Moleculin Biotech - Earnings Call - Q1 2025

Executive Summary

• Q1 2025 was operationally on track: first patient dosed in the pivotal, adaptive Phase 3 MIRACLE trial for Annamycin (naxtarubicin) in R/R AML; EMA approved the CTA across nine EU countries, expanding recruitment capacity; interim readout (n=45) remains targeted for 2H 2025.
• Financially, Moleculin reported no revenue and a net loss of $6.44M (–$0.69 EPS); cash was $7.72M, funding operations into Q3 2025.
• Wall Street consensus for Q1 2025 EPS was –$0.56*, so the reported –$0.69 was a miss of $0.13; revenue consensus was $0.00*, matching actual $0.
• Management reiterated the primary CR endpoint at ~day 35 and explained EMA’s GLP preclinical condition for Part B, while CFO highlighted an expected ~$15M raise to extend runway into Q1 2026 and beyond the initial interim readout.
• Potential near-term catalysts include H2 2025 unblinding (n=45) in MIRACLE and final MB‑107 STS lung mets data (targeted by end of June), plus ongoing WP1066 progress (GBM trial recruitment, IV formulation work at Emory).

What Went Well and What Went Wrong

What Went Well

• “We are pleased with the continued progress of our pivotal, adaptive Phase 3 MIRACLE trial… EMA approval… positions us to continue building momentum and remain on track with our expected enrollment and data milestones.” — CEO Walter Klemp.
• MIRACLE trial site selection and approvals are broadening: 38 sites selected globally, with EU CTA approval in nine countries; patient dosing began; first data unblinding planned H2 2025.
• Pipeline breadth: WP1066 GBM investigator-sponsored trial recruiting (7 patients), and MB‑107 STS lung mets final data targeted by end of June; WHO approved “naxtarubicin” as Annamycin’s INN, advancing branding/readiness.

What Went Wrong

• EPS missed consensus by $0.13 (–$0.69 vs –$0.56*), with volatility driven by warrant-related fair value changes, issuance losses, and transaction costs within other income lines (gain of $9.05M, offset by –$7.80M issuance loss and –$1.79M transaction costs).
• Limited cash runway: $7.72M at 3/31/25, sufficient into Q3 2025; management anticipates raising ~$15M to fund into Q1 2026 and beyond interim MIRACLE readouts.
• EMA condition requires appropriate nonclinical GLP studies before initiating Part B in EU, adding execution steps that could affect timing if studies take longer than expected (management does not expect timeline impact).

Transcript

Operator (participant)

Morning. Welcome to the Moleculin Biotech First Quarter 2025 Update Conference Call webcast. The question and answer session will follow a formal presentation. As a reminder, this conference is being recorded. It is now my pleasure to turn the call over to your host, Jenene Thomas, Investor Relations. Please go ahead, Jenene.

Jenene Thomas (Head of Investor Relations)

Thank you, Robin. Good morning, everyone. At this time, I would like to remind our listeners that remarks made during this webcast may state management's intentions, beliefs, expectations, or future projections. These are forward-looking statements and involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the safeguard provisions of the federal securities laws and are based on Moleculin's current expectations, and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from those contemplated by such forward-looking statements are discussed in the periodic reports Moleculin files with the Securities and Exchange Commission. These documents are available in the investor section of the company's website and on the Securities and Exchange Commission's website. We encourage you to review these documents carefully.

Additionally, certain information contained in this webcast relates to or is based on studies, publications, surveys, and other data obtained from third-party sources and the company's own estimates and research. While the company believes these third-party sources to be reliable as of the date of this presentation, it does not independently verify and makes no representation as to the adequacy, fairness, accuracy, or completeness of any independent source of verified information obtained from a third-party source. Any data just regarding clinical trials and progress are considered preliminary and subject to change. Join us on today's call from Moleculin's leadership team, our Walter Klemp, Chairman and Chief Executive Officer, Dr. John Paul Waymack, Senior Chief Medical Officer, and Jonathan Foster, Executive Vice President and Chief Financial Officer. I'd now like to turn the call over to Walter Klemp. Wally, please proceed.

Walter Klemp (Chairman and CEO)

Thanks, Jenene. Hello, and welcome to our first quarter earnings conference call. For most of our investors, the focus is on the phase III MIRACLE trial studying Annamycin for the treatment of relapsed and refractory acute myeloid leukemia. And with good reason. This trial has now officially started with the first patient already treated and more on the way. In total, we now have 38 sites selected worldwide between the U.S., Europe, Middle East, and North Africa. We just announced this week that we also received complete sign-off from the European Medicines Agency for all nine countries that we wanted to open in the EU. That was one of the longest lead time items for getting the EU up and running. So it was a major milestone and a real show of support from the EMA for our trial design and our objectives.

