Aptose Biosciences, Inc.

My name is Jonathan, and I will be your conference operator today. I would like to welcome everyone to the Aptos Biosciences conference call. Fourth quarter entered December 31st, 2021. At this time, all participants are in listen-only mode. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during the session, you'll need to press star 1 on your telephone. If you'd like to withdraw your question, please press the pound key. Thank you. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's program, Susan Pietropolo from Please Go Ahead.

Thank you, Jonathan. Good afternoon and welcome to the Aptos Biosciences conference call to discuss financial and operational results for the year-end and fourth quarter ended December 31, 2021. Earlier today, Aptos issued a press release relating to these financial results. The news release as well as related SEC filings are accessible on Aptos' website. Joining me on today's call are Dr. William G. Rice, Chairman, President, and CEO, Dr. Yodi Morongo, Senior Vice President, Chief Financial Officer, and Chief Business Officer, and Dr. Rafael Behar, Senior Vice President, Chief Medical Officer. Before we proceed, I would like to remind everyone that certain statements made during this call will include forward-looking statements within the meaning of U.S. and Canadian securities laws. Forward-looking statements reflect Aptos' current expectations regarding future events but are not guarantees of performance. And it is possible that actual results and performance could differ materially from these stated expectations. They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievement to differ materially from those expressed. To learn more about these risks and uncertainties, please read the risk factors set forth in Aptos' most recent annual report on Form 10-K and SEC and CEDAR filings. All forward-looking statements made during this call speak only as of the date they are made. Aptos undertakes no obligation to revise or update the statements to reflect events or circumstances after the date of this call, except as required by law. I will now turn the call over to Dr. Rice, Chairman, President, and CEO of Aptos Biosciences. Dr. Rice?

