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Moleculin Biotech (MBRX): Progress Toward Acute Leukemia Therapy

Moleculin Biotech is developing treatments for acute myeloid leukemia (AML) and other cancers.

Acute myeloid leukemia (AML) is a cancer of the blood and bone marrow. It is the most common type of acute leukemia in adults, according to the National Cancer Institute. Estimates from the American Cancer Society call for over 62,000 new cases of leukemia this year, of which over 21,000 will be AML, and about 24,500 deaths, of which 10,600 will be from AML. Any of the blood-forming myeloid or lymphoid cells from bone marrow can turn into a leukemia cell and cease to develop in a normal way. In most cases the problem is that leukemia cells don’t die when they should; rather, they survive and build up in the bone marrow. Over time, these cells spill into the bloodstream and spread to other organs.

Source: Medical Animation Videos Library

The only viable option for acute leukemia patients is a bone marrow transplant, which, when it’s possible, is successful in about 80% of patients. The catch is that patients must first completely clear their bone marrow blasts (or tumor cells) before qualifying for a transplant and the chemotherapy used to do so only succeeds only about 20% of the time. The current approved induction therapy with anthracyclines (category of chemotherapeutics including doxorubicin) can damage the heart, and therefore must be dose limited in their administration. Additionally, the tumor cells often present developed resistance to the first line induction therapy, further limiting the effectiveness of the chemo. Therefore, about 80% of AML patients have no recourse, as there is no approved second-line therapy once the chemotherapy fails.

Annamycin and MD Anderson Cancer Center

We’ve been following a company called Moleculin Biotech (Nasdaq: MBRX) whose lead developmental compound is a novel anthracycline called Annamycin, which the company believes is better than the currently approved therapy drugs in four key ways:

  1. Demonstrated clinical activity in a patient population for whom there are currently no effective therapies
  2. Appears to be capable of avoiding the resistance mechanisms that can limit the effectiveness of currently approved anthracyclines
  3. Shown to be non-cardiotoxic in animal models, when compared with doxorubicin
  4. Shown to be more potent than the leading approved drug in laboratory studies using AML cell lines

Two weeks ago Moleculin Biotech announced that it had signed a new technology license agreement with MD Anderson Cancer Center based on new patent applications it intends to file relating to Annamycin for the treatment of relapsed or refractory AML. The company has a long history with MD Anderson, ranked as the #1 hospital for cancer care by US News & World Report, as each of Moleculin’s platform technologies is based in part on discoveries made at that hospital. In May 2017, the company received Orphan Drug designation from the FDA for Annamycin.

Balance of Pipeline

In June 2017, Moleculin announced that it had entered into an agreement with a physician at the Mayo Clinic to enable additional research on the company’s WP1066 candidate for the possible treatment of pedatric diffuse intrinsic pontine glioma (DIPG), a rare and aggressive form of brain tumor. Mayo Clinic studies have suggested that DIPG may be particularly sensitive to the inhibition of the activated form of a cell-signaling protein called STAT3 – a primary target of Moleculin’s WP1066 – and the Mayo Clinic’s preliminary studies have demonstrated significant anti-tumor activity of WP1066 in DIPG in tumor models.

Also in June 2017, Moleculin announced the discovery of a metabolic inhibitor with the potential to treat pancreatic cancer, which has the highest mortality rate of all major cancers. In preclinical testing, the company’s WP1234 compound has shown improved drug characteristics when compared with previous compounds and a 20 to 50-fold greater ability to kill pancreatic cancer cell lines when compared with traditional inhibitors of glycolysis, the first stage of the breakdown of glucose that doesn’t require oxygen. Pancreatic cancer thrives even in a reduced oxygen environment, which indicates that it may be highly dependent on glycolysis to survive.

Source: Moleculin Biotech website

MBRX Stock

Moleculin went public in May 2016 in a $9.2 million offering at a $50.6 million post-money valuation. The stock has had a volatile ride since then typical of early stage biotechnology companies. In March 2017 the company completed a $5 million units offering (1 share of common + 3 different classes of warrants to buy an aggregate of 2 common shares. The Series B warrants have expired, and the Series A and Series C warrants have a 5-year life) with the stock at $1.35. In May 2017, the stock fell below $1, and the company received the price deficiency warning from Nasdaq. With the subsequent spikes in June and July on the news of the advances the company has made in prostate and leukemia development, respectively, the stock is back in $3 territory and has regained Nasdaq listing compliance.

One comparable transaction that Moleculin CEO Wally Klemp highlighted in a June 2017 conference call is Jazz Pharmaceuticals’ (Nasdaq: JAZZ) acquisition of Celator last year for $1.5 billion. Celator’s lead product is a reformulation of the current first-line induction therapy for AML. This improved delivery method of the same drugs currently being used resulted in an increase in the average overall survival of AML patients by 3.5 months, which spurred the deal by Jazz Pharmaceuticals. “Although the potential improvement is meaningful,” said Mr. Kemp, “its impact is limited, because even this improved induction therapy likely won’t work for most patients, based on what we know. With this in mind, we believe Annamycin has the potential to present a significant benefit to those AML patients who don’t succeed with the current standard of care, by providing the first-ever second-line therapy to qualify them for a curative bone marrow transplant.”

The close collaboration with MD Anderson enables Moleculin to conserve cash, and we believe that the company’s progress toward developing treatments for prostate cancer and AML demands our attention despite its preclinical stage. Investors should expect continued volatility, as the stock will be very much driven by clinical news and the outcomes or lack thereof, but the stock clearly fits on our risk-reward spectrum of companies worth watching.

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