Aptose Biosciences, Inc.

Good afternoon. My name is Hope and I will be your conference operator today. I would like to welcome everyone to the Aptos Biosciences conference call for the third quarter ended September 30th, 2023. At this time, all participants are in a 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 that 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 now like to introduce Ms. Susan Pietropalo. Please go ahead. Thank you, Hope.

Good afternoon and welcome to the Aptos Biosciences Conference call to discuss financial and operational results for the third quarter ended September 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 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 SDC 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. Wright.

Thank you, Susan. I want to welcome everyone to our call for the third quarter ended September 30th, 2023. Today, I first want to remind everyone that earlier this year, we knew we had an impressive lead agent in Tuspatinib for the treatment of patients with AML. but we also had a limited cash runway to develop it. Strategically, we avoided any punitive financings and any potential warrant overhang. Rather, we extended the cash runway with an at-the-market or ATM facility, with a committed equity facility, and through an investment by our partner, Honmy Pharmaceutical. This was designed to give us breathing room and time to collect critical data with Tuspitinib that may drive improved financing terms and potential collaborations. We then undertook the Aptivate expansion trial to understand Tuspatinib single-agent activity and to identify relapsed to refractory AML populations with unmet needs and who are particularly sensitive to our Tuspatinib plus Venetoclax or TUSDEN doublet therapy. We learned that Tuspatinib as a single agent at our 80 milligram recommended phase two dose is highly active in patients naive to Venetoclax, with CR-CRH rates of 42% across all available patients, 60% in FLT3 mutated patients and nearly 30% in FLT3 wild-type patients, demonstrating potent single-agent activity across a breadth of patients. But we also observed that as we dose escalated above 80 milligrams to higher dose levels of tespatinib as a single agent, the response rates unexpectedly dropped. Initially, we were unsure what was driving this difference, but after careful analysis, we learned that the patients entering the higher dose levels of 120 milligrams and above represented an entirely different patient population. At the point in time when we transitioned above the 80 milligram dose, suddenly more than 80% of the patients coming onto our trial had failed prior therapy with venetoclax, and these Venn failure AML patients are known to be far less responsive to salvage therapy. The Venn failure patients continued to respond to Tuspatinib as a single agent, but at a lower response rate, so that mystery was solved. But more importantly, this rapidly emerging VIN failure population revealed a unique opportunity for Tospetinib. That's because Tospetinib targets the resistance mechanisms employed by AML to become resistance to venetoclax, which includes mutations in FLT3, KIT, JAK, and RAS pathways, and increases an MCL1 expression. These VIN resistance mechanisms play directly into the targeting capabilities of Tospetinib and suggested tuspetinib may resensitize VIN failure patients to venetoclax, and that the tuspetinib venetoclax, or TUSBIN doublet, may effectively treat this patient population in critical need of new therapies. And indeed, now we have learned that the TUSBIN doublet is clearly active in the relapsed or refractory VIN failure AML patients. In August of this year, we released our first data from 10 available patients that have received the TUSBIN doublet. nine of whom were VIN failures. The composite complete remission, or CR rate, was 44% among the VIN failure patients, whether they were FLT3 mutated or FLT3 wild type. That was impressive, and we continue to enroll these VIN failure patients onto the TUS and doublet. We then released a second data cut in September, showing roughly the same composite CR rates among 15 available patients. These data then generated tremendous investigator enthusiasm to place additional patients on the TUSDEN doublet. By the time we reached our planned presentation at the European School of Hematology conference last week, we had expected a total of up to 30 patients to have been dosed with the TUSDEN doublet. But we actually had dosed 49 patients with the doublet as of our data cut on October 23rd. To be clear, many of these patients were very early in their course of treatment. just two to six weeks into the treatment in many cases. The composite CR rate at this point in time with these early patients was about 29%, plus additional partial responses, or PRs, that emerged early for an overall response rate of 48%. While those early PRs are not yet CRs and are not counted in the composite CR rate, they are noteworthy. For example, one patient entered the trial with a bone marrow blast count of 82% and dropped quickly to 7% after receiving the Tusman doublet. That's a dramatic reduction in disease burden, but not quite below 5% in the bone marrow blast, so it scored as a PR. We'll continue to treat and watch such patients with the hope that many of these responses will mature to CRs over time. In fact, For all ongoing patients on the trial, we will continue to collect response maturation data and duration of response data. And to highlight our ability to execute this trial, we're approximately two quarters ahead of our expected enrollment rate in the Aptivate trial, and that will allow us to watch for maturation of responses and extended duration of response data earlier than we had expected, and to wrap up this trial up to two quarters earlier than we had expected. So what will we do with our findings? First, this sets us on the registrational path with the TUS-BEN doublet and relapsed to refractory then-failure AML patients, inclusive of both FLT3 mutated and FLT3 wild-type patients. And that registrational study could begin the second half of 2024 and potentially provide an accelerated approval pathway. Second, data with the TUS-BEN doublet are segueing us into the TUS-BEN doublet venetoclax azacitidine triplet pilot study in frontline newly diagnosed AML patients. That study is planned to begin the first half of 2024, and the findings could then support a TUS-BEN hypomethylating agent registrational trial in frontline AML. TUS-BET has demonstrated potent activity across diverse AML groups with adverse mutations, has a favorable safety and tolerability profile, is convenient as a once-daily oral tablet and mechanistically targets the venetoclax resistance mechanism. This makes tespetinib an ideal drug for frontline combination therapy and for combination therapy in the relapsed or refractory AML populations, particularly for the emerging wave of patients who fail venetoclax. In addition, these same properties of tespetinib and its action on AML patients are leading us to include the treatment of patients with higher-risk MDS and CMML in our trials going forward. We now are leveraging our clinical findings and plans to support financing and collaboration discussions. While we have no announcements to make and can make no commitments in these regards, we clearly are pursuing these paths. I now want to turn the call over to Dr. Behar, our chief medical officer and resident KOL, for his insights and comments on our latest data. Raf?