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spk10: My name is Jonathan, and I will be your conference operator today. I would like to welcome everyone to Aptos Biosciences conference call for the fourth quarter and year ended December 31st, 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. And now I'd like to introduce your host for today's program, Susan Pietropalo. Please go ahead.
spk12: Thank you, Jonathan. Good afternoon and welcome to the Aptos Biosciences Conference call to discuss financial and operational results for the fourth quarter and year ended December 31st, 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 APT House's 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, Chief Financial Officer, and Chief Business Officer. Before we proceed, I would like to remind everyone that certain statements made during this call will include forward-looking statements within the meeting 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 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. We encourage you to refer to today's press release and the 10-K for additional information and disclosures regarding today's announcements. I will now turn the call over to Dr. Rice.
spk16: Thank you, Susan. I want to welcome everyone to our call for the fourth quarter and year-ended December 31st, 2023. Today, we will provide updates on our financial status, on the near-term and long-term clinical development plan for our lead agent, Tuspetinib, and a quick update on our Luxeptinib program. From a financial perspective, during 2023, we financed corporate activities with cash gleaned from our ATM facility, from a committed equity facility, and through a strategic investment by our partner, Hanmi Pharmaceutical. Then in January of this year, we closed financing with gross proceeds of $13.7 million, inclusive of a $9.7 million public offering, along with a separate $4 million private placement with Hanmi Pharmaceuticals. This provided us with more breathing room, and Mr. Fletcher Payne, our CFO and CBO, provide additional financial details in a few minutes. I now want to pivot to our lead program, Tuspitinib. So why should you care about Tuspitinib? It's because tusfetinib, or TUS as we often call it, is a convenient, poorly administered, once-daily kinase inhibitor with an excellent safety profile and potent antileukemic activity that is being developed for the treatment of acute myeloid leukemia, or AML. And we believe a tusfetinib-containing triplet regimen can become a new standard of care for the frontline treatment of newly diagnosed AML patients across the broadest set of genetic subtypes. and today we'll explain why we believe this and how we arrived at this point. First, you're aware that we've been performing studies in relapsed or refractory AML patients with Tuspetinib as a single agent and with Tuspetinib in combination with Venetoclax, which we refer to as the TUS-VEN doublet. The valuable findings gleaned from these studies have now led us to pursue the development of Tuspetinib as a triplet combinations therapy for the frontline treatment of newly diagnosed AML patients as the highest priority. The triplet includes TUS-BETNIP, the BCL-2 inhibitor venetoclax, and a hypomethylating agent, such as acesodidine, collectively referred to as the TUS-VEN-HMA triplet. In fact, we just heard from a group of KOLs in AML that they had great enthusiasm for the safety and activity of TUS-BETNIP, and they believe this is a real drug with the potential to go all the way. These KOLs and our internal team all agree that the immediate focus of TUSBEN should be primarily on the TUSBEN HMA triplet. And that is precisely where we're focusing our resources. Because this TUSBEN HMA triplet has the potential to deliver the greatest patient impact, the greatest commercial impact, and the greatest return to our investors. At the patient level, we believe TUSBEN can have its greatest impact and frontline AML by improving the response rates, the depths of responses, the durability of responses, the quality of life, and the long-term survival across the diversity of AML patients relative to the current Venn HMA standard of care and frontline AML patients who are ineligible for intensive chemotherapy. Plus, the commercial aspect or impact of the TUS-Venn HMA triplet and frontline therapy is estimated to exceed $1 billion annually, and we've heard from many potential partners that the application of the TUSBEN HMA to the frontline market is of primary interest to them. Indeed, the safety, breadth, and efficacy profiles of TUSBEN today make us believe that TUSBEN can be the best agent to combine with the BEN HMA, which is the current standard of care. While the goal for the TUSFETNIV program is to move into frontline EML therapy at the triplet, the path to the frontline triplet began with the TUSFETNIV single-agent trial and then transitioned through the TUSFEN doublet trial to understand activities, safety, and contribution of components. With the TUSFETNIV single-agent trial, we completed enrollment of 93 patients across six dose levels. TUSFETNIV single agent achieved an excellent safety profile without many of the key liabilities seen in competitor agents. It demonstrated broad activity across AML populations with adverse genetic alterations. We observed a three-fold longer median overall survival in responding patients relative to non-responders. And 80 milligrams once daily was selected as the recommended phase two dose for single agent therapy. With the 80 milligram dose level, Tuspatinib single agent was highly active achieving high quality responses with high response rates. We were delighted to see a strong 36% CRCRH rate among all Cumber genotypes in patients who had not previously been treated with venetoclax, referred to as then-naive patients. Notably, at the 80 milligram dose level, few of the patients had failed prior therapy with venetoclax. However, as we dose escalated above the 80 milligram dose level, we saw that prior VIN failure patients were emerging as a new category of relapsed refractory AML at that point in time. And the proportion of prior VIN patients increased dramatically to greater than 80% in the next dose level of 120 milligrams. Once patients fell of venetoclax-containing therapy, they're more refractory to all subsequent salvage therapies, including Tuspitinib as a single agent. And this led to lower response rates in the 120 milligram dose level and then in the 160 milligram dose level. Fortunately, there is a silver lining to this change in the relapsed refractory AML patient population. In our past scientific conference presentation, we've described how tuspetinib targets the venetoclax resistance mechanism and how tuspetinib can combine synergistically with venetoclax in animal models. Plus, we've shown that tuspetinib-resistant AML cells are hypersensitive, 2,000-fold more sensitive to venetoclax. This mechanistic complementarity provided a rationale for us to combine tuspetinib with venetoclax to evaluate the TUSPEN doublet and the relapsed refractory AML population. In our TUSPEN doublet trial, we now have completed enrollment with 40 mg tuspetinib and with 80 mg tuspetinib combined with 400 mg venetoclax in a total of 79 patients. First, we observed that the excellent safety profile of TUS-BETNIF as a single agent was maintained with the TUS-BEN doublet. We observed bone marrow leukemic blast reductions in the majority of patients, including those who failed prior therapies with FLT3 inhibitors or prior venetoclax therapy. And we continued to see evidence of broad activity across AML patients with a diversity of adverse mutations, including patients who had failed prior therapy with venetoclax. We see great promise for the TUSPEN doublet to effectively treat the prior Venn failure patients and even become a standard of care for those patients. And there remains a potential accelerated approval path for the TUSPEN doublet in a molecularly defined subpopulation of relapsed refractory AML, especially if we increase the dosage of TUSPEN and the TUSPEN doublet and demonstrate even greater activity. This has been a source of high interest for KOLs, collaborators, and certain potential partners. And as resources become available, we would like to pursue the TUSBEN doublet with higher doses of TUSBEN for the relapsed refractory population. However, in the near term, we have chosen to focus our resources on the TUSBEN HMA triplet and frontline AML therapy. So our next step to build value as quickly as possible will be to initiate a TUSBEN plus venetoclax plus azacitidine triplet pilot study in frontline newly diagnosed AML patients, and to select the optimal triplet dosage of Tuspatinib, which will be driven by CR, CRH rate, MRD negativity, and safety data. After selecting appropriate phase two doses of the triplet, we plan to transition into registrational studies that compare the safety and efficacy of the triplet to the then HMA control for frontline newly diagnosed AML patients. I also want to mention that our ongoing BD conversations with a number of large pharma companies emphasize a need for the AML therapeutic paradigm to focus on creating more effective, more durable, broader acting, and less toxic frontline cocktails of targeted agents for AML patients. And they point to the frontline triplet therapy at the cornerstone of a commercial success. It's clear that we can create the greatest value for Tuspatinib and the