR rate of 43% and a CRc rate of 50%.

We believe the results demonstrated by AnnAraC in 2 nd line subjects substantially exceeds the performance reported by any drug currently approved for use in 2 nd line AML.

Median durability of remission (DoR) for the 9 CRcs is approximately 7 months and developing with one death (related to pneumonia) and two relapses to date out of the ten CRcs.

The first subject with a CR (and who has yet to relapse) was treated in February 2023.

The DoR is being measured from the initiation of treatment to relapse or death.

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Patent number 11,951,118 titled, “ Preparation of Preliposomal Annamycin Lyophilizate ” (the ‘118 patent’) to Moleculin and The University of Texas System Board of Regents.

On April xx, 2024, we received an Issue Notification from the USPTO for an additional patent (U.S.

Patent number 11,980,634) titled “ Method of Reconstituting Liposomal Annamycin ” (the ‘634 patent’) to be issued on May 14, 2024.

Additionally on May 14, 2024, the USPTO issued an additional patent (U.S.

Patent number 11,980,634) titled “ Method of Reconstituting Liposomal Annamycin ” (the ‘634 patent’).

We have global, exclusive licenses to both patents.

The ‘118 patent provides claims to compositions that contain Annamycin, and the ‘634 patent, when issued, will provide claims to liposomal Annamycin suspension compositions, both with a base patent term extending until June 2040, subject to extension to account for time required to fulfill regulatory requirements for FDA approval.

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We continue discussions with two US academic institutions and another foreign academic institution for externally funded trials for the use of WP1066 for the treatment of glioblastomas and/or pediatric brain tumors.

Of note, we have finalized an agreement with Northwestern University (NU) and we expect NU to initiate an investigator initiated glioblastoma study in the near-term (Clinicaltrials.gov ID:

Of note, we have finalized an agreement with Northwestern University (NU) and NU has begun recruitment in an investigator initiated glioblastoma study.

NU should be treating the first subject in the near-term (Clinicaltrials.gov ID:

NCT05879250).

We do not expect the pediatric study to begin until an adult brain tumor trial commences and generates additional data.

Regarding an intravenous formula for WP1066, we believe that substantial progress has been made and we will be able to announce an IV formulation in the near term .

We do not expect a pediatric study to begin until this adult brain tumor trial commences and generates additional data.

Regarding an intravenous formula for WP1066, we believe that substantial progress has been made and that we will be able to announce a patent application process being initiated and a license to us for an IV formulation in the near term .

With the data generated from the MB-301 clinical trial setting an RP2D for WP1122 and additional sponsored research, we continue to explore avenues of external funding for further development of this portfolio.

For this study, we have submitted the final clinical study report in late October 2023.

For this study, we submitted the final clinical study report in late October 2023.

Results of Operations

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Condensed Consolidated Statements of Operations

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Operating expenses:

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Interest income, net

Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023

Three Months Ended June 30, 2024 Compared to Three Months Ended June 30, 2023

Research and Development Expense.

Research and development (R&D) expense was $4.3 million and $5.7 million for the three months ended March 31, 2024 and 2023 , respectively.

The decrease of $1.4 million is mainly related t o the clinical trials activity levels.

Research and development (R&D) expense was $4.1 million and $3.9 million for the three months ended June 30, 2024 and 2023 , respectively.

The increase of $0.2 million is mainly related t o sponsored research costs.

General and Administrative Expense.

General and administrative e xpense was $2.4 million and $2.6 million for the three months ended March 31, 2024 and 2023 , respectively.

General and administrative e xpense was $2.1 million and $2.5 million for the three months ended June 30, 2024 and 2023 , respectively.

The decrease of $0.4 million is mainly related to a decrease in regulatory and legal fees.

Gain from Change in Fair Value of Warrant Liability.

We recorded a net gain of $1.5 million in the first quarter of 2024 as compared to a net gain of $0.04 million in the first quarter of 2023, for the change in fair value on revaluation of our warrant liability associated with our warrants issued in conjunction with certain of our previous stock offerings.

We recorded a net gain of $1.7 million in the second quarter of 2024 as compared to a net gain of $0.04 million in the second quarter of 2023, for the change in fair value on revaluation of our warrant liability associated with our warrants issued in conjunction with certain of our previous stock offerings.

