Aptose Biosciences, Inc.

Good afternoon. My name is Chandalyn and I will be your conference operator today. I would like to welcome everyone to the Aptos Biosciences conference call for the third quarter ending September 30th, 2022. At this time, all participants are in listen mode. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star 11 on your telephone keypad. If you would like to withdraw your question, please press the pound key. Thank you. As a reminder, this conference call is being recorded, and I would like to take this time to introduce Mrs. Susan Pietro Paolo. Susan, please go ahead.

Thank you, Shanderlyn. Good afternoon and welcome to the Aptos Biosciences Conference call to discuss financial and operational results for the third quarter ended September 30th, 2022. 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. Rafael Behar, Senior Vice President and Chief Medical Officer, and Mr. Fletcher Payne, Senior Vice President and Chief Financial 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. They 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 at 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 want to welcome everyone to our call for the third quarter ended September 30, 2022. Let's begin the call by addressing an issue that's on the minds of all of our shareholders. We are acutely aware that the biotech market has experienced a significant year-to-date downward trend, and similarly, the company stock has fallen with the tide to trading at significant significant lows. Positive news releases, buying of Apto stock by management and other insiders, investor presentations, and positive meetings with many quality investors have not yielded improved share prices to date. Ironically, as we presented to fundamental healthcare investors with domain knowledge, a common viewpoint emerged that our lead clinical candidate, HM43239, or just 239, looks like a real drug that gives complete remissions as a single agent. in very challenging AML patients. And they were surprised that they had been unaware of 239 and its strong clinical activity. From a drug development perspective, Aptos is by far in the best position in which it has ever been. And Aptos employees share a sense of purpose to develop safe and potent drugs for patients whose lives are being threatened by acute myeloid leukemia or AML. We now are wrapping up a very successful phase one trial with 239 in patients with relapsed or refractory AML. We performed extensive dose exploration that demonstrated a highly favorable safety profile and that has allowed us to assemble a superior safety package. We also explored extensive mutational diversity among AML patient populations, and this approach revealed a breadth of formal responses across a diverse group of very ill and difficult-to-treat AML patients, including many who already had been treated with and had been failed by the best available therapies. We continue to see rapid blast reductions and impressive response rates in mutationally defined subgroups across three dose levels of 239, and we look forward to providing the full scope of data from the phase one trial during December at the ASH conference. Meanwhile, we continue our outreach to investors to broaden the awareness around the growing 239 data package. This trial has delivered everything we had hoped. It now is complete, and we are moving on to our dose expansion program. to explore single agent and combination therapy in enriched AML populations and position 239 for single arm phase two registrational studies with an eye toward accelerated approval. With regard to the market, we take a calm and long-term perspective. According to a McKinsey article earlier this year, biotech stocks have taken a major hit and companies without commercial stage assets have been affected most severely. The cycle is a familiar one for the sector, and with history as our guide, it is a question of when, not whether, the biotech public market will turn more favorable. In the meantime, emerging companies like Aptos might better weather such headwinds by scrutinizing cash management and financing, by continuing recruitment of exceptional talent, by identifying the best options to achieve planned milestones, by quietly and systematically collecting clinical data and de-risking their assets, and by determining the appropriate timing and magnitude of data to be released. And that's exactly what we've been doing, to give Aptos and our two assets, 239 and LUX, the best paths for success within these market conditions. With that said, now I'll move to discussions of our clinical assets, and let's start with LUXeptinib, or LUX as we call it. Afterwards, I'll give an overview of 239 before handing it over to Dr. Behar for additional information on our clinical plans. As a quick reminder, Luxeptinib, formerly called CG806 and now referred to as LUX, is our secondary program. LUX is a clinical stage oral FLT3 and BTK kinase inhibitor that we've had in development for B-cell malignancies and AML. While we observed clear signs of drug activity and clear target engagement of BTK and FLT3, the original Generation 1 formulation exhibited limited absorption and only one patient administered the original formulation was able to achieve exposures of LUX to enable a complete response. However, we have been developing a new formulation for LUX, the G3 formulation, over several years for more rapid and more efficient absorption and for economic reasons to reduce the amount of drug substance to manufacture. As we reported in September of this year, the new G3 formulation demonstrated up to an 18-fold improvement in oral biobatability relative to the original G1 formulation when tested as a single dose in patients. As of today, we've tested G3 as a single