shortest period of time are in for the least amount of capital by performing a TUS-BEN HMA triplet pilot study in frontline AML patients, and such data can then support partnerships for later stage development of TUS-BEN. So this provides you with a framework of our strategic thought process, and Dr. Behar, our chief medical officer, will provide you with additional clinical insight in perspectives in a few minutes. But first, I also want to mention our other drug, Luxeptinib. You will recall that LUX, as we often call it, is an oral highly potent kinase inhibitor that selectively targets defined kinases operative in myeloid and lymphoid hematologic malignancies. This molecule has been evaluated in a Phase I AB study for the treatment of patients having relapsed to refractory B-cell leukemias and lymphomas, and in a Phase I AB study for the treatment of patients with relapsed to refractory AML. Enrollment and in dosing of patients in the B-cell malignancy trial has now been completed, including 36 patients who were dosed with the original G1 formulation across five dose levels ranging from 150 milligrams to 900 milligrams BID. In this trial, LUX achieved tumor shrinkage among 63% of the available B-cell cancer patients and across dose levels from 450 to 900 milligrams. This also includes a complete response, or CR, in a DLBCL patient and impressive tumor reductions in follicular lymphoma patients and an SLL patient. Likewise, enrollment and dosing of patients in the AML trial now has been completed. In this trial, AML patients received the original G1 formulation across dose levels ranging from 450 to 900 milligrams BID. Bone marrow blast reductions were observed 38% of the evaluable FLT3 mutated patients, and 50% of the evaluable FLT3 wild-type AML patients. In addition, an MRD-CR, or complete response, in one reslaps refractor AML patient occurred with a 450 mg BID dosing of the original G1 formulation. Our clinical data demonstrate that LUX is active in AML patients and in B-cell cancer patients, but we were not consistently achieving the desired exposure levels to drive consistent responses. Because absorption of the original G1 formulation hampered the effectiveness of Luxethinib, a new Generation 3, or G3, formulation was developed. And now we can report that the clinical evaluation of the G3 formulation also has been completed. First, the G3 formulation was tested in a single-dose bioavailability study in 20 patients. including both B-cell cancer and AML patients, and across five different dose levels, from 10 milligrams to 200 milligrams. The G3 formulation was then evaluated in relapsed refractory AML patients with continuous dosing using two different dose levels, 50 milligrams BID and 200 milligrams BID, in a total of 11 patients. Recent data show the G3 formulation dosed at 200 milligrams twice daily can achieve two to three macromolar steady-state plasma levels with approximately tenfold better absorption and, interestingly, even better tolerability than the original G1 formulation. This means the G3 formulation achieved our desired plasma exposure benchmark and that the G3 formulation will be the formulation of choice for future studies with LUX. Collectively, these findings demonstrate LUX is a viable drug with a viable formulation, and that LUX as the G3 formulation should be advanced into a focused clinical development program, and we are delighted to see a future for LUX. Regarding any next steps with LUX, we are exploring the potential to advance LUX to treat molecularly defined relapsed refractory hemologic malignancy patient populations of high MET needs, and we now are seeking alternative development paths and collaborations to execute that strategy. 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 data and clinical plans for TUSBETNM. Raf?
spk06: Thanks, Bill, and good morning from Japan. As Bill mentioned, combination therapy is becoming more and more common for the treatment of newly diagnosed AML patients. Patients have been tested as triplets with the standard of care backbone of venetoclax with a hypermethylating agent in older patients who are ineligible to receive intensive chemotherapy. There have been promising proof-of-principle successes in treating patients with triplet therapies that include kinase inhibitors like despetinib. In fact, our lead investigator, Dr. Naval Dauber, and his team at the MD Anderson Cancer Center have seen impressive response rates nearing 100% with this approach in certain AML populations. However, these types of triplet therapies to date are complicated by increased toxicity that require reducing the dose and intensity of each agent and the use of pure FLT3 inhibitors that have been limited only to FLT3-mutated AML, which accounts for just 30% of the population. But with this paradigm shift, many companies are now expanding their clinical development plans to test their drugs in this type of triplet combination protocol. We've maintained from the start of its development that Tospenib appears to be an ideal candidate for triplet combination therapy, and our experience to date continues to build and support this strategy. As Bill mentioned, we've taken a deliberate and tiered clinical approach. First, we successfully demonstrated significant activity of TUS in a single-agent dose escalation exploration trial in a broad relapse refractory AML population. We completed dose escalation, exploration, and expansion studies with 93 patients treated with TUS dosed once daily for 28 days without interruption. Anti-leukemic activity that included durable objective clinical responses was observed at four active dose levels, all of which were taught well-tolerated with no dose-limiting toxicities in over 70 treated patients. At the 80-milligram dose in the then-naive patient population, to spend it had an excellent CR-CRH rate, 50%, 36%, 25% in FLT3 mutants, overall FLT3 wild-type, overall and in FLT3 wild-type respectively. Importantly, Tests demonstrated an excellent safety profile with no instances of drug-related QTC prolongation, differentiation syndrome, or muscle damage in any patient or prolonged myosuppression in responding patients who had cleared their leukemia. As Bill mentioned, we observed broad activity across AML populations at four dose levels. This included patients with adverse genetic alterations in FLT3, RAS, DMT3A, IDH genes, MPM1 genes, MLL-PTD, and others. Then, in conjunction with the FDA, 80 milligrams once daily was selected as the recommended Phase II dose for single-agent therapy. As AML care has shifted toward venetoclax-containing combination regimens, we began to find in our single-agent patients more challenging to treat relapsed refractory AML population than those patients who had received and failed venetoclax. This emerging patient population now accounts for a large percentage of relapsed refractory patients entering all AML trials. something we all developing these trials need to consider as then failure patients are more resistant to subsequent to treat very ill prior then treated AML population which led us to conduct APTIVATE, our TUS-VEN doublet study in renal suffractory AML. We initiated APTIVATE as a doublet study of TUS-VEN to explore the ability of TUS to treat these VEN fatal patients. We completed death exploration with 40 milligrams and then 80 milligrams with 79 patients. The TUS-VEN doublet treatment was well-tolerated with no drug-related deaths and lower rates of fibromyalgia than observed in other VEN combination studies. Response activity of 80 mg TUS and 400 mg VEN was broad-based and was observed in patients with and without a history of venetoclax treatment and in patients with and without FLT3 mutations. Importantly, we observed a dose-response relationship, such that patients receiving 40 mg of tispetinib with venetoclax achieved bone marrow blast reductions but did not achieve formal responses in large numbers. In contrast, many of the patients who received 80 mg of tispetinib with venetoclax did achieve both bone marrow blast and died formal responses. This, combined with a clean safety profile, tells us that we should explore even higher TUS-VEN dose levels in combination with phenetoclax to achieve even greater response rate and more durable responses in this growing and exceedingly difficult-to-treat patient population. Overall, in AFTIVATE, TUS-VEN demonstrated potent activity across subgroups with adverse mutations, achieving responses broadly in AML with a variety of adverse venic mutations, and TUS-VEN has a favorable safety and tolerability profile. Tospetinib also is convenient as a once-daily oral tablet and mechanistically targets the venetoclax resistance mechanisms. This makes Tospetinib an even better drug for therapy, where we're now rapidly heading. All of these data from the TUS single-agent and TUS-Ven doublet studies have led us into a Tospetinib-venetoclax azacitidine triplet pilot study in frontline, newly diagnosed AML patients ineligible for intensive chemotherapy, with the goal of becoming the standard of elation. After discussions with our scientific advisors and potential partners, we are prioritizing this study, and our clinical team is active in planning to begin the study within the first half of this year. The high level of interest in seeing TUS developed as frontline therapies, not only because of its safety and combinability, but the fact that it has demonstrated activity in FLT3-mutated and FLT3 wild-type