Moleculin(US:MBRX)2024-03-22 20:05Part I Business Moleculin Biotech, Inc. is a clinical-stage pharmaceutical company focused on developing treatments for hard-to-treat cancers and viruses, leveraging three core technologies licensed from MD Anderson Cancer Center - Moleculin is a clinical-stage pharmaceutical company with a pipeline focused on hard-to-treat cancers and viruses, featuring three core technologies licensed from MD Anderson Cancer Center22 - The company's primary strategic focus is the development of its lead molecule, Annamycin, for the treatment of Acute Myeloid Leukemia (AML) and Soft Tissue Sarcoma (STS) lung metastases222330 Overview of Core Technologies | Technology Portfolio | Lead Candidates | Mechanism of Action | Key Features | | :--- | :--- | :--- | :--- | | Annamycin | Annamycin (L-Annamycin) | Next-generation anthracycline | Designed to be non-cardiotoxic and avoid multidrug resistance | | WP1066 Portfolio | WP1066, WP1220 | Immune/Transcription Modulators | Inhibit p-STAT3 and other oncogenic transcription factors, stimulating an immune response | | WP1122 Portfolio | WP1122 | Glycolysis Inhibitors | Designed to cut off the fuel supply for tumors and viruses by inhibiting glycolysis | Our Clinical Trials The company has thirteen clinical trials completed, in progress, or approved, with a main focus on three ongoing Phase 1B/2 trials for Annamycin, showing key human activity across its portfolio Summary of Key Clinical Trials and Human Activity | Drug Candidate | Trial / Indication | Phase | Key Efficacy Result | | :--- | :--- | :--- | :--- | | Annamycin | MB-106 / 2nd Line AML | 1B/2 | 60% CRc rate (50% CR, 10% CRi) in 2nd line subjects (n=10) | | Annamycin | MB-107 / STS Lung Mets | 1B/2 | Phase 2: 64% of subjects (9 of 14) showed Stable Disease (SD) through 2+ cycles | | WP1066 | IIT / Pediatric Brain Tumors | 1 | 1 DIPG subject had a temporary clinical and objective response | | WP1220 | MB-201 / CTCL | 1B | 60% of subjects documented a Partial Response (PR) | - Across four Annamycin trials (MB-104, MB-105, MB-106, MB-107), an independent expert reviewed data from 63 of 82 subjects and reported no signs or symptoms of cardiotoxicity44 Annamycin Program Annamycin, the company's lead drug candidate, is a next-generation anthracycline designed to overcome cardiotoxicity and multidrug resistance, holding Orphan Drug and Fast Track Designations for AML and STS - Annamycin has been granted Orphan Drug Designation (ODD) and Fast Track Designation (FTD) by the FDA for both AML and soft tissue sarcoma48 Annamycin AML Clinical Trial Efficacy (MB-106 as of March 19, 2024) | Population | N (Evaluable) | CRc Rate | CR Rate | CRi Rate | | :--- | :--- | :--- | :--- | :--- | | All Lines | 18 | 39% | 33% | 6% | | As 2nd Line Only | 10 | 60% | 50% | 10% | Annamycin STS Lung Metastases Clinical Trial (MB-107) PFS | Population | N | Median PFS (months) | | :--- | :--- | :--- | | All Subjects | 32 | 2.3 | | Phase 1B Subjects | 15 | 2.6 | | Subjects at ≤330 mg/m² & <2 Prior Therapies | 9 | 3.1 | - To date, 62 of 82 subjects have been treated above the FDA's lifetime maximum anthracycline dose limit, with one subject reaching approximately six times the limit, all with no evidence of cardiotoxicity55 WP1066 Portfolio Program The WP1066 portfolio comprises immune/transcription modulators that inhibit oncogenic pathways and boost immune response, with WP1066 showing clinical activity in DIPG and WP1220 in CTCL - The WP1066 portfolio represents a novel class of agents that inhibit multiple oncogenic transcription factors (p-STAT3, c-Myc, HIF-1α) and also boost immune response by inhibiting TRegs115116 - In a physician-sponsored trial, WP1066 demonstrated both a clinical and objective response in a subject with diffuse intrinsic pontine glioma (DIPG)49130 - A topical formulation, WP1220, showed a 60% partial response rate in a trial for cutaneous T-cell lymphoma (CTCL), with 100% of subjects showing clinical benefit49136 - The company is developing an intravenous (IV) formulation for the WP1066 portfolio to overcome the undesirable taste and potentially suboptimal bioavailability of the current oral formulation138 WP1122 Portfolio Program The WP1122 portfolio targets glycolysis inhibition, with lead candidate WP1122 completing a Phase 1a study and establishing a Recommended Phase 2 Dose, though further development is contingent on external funding - WP1122 is a prodrug of 2-DG designed to inhibit glycolysis, a critical energy source for highly dependent tumors and viruses139142 - A Phase 1a clinical trial was successfully completed, establishing a maximum tolerated dose (MTD) and Recommended Phase 2 Dose (RP2D) of 32 mg/kg daily, which can advance future antiviral and oncology studies146148 - The company has an active IND for WP1122 for the treatment of glioblastoma (GBM), but further clinical development in oncology and virology is contingent on securing external funding149150 Intellectual Property and Government Regulation The company's intellectual property is secured through exclusive licenses from MD Anderson, complemented by various beneficial FDA designations, while its operations are subject to extensive government regulation across the drug