Also, the World Health Organization has officially recognized a new generic drug name for Annamycin, which may now be referred to in literature as naxtarubicin. This was an important first step in actually launching Annamycin once it receives new drug approval. Compared with some of the unpronounceable crazy drug names out there, we're really pleased with naxtarubicin, especially since it sounds a lot like the next rubicin, which really plays into the next generation positioning of Annamycin. You should expect to see us using both names together until such time as we establish an FDA-approved brand name, which is the next step in positioning the drug for launch. We also announced some additional patent protection for Annamycin. Even though we already had composition of matter protection extending into at least 2040, these additional patents just continue to build a wider fence of protection around our core asset.

We should also be announcing a date for the presentation of the final data from our MD-107 clinical trial using Annamycin to treat advanced soft tissue sarcoma. Although the preliminary numbers were impressive, we think the final data are really going to turn some heads. Please look for an announcement on this in the coming weeks. Now, this graphic gives you a better perspective on the status of our site selection and approval process for the MIRACLE trial. Compared with the version from our last earnings call, we now have the great majority of countries and sites approved from a regulatory standpoint. Now we're just wrapping up hospital contracts and local ethics approvals. Just to be clear, though, the most important milestone for us coming up will be the unblinding of the first 45 patients.

A lot of eyes will be on us for this data point, as it should tell the world definitively that we are likely headed for new drug approval. With that said, what you see here is what gives us so much confidence that we expect to have those first 45 patients treated before the end of this year. To drive this home, just averaging one patient per site for the remainder of the year gets us there. Given the enthusiasm that we've seen from these sites, we think we're going to outpace that rate. Now, look, we know a lot of investors think that Annamycin is the entire ballgame for us. To be sure, it's where most of the attention should be focused because it's so close to NDA submission.

We do have two other very exciting technologies, and one of them is WP1066, our lead STAT3 inhibitor. Do not forget that WP1066 has already shown activity in the treatment of brain tumors, and that was with a very inefficient form of drug delivery. Now WP1066 is in another investigator-sponsored clinical trial, this time in combination with radiation at Northwestern University. Since we announced this trial in September of last year, we have already recruited seven patients. That is nearly a patient per month for just one site. This is moving quickly. This is still with the existing oral delivery, which we know is not optimal. We are collaborating with Emory University on the development of an IV delivery for 1066, which we think could significantly improve its activity. We will keep you updated as more developments occur here. That gives you a high-level overview of recent events.

Now let me hand things over to Dr. Paul Waymack, our Senior Chief Medical Officer, to give you a few more insights into our clinical activity. Paul?

John Paul Waymack (Senior Chief Medical Officer)

Thanks, Wally. Before I speak about the MIRACLE trial, let's catch up on our MB-106 phase II trial, which had essentially the same inclusion and exclusion criteria, plus the same treatment regimen for patients as MIRACLE, except we treated some first-line plus some third-line and beyond subjects in MB-106. Our first patient who did not receive a bone marrow transplant but did achieve a complete remission finally relapsed after over 600 days. While we are disappointed for this subject, it must be said that achieving an almost two-year complete remission for a 78-year-old following 17 cycles of a venetoclax regimen, it's remarkable given the recent literature, which documents the dismal median overall survival for venetoclax regimen failures, which have a median overall survival of less than three months regardless of further treatments. Our durability for MB-106 is still developing as the final three subjects are maintaining their complete remission.

You can see on this chart that receiving a bone marrow transplant definitely correlates with better durability. If these three keep moving to the right, the median durability for the trial should eventually be even with sub-2's durability. That is roughly 400 days. Now, moving on to the MIRACLE trial. We'll only treat initial refractory relapsed AML subjects. That is, this is a second-line therapy study where Annamycin in combination with cytarabine will be delivered on a five-plus-three-day basis compared to just cytarabine plus placebo. As Wally mentioned, recruitment and treatment of subjects is already underway in Ukraine, and we expect the initial readout of safety and efficacy data on the first 45 subjects around the end of 2025.