or unmutated AML, differentiating it from many of the other compounds being developed, by targeting the vast spectrum of AML and not just a narrow target or subset of that group. Our triplet pilot study is being designed as an all-comers trial, and it's designed to combine with standard-of-care ven-HMA and to select the optimal TUS-ven-ASA dose to enable further randomized double-blinded clinical studies. We plan to initiate this triplet pilot in frontline newly diagnosed AML patients during the first half of 2024. and expect to see initial findings by ASH in 2024. We plan to follow these patients to assess overall survival. While HMA-VEN demonstrated a median overall survival of about 14.7 months, not all treated patients benefited equally. Patients with growth factor signaling mutations, such as those in FLT3 ITD, NRAS, and KRAS, had more modest survival, and those with TP53 mutations seemed to not benefit from the doublet over AZA alone And based on TUSPETINib's mechanism of action, we would hope to see deeper, more durable responses compared to patients receiving the current NHMA standard of care alone, particularly in a subset of patients with these resistance-type mutations. As standard of care for frontline AML patients unfit for chemotherapy, the potential impact for TUSPETINib is tremendous, addressing a market in excess of $1 billion. We expect that the pilot data could support launching TUSPEN HMA registrational programs in 2025. Meanwhile, as resources allow, and at the encouragement of KOLs, a second priority is to develop to spend the TUSFEN doublet for relapsed refractory first salvage FLT3 mutant AML. We saw the greatest response rates to the TUSFEN doublet in the AML population with FLT3 mutations, even if they had been previously treated with a FLT3 inhibitor. We can envision an approach wherein relapsing AML patients with FLT3 mutations are treated with the TUSFEN doublet and compared to those treated with the current approved standard, a single-agent kilteritinib. This is an avenue that several KOLs would like us to consider, as the current standard of care benefits a minority of treated patients and leaves patients in need of more likely and more durable responses. This is a study we hope to be able to initiate later this year, if resources allow. Let me now leave you with a quick summary of why we believe suspetinib can be the best agent to combine with Ben HMA. and why the TUS-VEN-ASA triplet can become the standard of care for frontline newly diagnosed AML patients. TUS has an excellent safety profile without concerns for drug-related QTC prolongation, differentiation syndrome, damage, or prolonged myelosuppression once patients achieve remission. TUS also has broader activity that includes FLIT3 mutant and FLIT3 unmutated patients compared with other competitor kinase inhibitors, and it is active in patients with a diversity of other adverse mutations. TUS has an extended patent coverage that goes well beyond that, and TUS has the potential for premium pricing. Finally, it's looking more unlikely that approved kinase inhibitors will enter pivotal frontline studies with VenHMA. TUS-VenHMA triplet therapy could serve as an off-the-shelf mutation-agnostic triplet, allowing for rapid deployment as physicians will not need to find agnostic assays or delay therapy while they identify target mutation profiles before putting patients on treatment. So we believe that TUS, Venn, HMA can clearly fill the sizable gaps left by competitors and even combine further with future complementary targeted agents. Now I'd like to turn the call over to our CFO and Chief Business Officer, Mr. Fletcher Payne, for an update on our financial status. Fletcher?
spk09: Thanks, Raf, and good afternoon, all. I'd like to start by saying in addition to the comments in this call, additional information may be found in today's press release and the 10-K file with the SEC. During 2023, we continued our disciplined financial management of operation. We reduced expenditures on a number of different fronts and prioritized investments in our clinical programs. As always, we continue to evaluate ways to reuse operational expenses. Also during the year, we used the ATM facility and our 2023 committed equity facility and ended into agreement with Harmony Pharmaceuticals to raise a total of $7.3 million of additional capital. This past January, just two months ago, we announced the closing of a $9.7 million public financing, including the full exercise of the over-allotment option, and a separate strategic investment of $4 million in a private placement with farming pharmaceuticals. The gross proceeds from the public offering and the private placement were approximately $13.7 million, excluding underwriters discounts, placement agent commissions, and other offering-related expenses. The total number of common shares outstanding after the closing of the public offering and the private placement, including the overall allotment, is 15,706,810, and the warrants outstanding are 8,332,163 warrants. Based on current operations, The company expects the cash on hand plus our ATM and committed equity facility will provide the company with sufficient resources to fund planned operations, including research and development, through August of 2024. Now, you're probably aware that on February 29th, we received a letter from NASDAQ claiming that in the January 2024 private placement of securities to Hanmei violated Rule 5635D. of the NASDAQ listing rules because we did not obtain shareholder approval prior to such issuance. NASDAQ stated that HOMI's private placement involved the issuance of greater than 20% of our issued and outstanding common shares with the assumption that it closed on the same date as our public offering. We believe the HOMI private placement was completed in accordance with the NASDAQ listing rules as it was a separate issue with different deal terms and closed on a different date. The deficiency letter has no immediate effect on listing of our common shares. In accordance with the NASDAQ listing rules, we are given 45 calendar days or until April 14th of 2024 to submit a plan to regain compliance. If NASDAQ accepts the plan, NASDAQ can grant an extension of 180 calendar days from the date of the deficiency letter of evidence of compliance. We respect NASDAQ's query. or working with NASDAQ resolve their concerns and consider available options to regain compliance. I'd like to direct you to review the company's risk factors and the discussions regarding the NASDAQ letter and our going concern footnote in our 10-K filing. Now let's review the year-end 2023 financials. We ended the fiscal year of 2023 with approximately $9.3 million in cash, cash equivalents, and investments. That is a decrease of $27.7 million as compared to December 31 of 2022. The $27.7 million decrease in our cash investments is a result of use of funds for the ACTIVATE study and operating expenses, which is offset by an increase in cash from certain financing activities. On a cumulative basis through December 31 of 2023, the company had raised raised a total of $7.3 million, $3 million from Harmony subscription, $1.9 million in gross proceeds from the 2022 ATM facility, and $2.1 million in gross proceeds from the committed equity facility. After the gross proceeds from the January 2024 financing of $13.7 million, the cash, cash equivalents, was $18.6 million. That's an unaudited result. As seen in the income statement, we had no revenues during 2023. During 2023, the net loss was approximately $51.2 million, translating into approximately $7.58 loss per share, compared to $41.8 million loss and $6.80 loss per share from the 2022 annual period. As of March 26, 2024, Aptos has 15,717,701 common shares outstanding. All references to the losses per share and the shares outstanding ever presented to reflect the one for 15 reverse stock split completed on June 6th of 2024. Due to our continuous strategic relationship with Harmony, we are now separately reporting related party R&D from our normal R&D expenses. Related party R&D expenses from the hominy relationship were $3.5 million for the year end 2023, compared to $3.6 million for the same period in 2022. The remaining research and development expenses were approximately $33.3 million for the year ended December 31, 2023, compared to $24.5 million during the year ended December of 2022. Program costs for test-substantive were $24.9 million for the 12 months ended December 31, 2023, compared to $10 million for the 12 months ended December 31, 2022. The higher program costs for test-substantive in the current period represent the enrollment of patients in our ACTIV-8 clinical trial, clinical materials, and the Healthy Volunteer and other expenses related to the FWV and the program. Program costs for leucobinib were $3.5 million for the 12 months ended December 31, 2023, and decreased by approximately $4.9 million compared to the $8.4 million for the 12 months ended December 31, 2022. primarily due to lower clinical trial costs, lower manufacturing costs as a result of the current G3 formulation, which requires less API than the prior formulations. G&A expenses were $15.6 million for the year into December 31st, 2003, compared to $14.5 million for the same period of 2022. The increase is primarily due to increased salaries, expense, higher professional fees, and partially offset by lower stock-based compensation. Now let me turn it back to Dr. Rice.