development lifecycle - The company has secured worldwide, exclusive licenses from MD Anderson for the patents and technology related to its drug candidates158 Key FDA Designations | Drug Candidate | Orphan Drug Designation (ODD) | Fast Track Designation (FTD) | Rare Pediatric Disease (RPD) Program | | :--- | :--- | :--- | :--- | | Annamycin | AML, Soft Tissue Sarcoma | AML, Soft Tissue Sarcoma | No | | WP1066 | GBM | No | Yes (DIPG, etc.) | | WP1122 | GBM | Yes - GBM | No | - The company's operations are subject to extensive regulation by the FDA and other global authorities, covering the entire product lifecycle from preclinical testing and clinical trials (GCP) to manufacturing (cGMP) and post-approval marketing209212 - The Inflation Reduction Act (IRA) directs HHS to negotiate prices for certain drugs, but drugs with an orphan drug designation as their only approved indication are excluded, which may benefit Annamycin if it maintains this status254331 Competition Moleculin operates in a highly competitive pharmaceutical market, facing competition from larger, better-resourced companies and established therapies for AML and STS lung metastases - The company faces intense competition from major pharmaceutical and biotechnology companies that possess significantly greater financial, manufacturing, and marketing resources201 - In AML, key competitors include the standard "7+3" chemotherapy regimen, Jazz Pharmaceuticals' Vyxeos, AbbVie's Venclexta, and various targeted therapies for specific genetic mutations203204205 - For STS lung metastases, the current standard of care includes anthracycline therapy and newer drugs like pazopanib, though few treatments specifically target lung metastases206 Risk Factors The company faces substantial risks inherent to a clinical-stage biotechnology firm, including uncertain clinical trial outcomes, reliance on single-source suppliers, significant regulatory hurdles, a history of financial losses, and intellectual property challenges - Regulatory & Development Risks: The company is developing drugs for terminally ill patients, and deaths in clinical trials could negatively impact the business, even if unrelated to the drug; there is no guarantee of obtaining regulatory approval, and delays in clinical trials are a significant risk261272 - Financial Risks: The company has a history of significant losses, has never been profitable, and will require substantial additional funding to continue operations; failure to obtain funding could force the company to delay or cease operations, and its stock price is highly volatile268359396 - Intellectual Property Risks: The composition of matter patent for the lead candidate, Annamycin, has expired, increasing reliance on formulation and method-of-use patents; the company's IP is licensed from MD Anderson and is subject to government rights due to federal funding264335337 - Operational Risks: The company relies on a single source for the Active Pharmaceutical Ingredient (API) for certain drug candidates; it also faces risks from conducting clinical trials abroad, potential cybersecurity threats, and intense competition from better-funded companies261274276 Unresolved Staff Comments The company reports that it has no unresolved staff comments - There are no unresolved staff comments423 Cybersecurity The company has established policies for managing cybersecurity threats, integrated into its overall risk management, with board oversight and no material incidents reported to date - The company has integrated cybersecurity risk management into its overall risk management system, conducting annual assessments and engaging third-party consultants424425 - Oversight is provided by the board of directors via the audit committee, with day-to-day management handled by the CFO and a consultant Head of IT and Cybersecurity427428 - The company reports no known cybersecurity incidents that have materially affected or are reasonably likely to materially affect its business, operations, or financial condition426 Properties The company does not own any real property, leasing its corporate headquarters and laboratory facilities in Houston, Texas, under separate agreements - The company leases its corporate office and laboratory space in Houston, Texas, and does not own any real property431432 - The corporate office lease extends to August 2029, and the lab lease extends to September 2027431432 Legal Proceedings The company states that it is not currently involved in any legal proceedings that it believes could have a material effect on its business, financial condition, or operations - As of the filing date, the company is not involved in any legal proceedings expected to have a material impact434 Mine Safety Disclosure This item is not applicable to the company - Not applicable435 Part II Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities The company's common stock trades on the NASDAQ Capital Market under "MBRX", with approximately 138 holders of record, and the company has never paid dividends nor anticipates doing so - Common stock is listed on the NASDAQ Capital Market under the symbol 'MBRX'438 - The company has never paid dividends and does not intend to in the foreseeable future440 