On May 12th, we announced that the European Medicines Agency, the EMA, they approved our clinical trial application to conduct our MIRACLE trial in all nine countries we submitted to in the EU. We received final reports of acceptable for Belgium, Austria, France, Germany, Italy, Lithuania, Poland, Romania, and Spain. These approvals were under the condition that we submit results of appropriate non-clinical GLP studies before initiating the phase III portion. That is part B of the MIRACLE study. Combined with individual country committees and ethics approval for these nine countries in the EU, it allows us to proceed in rolling subjects in these countries. Also, in November 2024, we amended our existing U.S. IND by submitting the MIRACLE trial protocol, which allows for dosing of U.S. AML patients above the lifetime maximum allowable dose for currently prescribed anthracyclines. Since then, we received FDA feedback and guidance on that amendment.

This feedback allowed a reduction in the number of subjects to be enrolled in part B of the phase III pivotal protocol to 222 patients. Obviously, any reduction in recruitment numbers helps to shorten the time to completion of the trial. FDA made a number of other requests related to our protocol. These requested changes focused mainly on safety and subject monitoring, clinical pharmacology, and inclusion/exclusion criteria. None of the requests resulted in significant alterations in the overall trial design or the dosing of Annamycin. Our last response to FDA was submitted on April 18th, 2025, and we have not yet received follow-up communication since that time. We are therefore now proceeding with this amended MIRACLE trial protocol in the U.S.

As is typical with large pivotal phase III global clinical trials at their onset, there are minor differences between the U.S. and EU protocols due to FDA and EMA requests. However, we do not view these as a barrier to successfully completing the study, and we are now working to harmonize the protocols into a single global version. Regarding our newly initiated phase III study, it was designed after an end of phase I/II meeting with FDA. It is to be a randomized study comparing the dosing regimen with which we had great success in our MB-106 study, that is Annamycin plus high-dose cytarabine, with a control arm of placebo plus high-dose cytarabine.

We chose this design because FDA encouraged it and because two recent large randomized clinical trials in refractory and relapsed AML patients, that is, the MIRROS and CLASSIC I clinical trials, used it and both achieved approximately a 17.5% complete remission rate among patients randomized to receive high-dose cytarabine plus placebo. To that end, we can expect we will need for our Annamycin plus high-dose cytarabine treatment arm to be a 17.5% complete response rate to a statistically significant degree for our drug to be approved by FDA for marketing. As a reminder, in our MB-106 study, this combination of Annamycin plus high-dose cytarabine achieved a 50% complete remission rate. The primary efficacy endpoint for this study will be the rate of complete remission of leukemia at approximately day 35.

During part A of our study, we will have two different Annamycin treatment arms, a 190 mg per meter square treatment arm and a 230 mg per meter square treatment arm. There will be an unblinding of the data in part A after the first 45 patients have completed their efficacy analyses and a second unblinding after between 75 and 90 patients have completed their efficacy analyses. These interim looks at the data are in part to determine which of the two Annamycin dosing regimens will be taken to completion of the study. In part B of the study, we will continue enrolling patients, but we will then randomize in a one-to-one ratio the placebo plus Annamycin plus cytarabine treatment arm against whichever of the two dosing regimens of Annamycin was found to be superior plus the cytarabine treatment arm.

Finally, as Wally mentioned, we intend to release the final data readout on MD-107 where we treated advanced soft tissue sarcomas which had metastasized to the lung with Annamycin as monotherapy. Most subjects were treated well above the lifetime maximum anthracycline dose, and yet after reviewing all the cardiac safety data, our expert noted that he saw no signs of study-related drug-induced cardiotoxicity. We are excited about the results of these trials, obviously. Now, I'll turn it over to Jon Foster, our Executive Vice President and CFO. Jon?

Jonathan Foster (EVP and CFO)

Thanks, Paul. We ended the quarter with about $8 million of cash on hand. This should run our operations into the third quarter of this year. To get us well into the first quarter of 2026, we will need to raise approximately $15 million. Now, we expect this amount will get us beyond the initial 45 subject data readout, supporting our efficacy rates with an additional 30 subjects receiving Annamycin or naxtarubicin. Also, by then, we should have a total of 75-90 subjects recruited, moving us closer to the second data readout in the first half of 2026. Our market cap is up to over $14 million with 14.1 million shares outstanding. Our trading volume is healthy with a three-month trading volume of almost 6 million shares per day. It is spiky.

We had a healthy volume of about 2.4 million shares traded this past Monday with the EU news that Wally and Paul just mentioned. Now, we've been busy by looking at this chart. We've delivered on contracting sites, site selections, presenting presentations, medical posters on MB-106, and also on our sponsored research at MD Anderson. Most importantly, it's what we announced Monday, the approval of the EU member countries. Obtaining all of these approvals with just 17 employees supported by a great team of consultants on the timeline which we expected and we told the public is something of which we're very, very proud. This sets the stage for announcing outside of the EU and the U.S. additional country regulatory approvals, along with first-by-country hospital site initiation visits, which sets them up to be open to recruitment.

