Panbela Therapeutics - Q2 2024

Executive Summary

• Phase III ASPIRE trial received a third consecutive positive DSMB safety review; interim overall survival analysis timing was pushed from mid‑2024 to Q1 2025 due to lower‑than‑anticipated event (death) rate, which management frames as a potential signal of prolonged survival.
• R&D investment accelerated with active site growth and enrollment, driving research and development expense to $7.0M (+65% YoY) and net loss to $7.1M; diluted EPS improved to $(1.47) on a much higher share base; cash fell to $0.06M at quarter‑end.
• Liquidity actions included a $0.8M non‑dilutive payment from US WorldMeds in April and a $1.5M loan in July; notes payable plus accrued interest totaled ~$4.3M, with current portion ~$1.1M.
• Near‑term stock catalysts: the Q1 2025 OS interim analysis in ASPIRE, continued rapid enrollment, and ongoing progress across additional programs (Type 1 diabetes, CRPC, NSCLC, ovarian) and listing efforts; however, very low cash and high current liabilities create financing risk.

What Went Well and What Went Wrong

What Went Well

• Third DSMB safety review recommended continuation of ASPIRE without modification; management: “This is a testament to the potential of our lead candidate, ivospemin”.
• ASPIRE enrollment surpassed 50% earlier in the year; all sites open, with full enrollment (~600 patients) reiterated for completion by Q1 2025.
• Monetization and funding: received $0.8M non‑dilutive payment tied to pediatric neuroblastoma program; later secured $1.5M loan to fund ASPIRE CRO payments.

What Went Wrong

• Interim analysis timing delayed from mid‑2024 to Q1 2025, reflecting slower‑than‑expected event accrual (positively interpreted as longer survival, but a delay nonetheless).
• Liquidity deteriorated: cash fell to $0.06M with current liabilities at $16.8M, necessitating external financing actions.
• Net loss widened YoY to $7.1M (vs. $5.8M); R&D ramp (+65% YoY) intensified burn, concentrated largely on ASPIRE.

Transcript

Operator (participant)

Welcome to the Panbela Therapeutics second quarter 2024 earnings call. At this time, all participants have been placed on a listen-only mode, and we will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, James Carbonara of Investor Relations. Sir, the floor is yours.

James Carbonara (Head of Investor Relations)

Thank you, operator. Joining me on today's call are Jennifer Simpson, Chief Executive Officer, and Sue Horvath, Chief Financial Officer. Before we begin, please note that statements made on this call that are not historical facts may be considered forward-looking statements. Risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements are detailed in the company's filings with the SEC. Any forward-looking statements made on this call speak only as of today's date, and the company does not undertake any obligation to update or revise any of these statements to reflect future events or circumstances. With that, I will turn the call over to the company's CEO, Jennifer Simpson. Dr. Simpson, please go ahead.

Jennifer Simpson (CEO)

Thank you, James, and thank you all for joining us. I will start today's call by discussing our clinical development program, our recent achievements, and upcoming milestones. Then Sue will review our financial results before we open up the call for Q&A. Beginning with our phase III ASPIRE global clinical trial. ASPIRE is evaluating ivospemin, or SBP-101, in combination with gemcitabine and nab-paclitaxel for patients with untreated metastatic pancreatic ductal adenocarcinoma. We were excited to announce in June that the independent Data Safety Monitoring Board, or DSMB, recommended study continuation without modification, marking the third consecutive positive safety review. At that time, we shared that the safety database had reached 395 patients, compared to 214 patients on November twenty-ninth, 2023. As you may recall, in January, the ASPIRE enrollment surpassed 50%, proceeding faster than initially anticipated.

With all sites open and actively enrolling, we reiterate our expectation for full enrollment of approximately 600 patients to be completed by the first quarter of 2025. With respect to interim data, the ASPIRE trial requires 33% of the total expected events, or deaths, to occur before the interim analysis can be conducted. In April, we announced that less than half of the required events or deaths for the interim analysis had occurred. Consequently, the ASPIRE trial's interim analysis, initially expected in the middle of 2024, is now projected for early 2025, due primarily to patients' prolonged survival, suggesting the potential benefit of ivospemin in treating metastatic pancreatic ductal adenocarcinoma. This encouraging development follows the FDA's approval of the FOLFIRINOX regimen, which demonstrated a relatively modest 1.9 month improvement in median overall survival compared to gemcitabine and nab-paclitaxel.