Management's Discussion and Analysis of Financial Condition and Results of Operations For 2023, the company reported a net loss of $29.8 million, slightly higher than 2022, with cash and equivalents decreasing to $23.6 million, raising substantial doubt about its going concern ability without additional financing Results of Operations (in thousands) | | Year ended December 31, 2023 | Year ended December 31, 2022 | | :--- | :--- | :--- | | Research and development | $19,487 | $18,968 | | General and administrative | $10,017 | $11,542 | | Loss from operations | ($29,631) | ($30,640) | | (Loss) gain from change in fair value of warrant liability | ($1,044) | $1,335 | | Interest income, net | $1,368 | $240 | | Net loss | ($29,769) | ($29,025) | - R&D expenses increased by $0.5 million, mainly due to a $1.5 million charge for the WPD sublicense termination, offset by timing of clinical trial costs; G&A expenses decreased by $1.5 million due to lower regulatory, legal, and consulting fees457458 - As of December 31, 2023, the company had $23.6 million in cash and cash equivalents; management states this is sufficient to fund operations into Q4 2024, but notes these conditions raise substantial doubt about its ability to continue as a going concern462463569 - In December 2023, the company raised gross proceeds of $4.5 million through a registered direct offering and private placement of common stock, pre-funded warrants, and common warrants465 - The company is subject to an ongoing SEC investigation related to its drug candidate for COVID-19, incurring approximately $1.5 million in related legal fees in 2023, which has impacted liquidity464570 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Moleculin is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide this information502 Financial Statements and Supplementary Data This section presents the company's audited consolidated financial statements for 2023 and 2022, including the independent auditor's report with a "going concern" paragraph, balance sheets, statements of operations, cash flows, and stockholders' equity - The Report of Independent Registered Public Accounting Firm includes an explanatory paragraph expressing substantial doubt about the Company's ability to continue as a going concern due to its accumulated deficit and lack of revenue541 Consolidated Balance Sheet Data (in thousands) | | Dec 31, 2023 | Dec 31, 2022 | | :--- | :--- | :--- | | Cash and cash equivalents | $23,550 | $43,145 | | Total Assets | $38,217 | $57,422 | | Total Liabilities | $12,144 | $5,231 | | Total Stockholders' Equity | $26,073 | $52,191 | Consolidated Cash Flow Data (in thousands) | | Year Ended Dec 31, 2023 | Year Ended Dec 31, 2022 | | :--- | :--- | :--- | | Net cash used in operating activities | ($24,101) | ($27,639) | | Net cash used in investing activities | ($124) | ($67) | | Net cash provided by (used in) financing activities | $4,651 | ($23) | | Net change in cash | ($19,595) | ($27,758) | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure The company reports that there have been no disagreements with its independent registered public accountants on any accounting or financial disclosure matters during the two most recent fiscal years - No disagreements with accountants on accounting or financial disclosure matters were reported for the last two fiscal years505 Controls and Procedures Management concluded that the company's disclosure controls and procedures and internal control over financial reporting were effective as of December 31, 2023, with no material changes identified - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023507 - Management's report on internal control over financial reporting concluded that such controls were effective as of December 31, 2023508 Other Information This section discloses a forum selection clause in the company's certificate of incorporation and confirms no Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers in Q4 2023 - The company's certificate of incorporation designates the Court of Chancery of the State of Delaware as the exclusive forum for certain stockholder litigation510 - No director or officer adopted or terminated a Rule 10b5-1 trading arrangement in the fourth quarter of 2023512 Part III Directors, Executive Officers, Corporate Governance, Executive Compensation, Security Ownership, and Principal Accountant Fees Information for these items is incorporated by reference from the company's definitive proxy statement for its 2024 Annual Meeting of Stockholders, to be filed within 120 days of the fiscal year-end - Information for Items 10, 11, 12, 13, and 14 is incorporated by reference from the company's forthcoming 2024 proxy statement515517518519520 Part IV Exhibits and Financial Statement Schedules This section provides the index to the company's consolidated financial statements and a list of all exhibits filed with the Form 10-K, including corporate governance documents, material contracts, and certifications - This item provides the index to the financial statements and lists all exhibits filed with the report, including material agreements and certifications522525 Form 10-K Summary The company reports that there is no Form 10-K summary - None531