spk13: Thank you, Fletcher. Now we'll open up the call for questions, and please feel free to pose a question to any of us.
spk16: Operator, if you could, please introduce the questions.
spk10: Certainly, and as a reminder, ladies and gentlemen, if you do have a question, please press star 1-1 on your telephone. And our first question comes from the line of Shumit Roy from Jones Research. Your question, please. Good afternoon, everyone.
spk08: So as I'm trying to understand the strategic path forward, the development of tasks in relapsed refractory AML is on pause, and we are going to see the latest updated data at EHA. Is that correct?
spk16: It is. Currently, we've been treating patients, the relapsed refractory patients. We've completed the enrollment of the patients in both single agent and doublet in the relapsed refractory. And we don't plan on putting any more patients on there immediately because our top priority is to put all of our cash and resources into that triplet trial. If additional resources become available, we will move it into the doublet trial in which we increase the dose of Tospetinib in the relapsed refractory patients. And yes, we will be presenting the single agent and doublet data in relapsed refractory patients at the EHA conference in June.
spk15: Dr. Behar, did you want to add anything to that?
spk06: No, Bill, I think that's accurate. The goal will be to dose escalate in the doublet, as we had a very clean safety profile at the doses that we tested already. But as Bill mentioned, that will depend on additional resources.
spk08: So the strategy to move, to put the entire resources towards the front line, because front line is going to be a much longer trial, it has to be randomized. It's a full phase three trial versus we were expecting the relapsed refractory setting could have a potential path for approval. Do you think it's just the clinical benefit you are seeing and even if you dose escalate, the clinical benefit might not be significant enough to go for the exosurface?
spk14: Well, I wouldn't view this as a negative by any means. So in the relapsed refractory setting, we saw a dose-dependent effect, 40 milligrams in combination with venetoclax.
spk16: We saw activity, but not as extensive. As we went up to the 80 milligrams, much more extensive responses in patients. And the good news is we're able to dose escalate even further, we believe, in combination with Tuspatinib, whereas other drugs you tend to have to dose reduce. So we believe we can get an even higher response rate, greater durability in the real after factory population. And you're right, if we were to move forward there, the next step would be in a potential accelerated approval development path, and that also would be in a randomized trial. But we believe the greatest value in the near term is in this pilot triplet study frontline. Because Tospetinib really differentiates itself. It's very safe when it's combined with the other drugs. It has very broad activity. And this is what's needed in the frontline therapy, the triplet. And we hear that from all potential partners as well as the KOLs in AML. Dr. Bayhart, want to add anything?
spk06: No, Bill, I think it's exactly accurate. I think that we are excited about the idea of being able to treat these relapsed refractory AML patients and to pursue that avenue. But when we think about prioritization, about not just likelihood of success, but also scope of market and potential patient benefit, it is substantially greater in the frontline setting.
spk16: And much of that is very much driven by what we're hearing from potential partners as to the data that would drive major partnerships.
spk08: Anything else? In the frontline setting, are you going to put any inclusion criteria or select for FLT3 or P53 mutant patients which are a little harder to treat? And does the mechanism allow to combine with 7 plus 3 regimen also, or is it going to be restricted to HMA when only?
spk06: These are great questions. Quite a bit. Right now, the focus is on those older individuals that are ineligible for induction chemotherapy, and we would want to include patients with and without FLT3 mutations, but we know that there are other triplet studies that are going to be out in the world. We don't want those patients who could not qualify for those studies. We want to see the broad range of AML. So we would include patients that have TP53 mutations, but we would limit their fraction to be representative of what we see in the AML population, which are about 20% to 25% of those individuals. So we don't do a trial exclusively in that patient population. And then your question about combining with 7 plus 3, I think that would be very doable for a test about that. It would be a great way to go. There's two reasons that we've deprioritized that at the moment, and one of which is I think that low-intensity treatment with venetoclax and a hypomethenic agent containing regimens is becoming more common, even in individuals who might be able to give chemotherapy to, but you can achieve perhaps similar, if not better, response rates and duration of response even without giving chemotherapy, by giving a low-intensity therapy. And finally, there already are approved agents in the kinase inhibitor realm in that chemotherapy combination regimen, quisartanib, of course, and mitostaurin. And while those studies were approved, against a non-targeting kinase-containing regimen, we would have to pursue a registrational strategy against a kinase-containing regimen. So for these reasons, we think that there is a greater viability for going after the chemo-ineligible population first, but we would certainly love to explore combining with chemotherapy as well.
spk16: Yeah, as we look into the, thank you, Dr. Behar, as we look into the future, we likely will see the triplet combination of targeted agents showing much better, much higher response rates, much greater durability. That's the hope for all of the triplets in the patients who are ineligible for chemotherapy. And then once that is proven, we would expect that those triplets would also move over to the patients who are chemo-eligible. So we would expect that these triplets of targeted agents would then go across both the fit and unfit patients for chemotherapy.
spk08: Got it. And one last question. So in terms of data readout from the frontline setting, we expect safety readout only towards the end of this year and efficacy readout is likely to be the end of 25. Is that the right assumption?
spk16: I'll jump in on first, and then Dr. Behar can come in. So ultimately, you want to see that you have an extended overall survival of these patients, median overall survival. You would expect that to be much longer with the triplet. So by the end of this year, we won't have a full duration of median overall survival, but we should be able to see the CRCRH rates during that period of time, the safety profile, and possibly MRD negativity. Because in these patients with the triplet, you tend to see the responses very quickly in these patients. And then you want to be able to see that you're also recovering the counts. Perhaps Dr. Behar wants to add to that.
spk06: That's exactly right. I think we will have early indications of activity at other studies that have been done With a combination of HMA-VEN and a kinase inhibitor, for example, the vast majority of responses occurred within the first or second cycle, suggesting that even if we had a handful of patients put on in the first portion of the year, that we would have enough follow-up data to see what their likely response rates are. Now, fortunately, it takes longer to get survival in this patient population because they do live longer, and we would hope to have more of that data in 2025.
spk16: And we hope to be able to have multiple dose levels of Tusbetanib combined into the triplet. We would hope to start out around 80 milligrams if possible. And then if that's safe, we'd look to move up. Again, with most other drugs, when you combine with the Ben HMA, you have to do dose reductions, both that molecule as well as the Ben HMA. We hope we will not have that issue. We expect that we'll be able to dose the 80 milligrams and to maintain
spk13: the label dosing for the Ben HMA. So that's the plan.
spk07: Thank you again for taking all the questions and congrats on all the progress.
spk10: Thank you, Schmidt. Appreciate you coming on. Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Dr. Rice for any further remarks.
spk16: All right. We'd like to thank everyone for joining us this afternoon. As I mentioned earlier, our KOLs believe testophenamine is a real drug that's demonstrated activity across a breadth of genetic subtypes in AML, yet has a surprisingly favorable tolerability profile with no significant safety signals, and these are true differentiators. We're eager to initiate this triplet study with TUS-Betinib, which we believe can be the ideal candidate for triplet combination therapy in the rapidly shifting AML treatment landscape. As always, we thank our patients, our investigators, and our employees for their important role in this effort. We appreciate our shareholders and analysts who continue to support us, and we look forward to keeping you updated on our progress. Thank you, and have a wonderful evening.
spk10: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day. Thank you. Hello. Thank you. Thank you.