We'll update you on recruitment on our path to get to the initial 45 subjects, 15 of the control arm, and 30 with the two different doses of Annamycin. Now, this safety and efficacy readout, in addition to the one MB-106 data, should provide the market enough data to support a substantial increase in our market cap. Wally?

Walter Klemp (Chairman and CEO)

Thanks, Jon. From a big-picture perspective, we are all intensely focused on pushing Moleculin's market cap into the range that it truly deserves. We think the building blocks for that market cap breakout are well placed. Annamycin is a truly disruptive technology in a space where exit valuations are often measured in the billions. The fact is we are positioned to possibly become the first-ever non-cardiotoxic anthracycline. Do not forget, anthracyclines are used to treat not just AML, but nearly half of all cancers and 60% of all childhood cancers. Moleculin does not just avoid cross-resistance with other anthracycline chemotherapies like venetoclax. It actually outperforms current anthracyclines in most preclinical tumor models. It is not just that we believe we have a better drug here. It is far more clinically advanced than we think the market is giving us credit for.

Our phase II efficacy data is better than any drug ever approved for second-line AML therapy. We should have phase III data to share publicly by the second half of this year. All of this is supported by a diverse pipeline of follow-on technologies and is managed by a truly veteran drug development team with multiple FDA approvals and big pharma exits to our names. The key milestones are coming quickly this year. Stay tuned for a wild ride at Moleculin. Operator, we're now ready to open up for Q&A.

Operator (participant)

Thank you. We'll now be conducting a question-and-answer session. If you'd like to ask a question at this time, you may press star one from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to withdraw your question from the queue. For participants that are using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we pull for questions. Thank you. Thank you. The first question is from the line of Jonathan Aschoff with Roth Capital. Please proceed with your questions.

Jonathan Aschoff (Managing Director and Senior Research Analyst)

Thanks. Good morning and congrats on getting MIRACLE enrolling. I was curious, the statement about the results will be submitted as a substantial modification to the EMA, does that have any negative implications for the timeline of EU approval versus U.S.?

Walter Klemp (Chairman and CEO)

We do not think so. The issue here is EMA requested some additional GLP preclinical data that we know we can produce. It is just a matter of timing and budgeting. The issue here will be how quickly we can complete that GLP testing before the EU countries are allowed to move on to part B. That said, Jonathan, the timelines that we have built, we would continue to be recruiting in the U.S. sites and on EU sites even in that interim period, in theory. The trial really does not have to slow down, and we believe we will get to the requisite number of EU patients to satisfy EU approval requirements.

The answer is, in theory, it shouldn't change the timeline for approval for EMA, but we have to acknowledge that depending on the time it takes to get those GLP studies done, that it could, but that's not our expectation.

Jonathan Aschoff (Managing Director and Senior Research Analyst)

Okay. How close is Emory, you think, to getting an optimal formulation in the bag by the end of this year, or is it something that could drag out a little?

Walter Klemp (Chairman and CEO)

The thing, every time you ask a scientist to give you a timeline for discovering something new, they'll give you a lecture on what it takes to discover something new, right? We think we're beyond the having to discover something new stage, and where we are now is actually implementing a strategy for a new formulation that satisfies the needs for IV delivery. We feel like we're now in blocking and tackling and just getting the preclinical work done so that we can move this into clinic. I feel like your sort of estimate there for by the end of the year is a decent target, but I do have to acknowledge things can always, you can always get speed bumps when you're developing a new formulation.

We don't want to overpromise there, but I think you should expect to hear something from us before the end of the year.

Jonathan Aschoff (Managing Director and Senior Research Analyst)

Okay. That's very fair. One for Jon, please. Is that $3.5 million sort of a fair run rate for R&D for the rest of the year's quarters, or is that, I mean, that should go up, shouldn't it?

Jonathan Foster (EVP and CFO)

It'll go up, especially as we head into 2026 when we bring on the GLP and some manufacturing expenses. Right now, we have enough drug for part A. We'll have to start manufacturing drug for part B.

Jonathan Aschoff (Managing Director and Senior Research Analyst)

Great. Thank you very much, guys.

Walter Klemp (Chairman and CEO)

Thank you.

