Aptose Biosciences, Inc.

everyone to the Aptos Biosciences conference call for the second quarter ended June 30th, 2023. 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 this time, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. If you would like to withdraw your question, please press star 11 again. Thank you. As a reminder, this conference call may be recorded. I would like to introduce Ms. Susan, Pietro, Paolo, please go ahead. Thank you, Jada.

Good afternoon and welcome to the Aptos Biosciences Conference call to discuss financial and operational results for the second quarter ended June 30th, 2023. 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, 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 and SBC 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. We encourage you to refer to today's press release and attend to you for additional information and disclosures regarding today's announcements. 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 second quarter ended June 30th, 2023. You likely have noticed that we've been relatively quiet since our last call, but there's been a lot going on behind the scenes since our last call in June, And today we're happy to provide some important updates. I'll also point out that many of the details related to today's comments on this call are provided in the accompanying press release and 10Q that were filed earlier. I want to begin today with speaking about financing activities. Earlier this year, we had the opportunity to raise capital with the financing, what I'll refer to as flavor of the day, which would have included extensive warrant coverage and would have been extraordinarily dilutive to our team and to our existing investors. At that time, we chose not to execute such a financing, but rather to activate an at-the-market or ATM facility and to establish a committed equity facility, neither of which would involve warrants. Plus, we told our board that we would seek partnership investments. So today, we're delighted to highlight our most recent news regarding our esteemed partner, Hanmi Pharmaceutical of South Korea, from whom we licensed Tospetinib about a year and a half ago. Today, we announced that Honme committed to purchase Aptos Equity up to a total ownership of 19.99% over two tranches and up to a limit of $7 million. We're delighted to strengthen our relationship with Honme, which reflects the recognition of the growing value of Tuspetinib as a unique treatment for AML and possibly MDS, and the significant progress that Aptos has made with Tuspetinib's clinical development. We thank the Honme team, and in particular, Ms. Lim, president of Honme Pharmaceutical, for her leadership and her commitment to Aptos. Our CFO, Mr. Fletcher Payne, will provide a more detailed financial update later in our presentation today. But I want to point out that in addition to the economy investment, during the quarter we did activate an ATM facility and we did enter into a $25 million committed equity facility with Keystone Capital. We're pleased to have secured these financing instruments as promised, although today we have only used the ATM and committed equity facility to a limited capacity and in situations when we believe they would not have a material impact on the trading of stock. In addition to these financing activities, we also continue to pursue and evaluate partnering activities that may provide strategic support for our programs. It's fair to say the interest in our key clinical asset, Tuspetinib, continues to grow and we continue to engage in productive discussions. Ultimately, we expect that a global reach will be required to realize the full impact of Tuspatinib at the patient level and the full commercial value of Tuspatinib. So, we continue to take steps with the clinical development plan and with partnering discussions to achieve that global reach for Tuspatinib. Another highlight of the second quarter was a successful end-of-phase-1 meeting with the U.S. FDA for Tuspatinib. We completed an extensive dose escalation and dose exploration trial with Tuspatinib in accordance with the guidance of the FDA's Project Optimus, and we then presented our findings to the FDA. We were pleased with the outcome of the end-of-phase-1 meeting, and it dovetailed perfectly with our ongoing Aptivate expansion trial in which highly treatment-experienced relapsed or refractory AML patients are being dosed with Tuspatinib as a monotherapy, or in combination with venetoclax. In a few minutes, our chief medical officer and resident KOL, Dr. Rafael Behar, will provide an overview of our recent findings with Tuspetinib, including takeaway messages from our end-of-phase one meeting with the FDA. But before he does so, I want to emphasize that we are data-driven as an organization. And since the last earnings call, we've been quietly gathering information from published research, from our collection of KOLs, from our internal KOL, Dr. Behar, and from our clinical trials, to understand the emerging needs of AML patients. It's essential for us to understand what AML patients truly will need in the future, and how we best apply tespetinib to those needs. Aptos benefits from having some of the most respected hematology minds as our investigators, on our scientific advisory board, and on our hematology clinical advisory board. Our KOLs include Dr. Novel-Dauber, Dr. Courtney DiNardo, Dr. Michael Andreev, Dr. Brian Druker, Dr. Sasha Pearl, and other hematology-focused KOLs from numerous sites in the US, Europe, the UK, Australia, and other regions, and our KOLs at a recent meeting of our advisory board, providing us with insights, emerging trends, and patient needs that are not yet available through publications. Gleaning from the guidance of these thought