spk00: Thank you.
spk10: Good afternoon. My name is Jonathan, and I will be your conference operator today. I would like to welcome everyone to Aptos Biosciences conference call for the fourth quarter and year ended December 31st, 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 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. And now I'd like to introduce your host for today's program, Susan Pietropalo. Please go ahead.
spk12: Thank you, Jonathan. Good afternoon and welcome to the Aptos Biosciences Conference call to discuss financial and operational results for the fourth quarter and year ended December 31st, 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 APT House's 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, Chief Financial Officer, and Chief Business Officer. Before we proceed, I would like to remind everyone that certain statements made during this call will include forward-looking statements within the meeting 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 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. We encourage you to refer to today's press release and the 10-K for additional information and disclosures regarding today's announcements. I will now turn the call over to Dr. Rice.
spk16: Thank you, Susan. I want to welcome everyone to our call for the fourth quarter and year-ended December 31st, 2023. Today, we will provide updates on our financial status, on the near-term and long-term clinical development plan for our lead agent, Tospetinib, and a quick update on our Luxeptinib program. From a financial perspective, during 2023, we financed corporate activities with cash gleaned from our ATM facility, from a committed equity facility, and through a strategic investment by our partner, Hanmi Pharmaceutical. Then in January of this year, we closed financing with gross proceeds of $13.7 million, inclusive of a $9.7 million public offering, along with a separate $4 million private placement with Hanmi Pharmaceuticals. This provided us with more breathing room, and Mr. Fletcher Payne, our CFO and CBO, provide additional financial details in a few minutes. I now want to pivot to our lead program, Tuspitinib. So why should you care about Tuspitinib? It's because tusfetinib, or TUS as we often call it, is a convenient, orally administered, once-daily kinase inhibitor with an excellent safety profile and potent antileukemic activity that is being developed for the treatment of acute myeloid leukemia, or AML. And we believe a tusfetinib-containing triplet regimen can become a new standard of care for the frontline treatment of newly diagnosed AML patients across the broadest set of genetic subtypes. And today, we'll explain why we believe this and how we arrived at this point. First, you're aware that we've been performing studies in relapsed or refractory AML patients with tuspetinib as a single agent and with tuspetinib in combination with venetoclax, which we refer to as the tusbendublet. The valuable findings gleaned from these studies have now led us to pursue the development of tuspetinib as a triplet combination therapy for the frontline treatment of newly diagnosed AML patients as the highest priority. The triplet includes TUS-Betanib, the BCL-2 inhibitor Venetoclax, and a Haka-methylating agent, such as Asosatidate, collectively referred to as the TUS-Ven HMA triplet. In fact, we just heard from a group of KOLs in AML that they have great enthusiasm for the safety and activity of TUS-Betanib, and they believe this is a real drug with the potential to go all the way. These KOLs and our internal team all agree that the immediate focus of TUSBEN should be primarily on the TUSBEN HMA triplet. And that is precisely where we're focusing our resources. Because this TUSBEN HMA triplet has the potential to deliver the greatest patient impact, the greatest commercial impact, and the greatest return to our investors. At the patient level, we believe TUSBEN can have its greatest impact and frontline AML by improving the response rates, the depths of responses, the durability of responses, the quality of life, and the long-term survival across the diversity of AML patients relative to the current Venn HMA standard of care and frontline AML patients who are ineligible for intensive chemotherapy. Plus, the commercial aspect or impact of the TUS-Venn HMA triplet and frontline therapy is estimated to exceed $1 billion annually. And we've heard from many potential partners that the application of the TUSBEN HMA to the frontline market is of primary interest to them. Indeed, the safety, breadth, and efficacy profiles of TUSBEN today make us believe that TUSBEN can be the best agent to combine with the BEN HMA, which is the current standard of care. While the goal for the TUSBETNIV program is to move into frontline AML therapy at the triplet, the path to the frontline triplet began with the TUSBETNIV single-agent trial and then transitioned through the TUSBEN doublet trial to understand activities, safety, and contribution of components. With the TUSBETNIV single-agent trial, we completed enrollment of 93 patients across six dose levels. TUSBETNIV single-agent achieved an excellent safety profile without many of the key liabilities seen in competitor agents. It demonstrated broad activity across AML populations with adverse genetic alterations. We observed a three-fold longer median overall survival in responding patients relative to non-responders. And 80 milligrams once daily was selected as the recommended phase two dose for single agent therapy. With the 80 milligram dose level, Tuspatinib single agent was highly active achieving high quality responses with high response rates. We were delighted to see a strong 36% CRCRH rate among all Cumber genotypes in patients who had not previously been treated with venetoclax, referred to as then-naive patients. Notably, at the 80 milligram dose level, few of the patients had failed prior therapy with venetoclax. However, as we dose escalated above the 80 milligram dose level, we saw that prior VIN failure patients were emerging as a new category of relapsed refractory AML at that point in time. And the proportion of prior VIN patients increased dramatically to greater than 80% in the next dose level of 120 milligrams. Once patients fell of venetoclax-containing therapy, they're more refractory to all subsequent salvage therapies, including Tuspitinib as a single agent. And this led to lower response rates in the 120 milligram dose level and then in the 160-milligram dose level. Fortunately, there is a silver lining to this change in the relapsed refractory AML patient population. In our past scientific conference presentation, we've described how tuspetinib targets the venetoclax resistance mechanism and how tuspetinib can combine synergistically with venetoclax in animal models. Plus, we've shown that tuspetinib-resistant AML cells are hypersensitive. 2,000-fold more sensitive to venetoclax. This mechanistic complementarity provided a rationale for us to combine tuspetinib with venetoclax to evaluate the TUSPEN doublet and the relapsed refractory AML population. In our TUSPEN doublet trial, we now have completed enrollment with 40 mg tuspetinib and with 80 mg tuspetinib combined with 400 mg venetoclax in a total of 79 patients. First, we observed that the excellent safety profile of Tuspetinib as a single agent was maintained with the Tusven doublet. We observed bone marrow leukemic blast reductions in the majority of patients, including those who failed prior therapies with FLT3 inhibitors or prior venetoclax therapy. And we continued to see evidence of broad activity across AML patients with a diversity of adverse mutations, including patients who had failed prior therapy with venetoclax. We see great promise for the TUSPEN doublet to effectively treat the prior Venn failure patients and even become a standard of care for those patients. And there remains a potential accelerated approval path for the TUSPEN doublet in a molecularly defined subpopulation of relapsed refractory AML, especially if we increase the dosage of TUSPEN and the TUSPEN doublet and demonstrate even greater activity. This has been a source of high interest for KOLs, collaborators, and certain potential partners. And as resources become available, we would like to pursue the TUSBEN doublet with higher doses of TUSBEN for the relapsed refractory population. However, in the near term, we have chosen to focus our resources on the TUSBEN HMA triplet and frontline AML therapy. So our next step to build value as quickly as possible will be to initiate a TUSBEN plus venetoclax plus azacitidine triplet pilot study in frontline newly diagnosed AML patients, and to select the optimal triplet dosage of Tuspatinib, which will be driven by CR, CRH rate, MRD negativity, and safety data. After selecting appropriate phase two doses of the triplet, we plan to transition into registrational studies that compare the safety and efficacy of the triplet to the then HMA control for frontline newly diagnosed AML patients. I also want to mention that our ongoing BD conversations with a number of large pharma companies emphasize a need for the AML therapeutic paradigm to focus on creating more effective, more durable, broader acting, and less toxic frontline cocktails of targeted agents for AML patients. And they point to the frontline triplet therapy as the cornerstone of a commercial success. It's clear that we can create the greatest value