Operator (participant)

The next question is from the line of Jason McCarthy with Maxim Group. Please proceed with your questions.

Jason McCarthy (Senior Managing Director and Head of Biotechnology Research)

Hey, guys. Thank you for taking the questions. Good morning.

Walter Klemp (Chairman and CEO)

Morning.

Jason McCarthy (Senior Managing Director and Head of Biotechnology Research)

You mentioned the primary is the 35-day CR8. Call it one month, just for simplicity. Do you need any durability data for potential approval, or is one month enough? What are really the expectations for cytarabine alone? If CRs are achieved with cytarabine, how long do they typically last? I'm trying to get a sense of what the bar is going to be here when you get to that unblinded interim data and say, "This looks like this should carry through all the way to the end for an approvable drug.

Walter Klemp (Chairman and CEO)

I'm going to ask Paul to sort of give you a more thorough answer, Jason. The good news, just to be really clear, the good news is durability is not a primary endpoint for approval here. It's a secondary objective. Our approval doesn't depend on that. It's still an interesting topic, and I think it's important to talk about. Paul, do you want to maybe give a more thorough response to Jason here?

John Paul Waymack (Senior Chief Medical Officer)

That's a good question. As Wally said, FDA said that's our primary endpoint. And these studies I quoted that had the 17%-18% CR rate with high-dose cytarabine, these were not small studies. These were studies where the control arm of cytarabine plus placebo had hundreds of patients. So we're therefore quite confident that in our trial, the CR rate with cytarabine is going to be in the teens. As far as durability, it'll last for a few months, but that's a secondary endpoint. Of course, the ultimate arbitrator is FDA. But at our end of phase I-II meeting, they said that's our endpoint, and they understand that we are not powered to show statistical significance for we're not reasonably powered to show statistical significance for these other ones. There should be a strong trend. This is because that's what the FDA asked for.

When you look at the recent approvals for AML drugs, CR rate was the primary endpoint. The secondaries were overall survival durability. Those were trends. They never reached statistical significance for these drugs. We think we're in good shape there. Certainly, if we are anywhere near the 50% CR rate, we're in great shape.

Walter Klemp (Chairman and CEO)

There's a nuance here too, Jason, that I think is important to kind of feed in. That is the prior studies that Paul mentioned, two specifically, the MIRACLE trial and the Classic I trial. Both of those studies allowed multiple cycles of cytarabine before measuring for CR. That's a difference between their trial designs and ours. In our trial, you only get one cycle. You only get that roughly 35 days, and that's when we measure. If the patient can't get a CR off of a single cycle of cytarabine plus placebo, then that counts as not a CR. Partly why Paul said we expect it to be in the teens, what he did not say was our instincts say it's probably going to be lower than that 17.5% because those patients were allowed more than one cycle of cytarabine.

In ours, they won't get more than one cycle. Logic says we should expect that number to be lower. Now, we're not statistically planning on that, but it's what we expect.

Jason McCarthy (Senior Managing Director and Head of Biotechnology Research)

I'd imagine that some of your results, could they be impacted by underlying factors like age and mutational genomic alterations? Are those things that will be considered when you announce the data?

Walter Klemp (Chairman and CEO)

For sure, we'll stratify by age and by genetic mutations, but our primary endpoint isn't dependent upon it. Interestingly, when you look at the phase II data that we've talked about, that Paul's talked about, we're pretty agnostic to what genetic mutations are and to what prior therapies were. Our view is we're glad for all comers. It's just an anecdotal story. When Paul and I presented this protocol to a number of practitioners, a common theme from the practitioner was, "We assume you're going to exclude venetoclax failures because they're so difficult to treat." Our answer is, "No, absolutely not. Bring them on." We are not excluding venetolax failures. In fact, we're hoping for them because the results are so dismal for those patients.

Our phase II data says we deliver essentially the same CR rate for venetoclax failures as we do for anybody else. We are not sensitive to those differentiations in terms of, because obviously, fitness for intensive chemotherapy is largely determined by age. There is also the assumption that we are adverse to elderly patients, and that's just not the case. Our median age in the phase II data set was in the 60s. We are happy to have elderly patients, and we are happy to have mutational abnormalities and venetoclax failures.

Jason McCarthy (Senior Managing Director and Head of Biotechnology Research)

Thank you, Wally.

Walter Klemp (Chairman and CEO)

Thank you.

Operator (participant)

Thank you. This will conclude today's question-and-answer session, and we'll also conclude today's call. Thank you for your participation. You may now disconnect your lines at this time. Have a wonderful day.