Despite this regulatory milestone, metastatic pancreatic cancer prognosis remains grim, with median survival still under 12 months, underscoring the critical need for more effective treatments. In this context, we believe that ivospemin, or SBP-101, combined with the standard of care regimen of gemcitabine and nab-paclitaxel, holds promise, with early ASPIRE trial indications suggesting the potential to outperform the incremental benefits of recently approved therapies. Given the current regulatory landscape in metastatic pancreatic cancer, we anticipate that the potential of ivospemin's efficacy may position it favorably for an FDA approval. The company remains steadfast in its commitment to this transformative study and eagerly awaits the interim results in Q1 2025, which we expect could signal a turning point in the treatment landscape for patients facing this formidable disease.

Our commitment to advancing the familial adenomatous polyposis, or FAP, program remains strong as we continue to work closely with the FDA, EMA, and the FAP community. Upon reaching a consensus on a global registration plan, we plan to progress this program while exploring strategies to optimize its value. Regarding the PACES trial, a phase III study investigating Flynpovi for the prevention of high-risk adenoma and second primary colorectal cancers, we are pleased enrollment has concluded. With the study successfully passing that planned futility analysis, we expect data readout by the second half of 2026. This study, supported by the NCI and conducted by the Southwest Oncology Group, or SWOG, has the potential to reduce the three-year event rate of adenomas and second primary colorectal cancers in patients previously treated for stages zero through three colon or rectal cancer.

Shifting focus to phase II studies, in April, we saw additional monetization from the sale of assets from the eflornithine pediatric neuroblastoma program. We received an additional $775,000 obtained in place of US sales milestones in the later years. As US WorldMeds reaches key milestones, Panbela is positioned to receive further payments. It's worth reiterating that in December, US WorldMeds secured FDA approval for its NDA for eflornithine, representing the first FDA approval of polyamine-targeted therapy in a cancer indication. This approval not only provides financial benefits to Panbela, but also serves to validate the potential role of polyamines in cancer therapy as we continue to progress our other programs. We have also entered into a clinical trial agreement for a phase II study of eflornithine in castration-resistant metastatic prostate cancer, which is actively recruiting patients.

The phase II eflornithine study in type 1 diabetes is a multicenter, double-blind, placebo-controlled trial with a 2-to-1 randomization ratio, conducted under the leadership of Indiana University School of Medicine and supported by JDRF. All six participating centers are now open and enrolling patients, with an interim analysis expected to take place next year. Furthermore, we are in the process of planning a phase II trial to assess ivospemin in platinum-resistant ovarian cancer, which we aim to initiate in collaboration with Johns Hopkins University School of Medicine during the latter half of this year. In fact, in April, at the American Association for Cancer Research, or AACR Annual Meeting, we presented a poster showcasing ivospemin's efficacy as a polyamine metabolism modulator in ovarian cancer.

The encouraging data for preclinical investigations offer a robust basis as we gear up to launch our ovarian cancer clinical program in the latter part of this year. Upcoming trials are designed to assess ivospemin in conjunction with additional polyamine metabolism modulators and immune modulators. In phase I development, we have two programs. Our phase I/II collaboration with Moffitt Cancer Center in STK11 mutant non-small cell lung cancer is open and screening for patients. We look forward to enrolling our first patient this year and initiating the phase II trial in 2025. Last, on the clinical front, we are looking to initiate the neoadjuvant pancreatic investigator-initiated trial in the second half of this year. In addition to our clinical stage programs, we are also making progress in our preclinical development efforts. Currently, we are collaborating with MD Anderson Cancer Center on an ongoing research project.

The primary goal of this initiative is to investigate the potential benefits of combining polyamine metabolic inhibitor treatments with CAR T-cell therapy and bispecific monoclonal antibodies using preclinical models. This preclinical work complements our clinical programs and demonstrates our commitment to exploring innovative approaches to cancer treatment. Additionally, in June, we were excited to announce that our collaborators at Vanderbilt University Medical Center presented oral findings at the recent Digestive Disease Week conference. The presentation, titled Evaluation of the Safety and Efficacy of eflornithine in Patients with Gastric Premalignant Conditions in the High Incidence Areas of Latin America, highlighted the results of a phase IIa placebo-controlled, randomized clinical trial funded by the National Cancer Institute. The study demonstrated that eflornithine, a key component of our polyamine pathway approach, was safe, well-tolerated, and reduced DNA damage long-term in patients after completing treatment.