for Tuspatinib and the shortest period of time earned for the least amount of capital by performing a TUS-BEN HMA triplet pilot study in frontline AML patients, and such data can then support partnerships for later stage development of TUS-BEN. So this provides you with a framework of our strategic thought process, and Dr. Behar, our chief medical officer, will provide you with additional clinical insights in perspectives in a few minutes. But first, I also want to mention our other drug, Luxeptinib. You will recall that LUX, as we often call it, is an oral highly potent kinase inhibitor that selectively targets defined kinases operative in myeloid and lymphoid hematologic malignancies. This molecule has been evaluated in a Phase I AB study for the treatment of patients having relapsed to refractory B-cell leukemias and lymphomas, and in a Phase I AB study for the treatment of patients with relapsed to refractory AML. Enrollment and in dosing of patients in the B-cell malignancy trial has now been completed, including 36 patients who were dosed with the original G1 formulation across five dose levels ranging from 150 milligrams to 900 milligrams BID. In this trial, LUX achieved tumor shrinkage among 63% of the available B-cell cancer patients and across dose levels from 450 to 900 milligrams. This also includes a complete response, or CR, in a DLBCL patient and impressive tumor reductions in follicular lymphoma patients and an SLL patient. Likewise, enrollment and dosing of patients in the AML trial now has been completed. In this trial, AML patients received the original G1 formulation across dose levels ranging from 450 to 900 milligrams BID. Bone marrow blast reductions were observed 38% of the evaluable FLT3 mutated patients, and 50% of the evaluable FLT3 wild-type AML patients. In addition, an MRD-CR, or complete response, in one reslapsed refractory AML patient occurred with a 450 mg BID dosing of the original G1 formulation. Our clinical data demonstrate that LUX is active in AML patients and in B-cell cancer patients but we were not consistently achieving the desired exposure levels to drive consistent responses. Because absorption of the original G1 formulation hampered the effectiveness of LUXF-mitted, a new generation 3 or G3 formulation was developed. And now we can report that the clinical evaluation of the G3 formulation also has been completed. First, the G3 formulation was tested in a single-dose bioavailability study in 20 patients. including both B-cell cancer and AML patients, and across five different dose levels, from 10 milligrams to 200 milligrams. The G3 formulation was then evaluated in relapsed refractory AML patients with continuous dosing using two different dose levels, 50 milligrams BID and 200 milligrams BID, in a total of 11 patients. Recent data showed the G3 formulation dosed at 200 milligrams twice daily can achieve two to three macromolar steady-state plasma levels with approximately tenfold better absorption and, interestingly, even better tolerability than the original G1 formulation. This means the G3 formulation achieved our desired plasma exposure benchmark and that the G3 formulation will be the formulation of choice for future studies with LUX. Collectively, these findings demonstrate LUX is a viable drug with a viable formulation, and that LUX as the G3 formulation should be advanced into a focused clinical development program, and we are delighted to see a future for LUX. Regarding any next steps with LUX, we are exploring the potential to advance LUX to treat molecularly defined relapsed refractory hemologic malignancy patient populations of high MET needs, and we now are seeking alternative development paths and collaborations to execute that strategy. 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 data and clinical plans for TUSBETNM. Raf?
spk06: Thanks, Bill, and good morning from Japan. As Bill mentioned, combination therapy is becoming more and more common for the treatment of newly diagnosed AML patients. Patients have been tested as triplets with the standard of care backbone of venetoclax with a hypermethylating agent in older patients who are ineligible to receive intensive chemotherapy. There have been promising proof-of-principle successes in treating patients with triplet therapies that include kinase inhibitors like despetinib. In fact, our lead investigator, Dr. Naval Dauber, and his team at the MD Anderson Cancer Center have seen impressive response rates nearing 100% with this approach in certain AML populations. However, these types of triplet therapies to date are complicated by increased toxicity that require reducing the dose and intensity of each agent and the use of pure FLT3 inhibitors that have been limited only to FLT3-mutated AML, which accounts for just 30% of the population. But with this paradigm shift, many companies are now expanding their clinical development plans to test their drugs in this type of triplet combination protocol. We've maintained from the start of its development that Tospenib appears to be an ideal candidate for triplet combination therapy, and our experience to date continues to build and support this strategy. As Bill mentioned, we've taken a deliberate and tiered clinical approach. First, we successfully demonstrated significant activity of TUS in a single-agent dose escalation exploration trial in a broad relapsed refractory AML population. We completed dose escalation exploration and expansion studies with 93 patients treated with TUS dosed once daily for 28 days without interruption. Anti-leukemic activity that included durable objective clinical responses was observed at four active dose levels, all of which were taught well-tolerated with no dose-limiting toxicities in over 70 treated patients. At the 80-milligram dose in the then-naive patient population, Tospadnip had an excellent CR-CRH rate, 50%, 36%, 25% in FLT3 mutants, overall FLT3 wild-type, overall and in FLT3 wild-type respectively. Importantly, Tests demonstrated an excellent safety profile with no instances of drug-related QTC prolongation, differentiation syndrome, or muscle damage in any patient or prolonged myosuppression in responding patients who had cleared their leukemia. As Bill mentioned, we observed broad activity across AML populations at four dose levels. This included patients with adverse genetic alterations in FLT3, RAS, DMT3A, IDH genes, MPM1 genes, MLL-PTD, and others. Then, in conjunction with the FDA, 80 milligrams once daily was selected as the recommended Phase II dose for single-agent therapy. As AML care has shifted toward venetoclax-containing combination regimens, we began to find in our single-agent patients more challenging to treat relapsed refractory AML population than those patients who had received and failed venetoclax. This emerging patient population now accounts for a large percentage of relapsed refractory patients entering all AML trials. something we all developing these trials need to consider as Venn failure patients are more resistant to subsequent to treat very ill prior Venn treated AML population which led us to conduct APTIVATE, our TUS-VEN doublet study in renal suffractory AML. We initiated APTIVATE as a doublet study of TUS-VEN to explore the ability of TUS to treat these VEN-failed patients. We completed dose exploration with 40 milligrams and then 80 milligrams with 79 patients. The TUS-VEN doublet treatment was well-tolerated with no drug-related deaths and lower rates of fibromyalgia than observed in other VEN combination studies. Response activity of 80 mg TUS and 400 mg VEN was broad-based and was observed in patients with and without a history of venetoclax treatment and in patients with and without FLT3 mutations. Importantly, we observed a dose-response relationship such that patients receiving 40 mg of despatinib with venetoclax achieved bone marrow blast reductions but did not achieve formal responses in large numbers. In contrast, many of the patients who received 80 mg of despatinib with venetoclax did achieve both bone marrow blasts and achieved formal responses This, combined with a clean safety profile, tells us that we should explore even higher TUS-VEN dose levels in combination with phenetoclax to achieve even greater response rate and more durable responses in this growing and exceedingly difficult-to-treat patient population. Overall, in AFTIVATE, TUS-VEN demonstrated potent activity across subgroups with adverse mutations, achieving responses broadly in AML with a variety of adverse semantic mutations, and TUS-VEN has a favorable safety and tolerability profile. Tospetinib also is convenient as a once-daily oral tablet and mechanistically targets the venetoclax resistance mechanisms. This makes Tospetinib an even better drug for therapy, where we're now rapidly heading. All of these data from the TUS single-agent and TUS-Ven doublet studies have led us into a Tospetinib-venetoclax azacitidine triplet pilot study in frontline, newly diagnosed AML patients ineligible for intensive chemotherapy, with the goal of becoming the top standard of elation. After discussions with our scientific advisors and potential partners, we are prioritizing this study, and our clinical team is active in planning to begin the study within the first half of this year. The high level of interest in seeing TUS developed as frontline therapies, not only because of its safety and combinability, but the fact that it has demonstrated activity in FLT3-mutated