Thank you, Susan. I'd like to welcome everyone to our call for the year-end and fourth quarter-ended December 31, 2021. In today's call, I'll give you a quick recap of highlights for 2021, a status update on our clinical programs, and an outline of the key milestones we anticipate in 2022. To remind you, Aptos is a clinical stage precision oncology company, developing highly differentiated oral kinase inhibitors for the treatment of patients with hematologic malignancies, and today you'll find that we are visibly upbeat about our progress in our molecules, HM43239 and lexeptinib. I also want to stress a few actions that illustrate our team's foresight, which position the company and our drug candidates for success. First, In 2020, we raised capital before some thought necessary, and last year, even with a strong balance sheet, we began a meticulous process to focus resources on the value-driving programs and to streamline expenses, not by cutting corners, but by carefully evaluating the essential needs of our programs. This was implemented strategically to extend cash runway, but without undermining company capabilities or values. Through reprioritization and streamlining of our pipeline programs, we now have extended our cash runway into the fourth quarter of 2023, which we believe goes well beyond the series of potential value-building updates from our clinical programs in this year and in the next year. Second, for Luxeptinib, or just Lux, more than two years ago, we recognized the potential need for an improved formulation as we moved the original formulation through the clinic and demonstrated LUX is an active molecule. We built our CMC team and initiated development of the G3 formulation because we believe such a formulation could improve the opportunity for LUX to demonstrate greater exposure and more responses and to deliver greater value to patients, to the company, and to shareholders. And we now are evaluating that G3 formulation in humans. We initiated a deliberate asset search more than two years ago that led to the licensing of HM43239, or just 239 as we'll refer to it. Now 239 has moved to the forefront of our pipeline. As a more advanced de-risked asset with proven clinical activity, 239 literally added a well-tolerated and effective drug with significant value to our pipeline overnight. And 239 continues to demonstrate value to patients and to impress us and our clinical investigators. And fourth, before we even took control of the 239 clinical trial, we led efforts to rapidly increase the available clinical supply. We also began to expand the number of clinical sites and to introduce protocol amendments to increase the number of AML patients in the cohort expansions. This was done to deliver additional responses, to select multiple doses that could serve as effective expansion doses as a single agent and in combination with other agents and to identify genotypically enriched AML populations for upcoming expansion trials that could serve as populations for accelerated approvals. I also want to acknowledge that we recognize our messaging now focuses far more on 239 ahead of LUX. That is because 239 entered AML patients a year ahead of LUX and 239 already has delivered safety and efficacy data that place it on a fast track. while we will continue to prioritize the more mature 239, we continue to believe in LUX, and we want to give it the best possible chance to succeed as we assess our new G3 formulation. So big picture, because we are forward-looking, we are in the fortunate position of having two well-differentiated oral kinase inhibitors for the treatment of hematologic malignancies, and we will allow the clinical data, the patient needs, and the maturity of the agents to drive the path forward. Collectively, as you know, we take a very disciplined approach to how we run our business and our studies, and our investment in this approach has begun to bear fruit and place the company in a bullish position in 2022. But before we go there, let's recap 2021. During 2021, Aptos continued to dose-escalate in the Lux clinical trials in both acute myeloid leukemia, or AML, and B-cell cancer patient populations. In June, we presented data for both programs concurrently with our participation in the European Hematology Association, or EHA, 2021 Virtual Congress. We reported that in AML, the first two cohorts delivered encouraging antiloquemic activity in multiple patients, including a heavily pretreated AML patient that experienced a durable MRD-negative complete remission. In B-cell cancers, Intermediate doses had delivered clear signals of clinical activity, including tumor reductions across different B-cell malignancies. The reversal of disease growth upon interpatient dose escalation and longer times on drug suggested that even aggressive disease may be successfully challenged with higher exposure levels of LUX. Reminiscent of solubility properties of the BTK inhibitor abrutinib, our original formulation of LUX had low solubility. which forced us to continue to escalate the dose of LUX to seek higher exposures that may demonstrate superior activity. So it was good timing in parallel that the dose escalation of LUX in patients with B-cell malignancies and AML, we made significant progress in the development of a next generation formulation, which we call G3. We have been working to optimize the LUX formulation, as I said, for more than two years. And we announced that in preclinical studies, the new G3 formulation had effectively addressed the solubility issues of the original LUX formulation and delivered up to 30-fold greater exposure on a per milligram basis of drug administered. We'll talk more about G3 in our 2020 update for LUX in a few minutes, but now back to Q4 of 2021. During the fourth quarter of 2021, we delivered additional good news. In November, we entered into an exclusive worldwide license agreement with the Honami Pharmaceutical Company to develop and commercialize 239. Oral 239, our new lead molecule, is clinically validated as a myeloid kinome inhibitor that potently inhibits kinases operative in AML with adverse mutation profiles, including FLT3, SIG, mutant forms of CKIT, and JAK kinases. This kinase inhibitory profile enables 239 to suppress resistance-conferring mutant forms of FLT3 and growth factor pathways, such as the JAK-STAT and the MAP-Kinase-ERK pathways that confer resistance to other agents. 239 already has delivered complete remissions in a diversity of relapsed to refractory AML patients in an ongoing international Phase I-II clinical trial that Dr. Behar, our Chief Medical Officer, will describe to you in a few minutes. Importantly, 239 delivered meaningful clinical benefit to all responders, either through bridging them to a stem cell transplant or by providing a durable response over time. In an oral presentation at ASH in December of 2021, Dr. Novel-Dauber from the MD Anderson Cancer Center, lead investigator for the 239 trial, delivered the first public release of promising clinical results from the ongoing clinical trial. Dr. Darber reported that 239 demonstrated multiple complete remissions, or CRs, in patients with relapsed or refractory AML with highly adverse mutations, thereby allowing us to identify genotypically defined AML populations with high medical need for potential accelerated development, and to establish that 239 has strikingly broad activity across patients with diverse genotypic backgrounds. During the fourth quarter, we worked closely with HONME and principal investigators to ensure a smooth transition of the clinical trial to Aptos, and you will hear more about the 2022 activities for 239 in a moment. As you are aware, at the end of 2021, we also announced the discontinuation of the clinical development of Apto 253. The decision followed prioritization of the company's other, more advanced pipeline candidates. and allows us to operate efficiently as we devote our focus and resources towards the development of our kinome inhibitors, 239 and LUX. Collectively, we took steps to advance and de-risk our pipeline, to prioritize our most actionable programs, to reduce any non-essential expenses, to accelerate patient enrollment and add clinical sites, and to place the company in a position of strength for 2022 that allows for delivery of value-driving milestones within our cash runway. We have a clear vision of our clinical strategy and objectives for the development of 239 and LUX as we continue to execute and advance these clinical programs. And I'm pleased with the rapid progress and the position we've created for Aptos during the first part of 2022. In particular, we expect 2022 to be an important year for 239. So let's have our Chief Medical Officer, Dr. Raphael Behar, move directly into the update for 239. Raph?