Moleculin Biotech, Inc.

Hello and welcome to the Moleculin Biotech Fiscal Year 2022 Quarterly Update Conference Call and Webcast. If anyone should require operator assistance, please press star zero on your telephone keypad. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Janine Thomas, Investor Relations. Please go ahead, Janine.

Thank you, Kevin. Hello and welcome to the Moleculin Biotech Quarterly Update Conference Call and Webcast. Following the presentation, there will be a question and answer session, and note that this webcast is being recorded at the company's request, and a replay will be made available on the company's website following the end of the event. At this time, I'd like to remind our listeners that remarks made during this webcast may state management's intentions, beliefs, expectations, or future projections. These are forward-looking statements and involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the safe harbor provisions of the federal securities laws and are based on Moleculin's current expectations, and actual results could differ materially. As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from these contemplated by such forward-looking statements are discussed in the periodic reports Moleculin files with the Securities and Exchange Commission. These documents are available in the investor section of the company's website and on the Securities and Exchange Commission's website. We encourage you to review these documents carefully. Additionally, certain information contained in this webcast relates to or is based on studies, publications, surveys, and other data obtained from third-party sources and the company's own estimates and research. While the company believes these third-party sources to be reliable as of the date of this presentation, It has not independently verified and makes no representation as to the adequacy, fairness, accuracy, or completeness of, or that any independent source has verified any information obtained from a third-party sources. So joining us on the call today is Moleculin's leadership team. We have Walter Klimt, Chairman and Chief Executive Officer, Dr. John Paul Wamek, Senior Chief Medical Officer, and Jonathan Foster, Executive Vice President and Chief Financial Officer. It is now my pleasure to turn the call over to Wally Klump, Chairman and CEO. Wally, please proceed.

Thanks, Janine. Hello, everyone, and again, welcome to today's Moleculin Biotech Earnings Call. As you would expect, we'll be updating you on financial aspects of the company, but the most important aspect of today's call will be an update on our key clinical programs. And in that regard, from this point forward our plan is to provide these clinical updates with each subsequent quarterly and year-end call and furthermore given the fact that our current clinical trials are open label we'll be free to provide substantive updates on preliminary readouts for safety and efficacy with with each one of these updates we're also really excited for Moleculent to finally be entering phase two activity. When we went public in 2016, we had zero clinical activity and really nothing more than a promising pipeline of preclinical technologies. But as of today, we've either concluded or conducting or cleared to begin 11 clinical trials involving three different technologies in a range of indications. What's more, we've successfully established safety and also witnessed clinical activity in three of these indications. Importantly, this is just in the phase one stages of our clinical programs. Now, without a doubt, the most immediate opportunity for a clinical breakthrough is with anamycin, largely because it's the farthest along in its clinical development. So with this in mind, we'll spend the bulk of this call talking about where we are and where we expect to be with Anamycin in the near future. But it is worth reminding investors that we have two more distinctly different technologies in addition to Anamycin, and those programs continue to progress and provide valuable diversification to your investment and multiple ways for Moleculin to succeed. Now, everything we've done up to and including in 2022 has essentially set the stage for a year of phase two clinical data in 2023. All this preparation is now finally culminating in phase two activity. In fact, we have three phase 1B2 clinical trials underway with anamycin. And one of our STS trials has already reached the 50% mark for recruitment of the phase two portion of that trial. And our AML clinical trial of anamycin in combination with cytarabine, well, that's building off of an 80% response rate in the single agent trial completed last year. Now, In just a little bit, our Senior Chief Medical Officer, Dr. Paul Weymack, will give you some more insights into these trials and more. But before he does, I'd just like to review what makes the anamycin so important and why it is truly a next-generation anthracycline. Anamycin was created at MD Anderson Cancer Center to overcome the well-known problems of currently prescribed anthracycline. Anthracyclines like doxorubicin and donorubicin have been and continue to be cornerstone chemotherapies for a wide range of indications. For example, they are for the vast majority of patients the first line treatments for advanced soft tissue sarcoma and for acute myelogenous leukemia. But these heavily used anthracyclines can fall prey to multidrug resistance. They're limited in their use by their significant cardiotoxicity, and their efficacy is further limited in certain organs because of limitations in their pharmacokinetics, which essentially means they have trouble getting to certain locations in the body in therapeutic quantities. Well, anamycin was specifically designed to overcome these limitations. Perhaps most significantly, anamycin has little to no cardiotoxicity. In fact, in the first 42 patients we've treated that have been reviewed by an independent cardiology expert, there has been no evidence of cardiotoxicity, even though 32 of those patients have been taken above the lifetime maximum allowable anthracycline dose level set by the FDA. And some have been taken to well over double that limit. The bottom line is we fully believe the absence of cardiotoxicity coupled with the fact that anamycin typically outperforms doxorubicin in most animal tumor models means that anamycin has the potential to displace doxorubicin in a range of indications and keep in mind the doxorubicin has been a billion dollar revenue generally and if that's not enough anamycin also has the potential to go where current anthracyclines can't at least not in therapeutic quantities what we call the unique organotropic nature of animicin allows it to accumulate in the lungs in animals, in animal models, at up to 30 times the level of doxorubicin. And we just announced a presentation at the upcoming AACR meeting that will show a similar affinity for the liver. And we also have data showing this potential in the pancreas. All this really does point to promising therapeutic potential. But what really matters is phase two clinical data. And here to talk more about that is our senior chief medical officer, Dr. Paul Weymack. Paul?