leaders, we see several scenarios in which we believe Tospetinib could improve upon the standard of care for AML patients currently imperfectly being served by therapies. It's becoming clear that one of the greatest needs is for the superior combination therapies with targeted agents in frontline newly diagnosed AML patients to reduce toxicities, to boost response rates, and to deliver greater durations of response without relapses. Doublet therapy with venetoclax and hypomethylating agents, or HMAs, can deliver 60 to 70% response rates in frontline unfit patients, and there's a desire to move the highly effective and less toxic therapies into more fit patients and move away from intensive chemotherapy. But to effectively treat a breadth of frontline AMO patients with cocktails of targeted agents, the cocktails must be even more effective. Toward that end, Triplet therapy of venetoclax and HMAs, coupled with an antiproliferative drug, has been explored recently in frontline AML patients, and this triplet cocktail of targeted agents delivered a remarkable near 100% response rate. While this is encouraging, the antiproliferative drugs used in that study were FLT3 inhibitors. Unfortunately, the FLT3 inhibitors used in that study were associated with prolonged myelosuppression, QTC prolongations, and are applicable only to approximately 30% of the AML population, those with a mutation in FLT3. The need in triplet therapy is for a superior antiproliferative agent that is once daily, can be taken orally with venetoclax, causes less myelosuppression, and avoids QTC prolongation with long-term dosing, and can serve not only the FLT3 mutated population, but also the remaining 70% of the AML population with unmutated FLT3. These characteristics describe tuspetinib, and we want to drive tuspetinib through doublet combination studies with venetoclax on the way to triplet therapy and frontline AML. Dr. Dauber is a leader in triplet therapy for AML patients, and we will leverage his expertise to apply tuspetinib to the triplet therapy approach in our future trials. Separately, there's a need for superior maintenance therapies that are convenient to take orally, that are well-tolerated and non-myelosuppressive, that can protect from relapse and extended disease-free survival, and that can serve AML patients with mutated and wild-type FLT3, as well as patients with mutations in TP53, RAS, NPM1, MLL, and other adverse genes. Again, those needs in maintenance therapy precisely correspond with tuspetidin properties, and we want to drive tuspetidin toward maintenance therapy as rapidly as possible, although such an approval would most likely follow initial approvals for doublet and triplet therapies with tuspetinib. While we believe tuspetinib can be applied effectively to triplet therapy and maintenance therapy in the future, let's talk about the here and now. I want to underscore the greatest emerging need, and that is to effectively treat AML patients who already have failed treatment with venetoclax. The vast majority of UAS-based AML patients entering clinical trials now have tried and been failed by venetoclax at some point. In fact, venetoclax is so commonly used It's jokingly referred to as vitamin D. Regrettably, prior therapy with and failure of venetoclax leaves patients with very high-risk biology, with broadly resistant mutation patterns, and with dismal response rates to salvage therapy. and with CR rates in the single digits, whether treated with various monotherapy or drug combinations as salvage therapy. Indeed, we see from our APTIVATE expansion trial that the lion's share of patients entering the study have wild-type unmutated FLT3 and have failed prior therapy with venetoclax. There is a clear medical need. Remarkably, our preliminary data from the APTIVATE trial in patients treated with a combination of tuspetinib and venetoclax, or TUSBEN as we refer to it, show that doublet has been well tolerated and that a significant response rate has been observed in patients who already have failed venetoclax, thereby potentially expanding the pool of patients that may be responsive to venetoclax. Dr. Behar will provide additional color regarding our preliminary findings with the TUSPEN drug combination, but these data are generating excitement among our team and the investigators, as reflected in a very brisk enrollment rate. During the coming months of August, September, and October, we plan to place as many patients as possible on the Tusvin doublet to collect data to demonstrate the doublet is active in patients who have prior venetoclax failure with mutated and unmutated FLT3, to meet and share preliminary data with bankers, analysts, investors, and potential partners to show how we can position Tospetinib for frontline triplet therapy and maintenance therapy, and to move Tospetinib and Aptos on a clear path toward success. Now, as for Luxeptinib, or LUX as we call it, we currently have continuous dosing ongoing in the clinical setting with the 200 milligram dose of the G3 formulation, and we will have more definitive comments about LUX with the G3 formulation in the coming weeks. And finally, I'm certain you wish to know about upcoming milestones. I'll remind you that we may provide updates during earnings calls and medical conferences but also at any time we see necessary or consider information as material. Because the upcoming milestones are linked to clinical data, I'll ask Dr. Behar to outline the milestones after he provides the clinical update. With that, let me now hand it over to Dr. Behar, our Chief Medical Officer, to go over more detail about the Abtivate Clinical Trial of Tespetanib and AML, and to go over our clinical plans and timelines with you. He also will be available to answer questions. Graf?