We are required to revalue our liability-classified warrants at the time of each warrant exercise, if applicable, and at the end of each reporting period and reflect in the statement of operations a gain or loss from the change in fair value of the warrant in the period in which the change occurred.

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Interest income, ne t decreased by approximately $0.2 million f or the comparable quarterly periods due to a decreasing cash balance during the past year.

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Research and Development Expense.

Research and development (R&D) expense was $8.3 million and $9.6 million for the six months ended June 30, 2024 and 2023 , respectively.

The decrease of $1.3 million is mainly rela ted to the WPD sublicense termination in 2023, which enabled the reacquisition of our intellectual property rights in certain territories including parts of the European Union.

The decrease was slightly offset by increased sponsored research costs in 2024 .

General and Administrative Expense.

General and administrative e xpense was $4.5 million and $5.1 million for the six months ended June 30, 2024 and 2023 , respectively.

The decrease of $0.6 million is mainly related to a decrease in regulatory and legal fees.

Gain from Change in Fair Value of Warrant Liability.

We recorded a net gain of $3.2 million in the six months ended 2024 as compared to a net gain of $0.1 million in the six months ended 2023, for the change in fair value on revaluation of our warrant liability associated with our warrants issued in conjunction with certain of our previous stock offerings.

We calculated the fair value of the warrants outstanding using the Black-Scholes model.

A gain results principally from a decline in our share price during the period and a loss results principally from an increase in our share price.

Interest income, net.

Interest income, ne t decreased by approximately $0.4 million f or the comparable quarterly periods due to a decreasing cash balance during the past year.

Liquidity and Capital Resources

The following table sets forth our primary sources and uses of cash for the period indicated (table in thousands):

Three Months Ended March 31,

Six Months Ended June 30,

Net cash used in operating activities

Net cash provided by financing activities

Net cash used in investing activities

Net cash (used in) provided by financing activities

Effect of exchange rate changes on cash and cash equivalents

Net decrease in cash and cash equivalents

As of March 31, 2024, there w as $0.4 million of cash on hand in a bank account in Australia and we know of no related limitations impacting our liquidity in Australia.

As of June 30, 2024, there w as $0.4 million of cash on hand in a bank account in Australia and we know of no related limitations impacting our liquidity in Australia.

Cash used in operating activities

Cash used in operations was $6.7 million for the three months ended March 31, 2024 .

Cash used in operations was $12.7 million for the six months ended June 30, 2024 .

This $1.6 million increase over the prior year period of $11.1 million was primarily due to the timing of costs incurred and associated payments for drug production and clinical trial expenses.

Cash provided by fin ancing activities

We did not sell any stock during the three months ended March 31, 2024 .

We believe that our existing cash and cash equivalents as of March 31, 2024 will be sufficient to fund our planned operations, which include our current Phase 1B/2 clinical programs and preparations for future clinical trials, into the fourth quarter of 2024, without the issuance of additional equity for cash.

We did not sell any stock during the six months ended June 30, 2024 .

We believe that our cash on hand and cash equivalents as of June 30, 2024, is sufficient to fund our planned operations into the fourth quarter of this year.

This takes into account cash outlays for preparations for clinical trials beyond the current active trials.

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We cannot provide assurance that such events or a combination thereof can be achieved.

An S-1 was recently filed with the SEC indicating our intentions to raise additional cash via the issuance of equity in the amount of $12 million.

We believe that our existing cash and cash equivalents as of June 30, 2024, along with the cash expected from this raise will be sufficient to fund our planned operations into the second quarter of 2025.

The amount of this raise may increase or decrease.

Additionally, there is no guarantee that the Company will be successful in this raise.

In March 2022, we received a subpoena from the SEC requesting information and documents, including materials related to certain individuals (none of which are our officers or directors) and entities, and materials related to the development of and statements regarding our drug candidate for the treatment of COVID-19.

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We cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation.

We expensed approximate ly $0.1 million and $0.5 million in related general and administrative fees and expenses for the three months ended March 31, 2024 and 2023 , respectively .

We expensed approximate

ly $0.1 million and $0.4 million in related general and administrative fees and expenses for the three months ended

June 30, 2024 and 2023

, respectively, and approximate

ly $0.1 million and $0.9 million for the six months ended

June 30, 2024 and 2023

, respectively .

Critical Accounting Policies and Significant Judgments and Estimates

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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-Q

Item 2. Management’s Discussion and Analysis