dose with 10 milligrams, 20 milligrams, 50 milligrams, 100 milligrams, or 200 milligrams in a total of 20 patients and assembled a PK package around the new formulation. We then amend the protocol of our existing phase one clinical program and submitted it to the FDA to incorporate continuous dosing and dose escalation of G3 in the ongoing trial and to phase out the original G1 formulation. And we expect to commence continuous dosing of G3 very soon. If the G3 formulation increases steady state exposures and delivers responses, we then have the potential to pursue certain types of cancers, inflammation, and autoimmunity indications as well as work to identify an appropriate development partnership for this very unique molecule. Now let me turn to 239, our lead clinical program. First, I want to note that an official generic name has been established for 239, and that name is Tuspetinib, spelled T-U-S-P-E-T-I-N-I-B. Now let's discuss how Tuspetinib can be applied to the treatment of AML. As most of you are aware, AML is a highly heterogeneous disease characterized by a multitude of genetic and epigenetic alterations. This makes the treatment of AML both diverse and challenging because AML disease in each patient may present with a different set of manifestations and may be influenced by multiple oncogenic drivers rather than a single genomic alteration. Several companies are developing investigational drugs directed at specific targets that are operative in a particular segment of the AML population. With our lead clinical compound, Tospetinib, we are pleased that it represents a broader scope drug with the potential to treat multiple mutationally defined populations of patients in their fight against AML. Tospetinib potently does so by targeting a handful of clinically validated kinases essential for key oncogenic signaling and rescue pathways that contribute to drug resistance or recurring disease. Yet, Tospetinib successfully avoids other kinases often associated with toxicities. Indeed, Tuspitinib already has demonstrated clinical responses with compelling response rates in multiple mutationally defined target populations of relapsed or refractory AML patients, both with and without FLT3 mutations. And Tuspitinib has achieved these clinical responses at doses with no drug-related SAEs, no drug-related deaths, no drug-related QTC signals, and no differentiation syndrome. I'm happy to report that we have successfully completed the dose escalation and dose exploration stages of our Tuspatinib Phase I trial and have treated approximately 60 relapsed or refractory AML patients, previously treated with multiple agents, including chemotherapy, BCL-2 inhibitors, hypomethylating agents, FLT3 inhibitors, and other targeted agents. Rather than trying to run up the score in one specific AML subpopulation, we explored the activity of tuspetinib in a breadth of relapsed and refractory AML patients with extensive mutational diversity. And once daily, oral tuspetinib delivered for these patients formal responses in several mutationally defined populations of difficult to treat patients, some of which were entirely unanticipated and would not have been identified if we had performed a more narrowly focused clinical program. Simply, the trial yielded everything you could ask for in a phase one trial, including impressive response data that guide us to pursue several mutationally defined patient populations and a hearty safety package that allows us to select our doses for the next stage of development. The proven breadth of activity and superior safety of Tospetinib lends itself to combination therapy, potentially as the drug of choice addressing the most sizable markets in AML. We already have reported significant clinical activity and complete remissions across three dose levels, 80 milligrams, 120, and 160 milligrams, without DLTs, and we continue to observe additional clinical activity as responses mature. We believe Tospetinib is a real drug for a real disease, and we plan to disclose the full data set around ASH. I'll remind you that the ASH abstracts that will be coming out later this week will not contain the most updated data. The abstracts are placeholders for a broader data set that will be presented at the meeting in December. We also plan to host a quick and virtual KOL call in conjunction with the conference, and we will provide additional information on the timing of that call in the coming days. I also want to call out Dr. Behar and our entire clinical development and clinical operations groups that have increased the rate of patient accrual for Tospetinib this year by more than 40% over any previous year of this program. Their execution truly has been remarkable. In a few moments, Dr. Behar will talk more about our clinical plans for tespitinib. First, I'd like to highlight one additional piece of recent news. In September, we were pleased to add another renowned member to our board of directors with the appointment of Dr. Bernd Seitzinger. Dr. Seitzinger is an accomplished executive leader with more than 25 years of industry experience in both US and European biotechnology and pharmaceutical companies and multiple financial advisory positions. He has held biotech CEO and CSO positions, as well as numerous senior executive and board positions, including with Bristol Myers Squibb, where he served as senior vice president of oncology drug discovery and vice president for corporate and academic alliances. Aptos benefits from our strong board of directors and our Scientific Advisory Board, led by Dr. Brian Drucker. And we are happy to add Dr. Seitzinger to that distinguished group. I'll now turn it over to our resident KOL, our Chief Medical Officer, Dr. Rafael Behar, to talk more about our clinical plans. Raf?