and FLT3 wild-type or unmutated AML, differentiating it from many of the other compounds being developed, by targeting the vast spectrum of AML and not just a narrow target or subset of that group. Our triplet pilot study is being designed as an all-comers trial, and it's designed to combine with standard-of-care ven-HMA and to select the optimal TUS-ven-ASA dose to enable further randomized double-blinded clinical studies. We plan to initiate this triplet pilot in frontline newly diagnosed AML patients during the first half of 2024. and expect to see initial findings by ASH in 2024. We plan to follow these patients to assess overall survival. While HMA-VEN demonstrated a median overall survival of about 14.7 months, not all treated patients benefited equally. Patients with growth factor signaling mutations, such as those in FLT3 ITD, NRAS, and KRAS, had more modest survival, and those with TP53 mutations seemed to not benefit from the doublet over-ASA alone And based on TUSPETINib's mechanism of action, we would hope to see deeper, more durable responses compared to patients receiving the current NHMA standard of care alone, particularly in a subset of patients with these resistance-type mutations. As standard of care for frontline AML patients unfit for chemotherapy, the potential impact for TUSPETINib is tremendous, addressing a market in excess of $1 billion. We expect that the pilot data could support launching TUSPEN HMA registrational programs in 2025. Meanwhile, as resources allow, and at the encouragement of KOLs, a second priority is to develop to spend in comics the TUSFEN doublet for relapsed refractory first salvage FLT3 mutant AML. We saw the greatest response rates to the TUSFEN doublet in the AML population with FLT3 mutations, even if they have been previously treated with a FLT3 inhibitor. We can envision an approach wherein relapsing AML patients with FLT3 mutations are treated with the TUSFEN doublet and compared to those treated with the current approved standard, a single-agent kilteritinib. This is an avenue that several KOLs would like us to consider, as the current standard of care benefits a minority of treated patients and leaves patients in need of more likely and more durable responses. This is a study we hope to be able to initiate later this year, if resources allow. Let me now leave you with a quick summary of why we believe suspetinib can be the best agent to combine with Ben-HMA. and why the TUS-VEN-ASA triplet can become the standard of care for frontline newly diagnosed AML patients. TUS has an excellent safety profile without concerns for drug-related QTC prolongation, differentiation syndrome, damage, or prolonged myelosuppression once patients achieve remission. TUS also has broader activity that includes FLIT3 mutant and FLIT3 unmutated patients compared with other competitor kinase inhibitors, and it is active in patients with a diversity of other adverse mutations. TUS has an extended patent coverage that goes well beyond that, and TUS has the potential for premium pricing. Finally, it's looking more unlikely that approved kinase inhibitors will enter pivotal frontline studies with VenHMA. TUS-VenHMA triplet therapy could serve as an off-the-shelf mutation-agnostic triplet, allowing for rapid deployment as physicians will not need to find agnostic assays or delay therapy while they identify target mutation profiles before putting patients on treatment. So we believe that TUS, Venn, HMA can clearly fill the sizable gaps left by competitors and even combine further with future complementary targeted agents. Now I'd like to turn the call over to our CFO and Chief Business Officer, Mr. Fletcher Payne, for an update on our financial status. Fletcher?
spk09: Thanks, Raf, and good afternoon, all. I'd like to start by saying in addition to the comments in this call, additional information may be found in today's press release and the 10-K filed with the SEC. During 2023, we continue our disciplined financial management of operation, reduce expenditures on a number of different fronts, and prioritize investments in our clinical programs. As always, we continue to evaluate ways to reduce operational expenses. Also during the year, we used the ATM facility and our 2023 committed equity facility and ended into agreement with Harmony Pharmaceuticals to raise a total of $7.3 million of additional capital. This past January, just two months ago, we announced the closing of a $9.7 million public financing, including the full exercise of the over-allotment option and a separate strategic investment of $4 million in a private placement with Humvee Pharmaceuticals. The gross proceeds from the public offering and the private placement were approximately $13.7 million, excluding underwriters discounts, placement agent commissions, and other offering-related expenses. The total number of common shares outstanding after the closing of the public offering and the private placement, including the overall allotment, is 15,706,810, and the warrants outstanding are 8,332,163 warrants. Based on current operations, The company expects the cash on hand plus our ATM and committed equity facility will provide the company with sufficient resources to fund planned operations, including research and development, through August of 2024. Now, you're probably aware that on February 29th, we received a letter from NASDAQ claiming that in the January 2024 private placement of securities to Hanmi violated Rule 5635D. of the NASDAQ listing rules because we did not obtain shareholder approval prior to such issuance. NASDAQ stated that HOMI's private placement involved the issuance of greater than 20% of our issued and outstanding common shares with the assumption that it closed on the same date as our public offering. We believe the HOMI private placement was completed in accordance with the NASDAQ listing rules as it was a separate issue with different deal terms and closed on a different date. The deficiency letter has no immediate effect on the listing of our common shares. In accordance with the NASDAQ listing rules, we are given 45 calendar days or until April 14th of 2024 to submit a plan to regain compliance. If NASDAQ accepts the plan, NASDAQ can grant an extension of 180 calendar days from the date of the deficiency letter of evidence of compliance. We respect NASDAQ's query. or working with NASDAQ resolve their concerns and consider available options to regain compliance. I'd like to direct you to review the company's risk factors and the discussions regarding the NASDAQ letter and our going concern footnote in our 10-K filing. Now let's review the year-end 2023 financials. We ended the fiscal year of 2023 with approximately $9.3 million in cash, cash equivalents, and investments. That is a decrease of $27.7 million as compared to December 31 of 2022. The $27.7 million decrease in our cash investments is a result of use of funds for the ACTIVATE study and operating expenses, which is offset by an increase in cash from certain financing activities. On a cumulative basis through December 31 of 2023, the company had raised raised a total of $7.3 million, $3 million from Harmony Subscription, $1.9 million in gross proceeds from the 2022 ATM facility, and $2.1 million in gross proceeds from the Committed Equity facility. After the gross proceeds from the January 2024 financing of $13.7 million, the cash, cash equivalents, was $18.6 million. That's an unaudited result. As seen in the income statement, we had no revenues during 2023. During 2023, the net loss was approximately $51.2 million, translating into approximately $7.58 loss per share, compared to $41.8 million loss and $6.80 loss per share from the 2022 annual period. As of March 26, 2024, APTOS has 15,717,701 common shares outstanding. All references to the losses per share and the shares outstanding ever presented to reflect the one for 15 reverse stock split completed on June 6th of 2024. Due to our continuous strategic relationship with HANMI, we are now separately reporting related party R&D from our normal R&D expenses. Related party R&D expenses from the HOMI relationship were $3.5 million for the year end 2023 compared to $3.6 million for the same period in 2022. The remaining research and development expenses were approximately $33.3 million for the year ended December 31, 2023 compared to $24.5 million during the year ended December of 2022. Program costs for test-substantive were $24.9 million for the 12 months ended December 31, 2023, compared to $10 million for the 12 months ended December 31, 2022. The higher program costs for test-substantive in the current period represent the enrollment of patients in our ACTIV-8 clinical trial, clinical materials, and the Healthy Volunteer and other expenses related to the F5A program. Program costs for logceptinib were $3.5 million for the 12 months ended December 31, 2023, and decreased by approximately $4.9 million compared to the $8.4 million for the 12 months ended December 31, 2022. primarily due to lower clinical trial costs, lower manufacturing costs as a result of the current G3 formulation, which requires less API than the prior formulations. G&A expenses were $15.6 million for the year into December 31st, 2003, compared to $14.5 million for the same period of 2022. The increase is primarily due to increased salaries, expense, higher professional fees, and partially offset by lower stock-based compensation. Now let me turn it back to Dr. Rice.