These findings underscore the potential of targeting the polyamine pathway for both prevention and treatment of cancer, particularly in patients at high risk for developing infection-associated gastric cancer. We are thrilled with the progress made through this collaboration and look forward to further advancing our research in this area. In summary, our projected second half of 2024 clinical milestones include enrolling our first patients in the non-small cell lung cancer phase I trial, opening the neoadjuvant pancreatic cancer trial, opening the phase II ovarian trial, publishing the final phase I/Ib metastatic pancreatic trial data, obtaining the FDA and EMA feedback for global registration trial in FAP. And in 2025, we anticipate the overall survival interim analysis for our phase III ASPIRE trial in the first quarter of 2025, as well as the completion of enrollment.

The second quarter and year-to-date have marked significant clinical development strides for Panbela. We look forward to continued progress and value creation in 2024. I will now turn the call over to Sue to discuss our financial results. Sue?

Susan Horvath (CFO)

Thank you, Jennifer. General and administrative expenses were approximately $1.1 million in Q2 of 2024, compared to $1.6 million in Q2 of 2023. The decrease was primarily due to lower legal fees and lower non-cash compensation expenses in 2024. Research and development expenses were approximately $7 million in Q2 of 2024, up from $4.2 million in the prior year quarter, mainly due to increased enrollment in the ASPIRE trial. Net loss for the quarter was $7.1 million, or $1.47 per diluted share, compared to a net loss of $5.8 million, or $159.15 per diluted share in Q2 of 2023. On April twenty-eighth, 2024, the company signed an amendment to the agreement with US WorldMeds.

In exchange for a second nonrefundable payment of approximately $0.8 million, the company agreed to give up two potential future payments associated with future milestones. This non-dilutive payment was received by the company at the signing of the amendment and is reflected in other income for the quarter. Per the amended terms, total potential payments remaining, if milestones are achieved, is approximately $7.6 million. Total cash as of June 30, 2024, was approximately $59,000. Total current assets were $0.8 million, and current liabilities were $16.8 million at quarter end. Non-current assets, consisting primarily of cash deposits held by our CRO, were $8.6 million. Regarding our capitalization, as of June 30, 2024, we had approximately 4.85 million common shares outstanding.

After including shares reserved for options and warrants, our issued and fully reserved share count was approximately 13.95 million shares. Cash used in operations for the six months ended June 30, 2024, totaled approximately $10.4 million. Cash used in operations included our net loss for the six months, offset primarily by an increase in the company's accounts payable balance. On July 24, 2024, the company entered into a loan agreement with US WorldMeds, LLC. Pursuant to the loan agreement, the company and our wholly owned subsidiary, CPP, obtained a term loan from the lender in the original principal amount of $1.5 million. The loan proceeds were used by the company for payment of fees and expenses owed to its contract research organization for the ASPIRE trial. Panbela's common stock remains eligible for quotation on the OTCQB under the symbol PBLA.

The company is pursuing a new listing of its common stock on a national securities exchange. Operator, we are now ready to take questions.

Operator (participant)

Certainly. Everyone at this time, we'll be conducting a question and answer session. If you have any questions or comments, please press star one on your phone at this time. We do ask that while posing your question, please pick up your handset if you're listening on speakerphone to provide optimum sound quality. Once again, if you have any questions or comments, please press star one on your phone. Please hold while we poll for questions. Thank you. Your first question is coming from Joseph Pantginis from H.C. Wainwright. Your line is live.

Joseph Pantginis (Analyst)

Hello, this is Josh on for Joe. So I just had a question about the pediatric neuroblastoma program. I was wondering if there were any updates that you could give us in relation to the current status of the program with US WorldMeds, ideally about, like, clinical development status or anything like that?

Jennifer Simpson (CEO)

Hi, Josh. Good evening. How are you?

Joseph Pantginis (Analyst)

I'm well.

Jennifer Simpson (CEO)

So they have the FDA approval in the maintenance setting. There was a trial that has been run through Children's Oncology Group in the first line setting. Enrollment, I believe, is done in that trial now, so now it's just, you know, letting the trial run its course. So in terms of anything more than that, that probably would have to be directed to US WorldMeds, but it... They do have an approval, and they are actively commercializing that indication that was approved in December of last year.

Joseph Pantginis (Analyst)

All right. Perfect. Thank you.

Jennifer Simpson (CEO)

Mm-hmm.

Operator (participant)

Thank you.