spk13: Thank you, Fletcher.
spk16: Now we'll open up the call for questions, and please feel free to pose a question to any of us. Operator, if you could, please introduce the questions.
spk10: Certainly, and as a reminder, ladies and gentlemen, if you do have a question, please press star 1-1 on your telephone. And our first question comes from the line of Shumit Roy from Jones Research. Your question, please. Good afternoon, everyone.
spk08: So as I'm trying to understand the strategic path forward, the development of tasks in relapsed refractory AML is on pause, and we are going to see the latest updated data at EHA. Is that correct?
spk16: It is. Currently, we've been treating patients, the relapsed refractory patients. We've completed the enrollment of the patients in both single agent and doublet in the relapsed refractory. And we don't plan on putting any more patients on there immediately because our top priority is to put all of our cash and resources into that triplet trial. If additional resources become available, we will move it into the doublet trial in which we increase the dose of Tospetinib in the relapsed refractory patients. And yes, we will be presenting the single agent and doublet data in relapsed refractory patients at the EHA conference in June.
spk15: Dr. Behar, did you want to add anything to that?
spk06: No, Bill. I think that's accurate. The goal will be to dose escalate in the doublet, as we had a very clean safety profile at the doses that we tested already. But as Bill mentioned, that will depend on additional resources.
spk08: So, the strategy to move, to put the entire resources towards the front line, because front line is going to be a much longer trial. It has to be randomized. It's a full phase trial versus we were expecting the relapsed refractory setting could have a potential path for approval. Do you think it's just the clinical benefit you are seeing and even if you dose escalate, the clinical benefit might not be significant enough to go for the exosurface?
spk14: Well, I wouldn't view this as a negative by any means. So in the relapsed refractory setting, we saw a dose-dependent effect, 40 milligrams in combination with venetoclax.
spk16: We saw activity, but not as extensive. As we went up to the 80 milligrams, much more extensive responses in patients. And the good news is we're able to dose escalate even further, we believe, in combination with Tuspatinib, whereas other drugs you tend to have to dose reduce. So we believe we can get an even higher response rate, greater durability in the real after factory population. And you're right, if we were to move forward there, the next step would be in a potential accelerated approval development path, and that also would be in a randomized trial. But we believe the greatest value in the near term It's in this pilot triplet study frontline because to spend it really differentiates itself. It's very safe when it's combined with the other drugs. It's very broad activity. And this is what's needed in the frontline therapy, the triplet. And we hear that from all potential partners as well as the KOLs in AML. Dr. Bayhart, want to add anything?
spk06: No, Bill, I think it's exactly accurate. I think that we are excited about the idea of being able to treat these relapsed refractory AML patients and to pursue that avenue. But when we think about prioritization, about not just likelihood of success, but also scope of market and potential patient benefit, it is substantially greater in the frontline setting.
spk16: And much of that is very much driven by what we're hearing from potential partners as to the data that would drive major partnerships.
spk08: Anything else? In the frontline setting, are you going to put any inclusion criteria or select perfectly three or three mutant patients which are a little harder to treat? And does the mechanism allow to combine with 7 plus 3 regimen also, or is it going to be restricted to HMA when only?
spk06: These are great questions. Quite a bit. Right now, the focus is on those older individuals that are ineligible for induction chemotherapy, and we would want to include patients with and without FLT3 mutations, but we know that there are other triplet studies that are going to be out in the world. So we don't want those patients who could not qualify for those studies. We want to see the broad range of AML. So we would include patients that have TP53 mutations, but we would limit their fraction to be representative of what we see in the AML population, which are about 20% to 25% of those individuals. So we don't do a trial exclusively in that patient population. And then your question about combining with 7 plus 3, I think that would be very doable for a test about that. It would be a great way to go. There's two reasons that we've deprioritized that at the moment, and one of which is I think that low-intensity treatment with venetoclax and hypomethenic agents containing regimens is becoming more common, even in individuals who might be able to give chemotherapy to, but you can achieve perhaps similar, if not better, response rates and duration of response even without giving chemotherapy, by giving a low-intensity therapy. And finally, there already are approved agents in the kinase inhibitor realm in that chemotherapy combination regimen, quisartanib, of course, and mitostaurin. And while those studies were approved, against a non-targeting kinase-containing regimen, we would have to pursue a registrational strategy against a kinase-containing regimen. So for these reasons, we think that there is a greater viability for going after the chemo-ineligible population first, but we would certainly love to explore combining with chemotherapy as well.
spk16: As we look into the future, we likely will see the triplet combination of targeted agents showing much better, much higher response rates, much greater durability. That's the hope for all of the triplets in the patients who are ineligible for chemotherapies. And then once that is proven, we would expect that those triplets would also move over to the patients who are chemo-eligible. So we would expect that these triplets of targeted agents would then go across both the fit and unfit patients for chemotherapy.
spk08: Got it. And one last question. So in terms of data readout from the frontline setting, we expect safety readout only towards the end of this year and efficacy readout is likely to be the end of 25. Is that the right assumption?
spk16: I'll jump in on first, then Dr. Behar can come in. So ultimately, you want to see that you have an extended overall survival of these patients, median overall survival. You would expect that to be much longer with the triplet. So by the end of this year, we won't have a full duration of median overall survivals. But we should be able to see the CRCRH rates during that period of time, the safety profile, and possibly MRD negativity. Because in these patients with the triplet, you tend to see the responses very quickly in these patients. And then you want to be able to see that you're also recovering the counts. Perhaps Dr. Behar wants to add to that.
spk06: That's exactly right. I think we will have early indications of activity at other studies that have been done With a combination of HMA-VEN and a kinase inhibitor, for example, the vast majority of responses occurred within the first or second cycle, suggesting that even if we had a handful of patients put on in the first portion of the year, that we would have enough follow-up data to see what their likely response rates are. Now, fortunately, it takes longer to get survival in this patient population because they do live longer, and we would hope to have more of that data in 2025.
spk16: And we hope to be able to have multiple dose levels of Tuspetinib combined into the triplet. We would hope to start out around 80 milligrams if possible. And then if that's safe, we'd look to move up. Again, with most other drugs, when you combine with the Ben HMA, you have to do dose reductions, both that molecule as well as the Ben HMA. We hope we will not have that issue. We expect that we'll be able to dose the 80 milligrams and to maintain the the label dosing for the Ben HMA.
spk13: So that's the plan.
spk07: Thank you again for taking all the questions, and congrats on all the progress.
spk13: Thank you, Schmidt.
spk10: Appreciate you coming on. Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Dr. Rice for any further remarks.
spk16: All right. We'd like to thank everyone for joining us this afternoon. As I mentioned earlier, our KOLs believe testophenamine is a real drug that's demonstrated activity across a breadth of genetic subtypes in AML, yet has a surprisingly favorable tolerability profile with no significant safety signals, and these are true differentiators. We're eager to initiate this triplet study with Tuspetinib, which we believe can be the ideal candidate for triplet combination therapy in the rapidly shifting AML treatment landscape. As always, we thank our patients, our investigators, and our employees for their important role in this effort. We appreciate our shareholders and analysts who continue to support us, and we look forward to keeping you updated on our progress. Thank you, and have a wonderful evening.
spk10: Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.
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