Thank you, Wally. As Wally noted, we at Moleculin are extremely pleased at our progress to date. Our lead candidate, anamycin, has now reached the phase two stage of clinical development for our soft tissue sarcoma indication. And we expect to reach phase two stage for acute myelogenous leukemia later this year. The current slide summarizes our current status with anamycin and soft tissue sarcoma. As you can see, we have successfully completed phase 1B with the identification of 330 milligrams per meter squared as the recommended dose for phase two development. And we are now roughly halfway through enrollment for phase two. More importantly, of the initial six patients in phase two who have reached the stage of efficacy testing, four have stable disease. That's a 67% response rate. I should also note that in this study, we were not evaluating anamycin as first-line therapy. First-line therapy, of course, would be expected to yield the best results. But rather, the patients we are treating had an average of over four courses of prior therapy. Thus, this was a rather challenging patient population to be studying, and yet today we have a 67% response rate. Finally, and has been true of all clinical trials of vanamycin, And despite a prospective methodical search plan, we have yet to identify any cardiac toxicity from anamycin in this or in any study. Moving on to our acute myelogenous leukemia development, we have now completed our two phase one monotherapy studies. These were standard dose escalation phase one studies. In our 105 study, we were able to escalate up to a dose of 240 milligrams per meter squared administered on three consecutive days. Although this dose did not fulfill the criteria for stopping dose escalation due to newly identified dose-limiting toxicities in the patients, we nevertheless chose not to dose escalate further for three reasons. First, this was a monotherapy trial, and we recognize that it is highly probable if and when adamycin is approved for marketing for acute myelogenous leukemia, it will be as combination therapy. Now, the reason our initial trials were not as combination therapy, but rather as monotherapy, were FDA demands for new drugs. The second reason for stopping dose escalation was that newly finished animal studies had documented significant efficacy for animicin when combined with cytarabine when treating acute myelogenous leukemia. The final reason was that, as is shown on the slide, at 240 milligrams per meter square dosing, four of the five patients had either a partial or complete response. That's an 80% response rate. We have therefore moved forward to the combination therapy stage of clinical development in patients with acute myelogenous leukemia. In this study, patients with refractory or relapsed acute myelogenous leukemia are being treated with anamycin in combination with Cytarabine. This initial combination clinical trial will begin with the standard phase 1B dose escalation phase. Once the phase 1B has identified the recommended phase 2 dosing regimen, we will move on to the phase 2 clinical investigation. As of this time, we have five active sites in Europe participating in this trial. And we anticipate a number of other sites going active shortly. We have already begun treatment in multiple patients in the phase 1B portion of this trial. And we anticipate reaching the phase 2 stage later this year. And as was true in the soft tissue sarcoma study, we have yet to identify any cardiac toxicity. Moving on to our transcription immune modulator 1066 is currently being tested in multiple phase one clinical trials in patients with various types of brain cancer, primarily various types of glioma and medulloblastoma. These clinical trials have been and are being conducted at various prestigious medical university hospitals. including MD Anderson, Emory University, the University of Michigan, and Northwestern University. These phase one clinical trials have established that eight milligrams per kilogram is a safe dose and have documented both clinical and radiologic evidence of efficacy, although to date the data are limited. We are currently evaluating possible strategic partnerships and collaboration to assist in the development of 1066. And I should also note that we have received orphan drug designation for the treatment of brain tumors, as well as rare pediatric disease designation from FDA for 1066. Finally, I'd like to discuss our 1122 portfolio. These are our metabolism glycosylation inhibitors. Among the agents in this portfolio, our lead compound, 1122, has now finished its phase one dose escalation study in normal healthy volunteers. This study established the safety of 1122 and defined its pharmacokinetics. To that end, this drug is now ready to begin phase two efficacy studies. We believe there are two potential avenues for the 1122 portfolio. First, we have animal data suggesting it may have benefit in certain types of cancer, which is believed to be due to the fact that cancer cells are heavily reliant on glucose for metabolism. In light of this possibility, we have requested and were granted orphan drug designation from FDA for the treatment of glioblastoma. We also have clinical data suggesting that 1122 will be beneficial in treating certain types of potentially deadly viral diseases since many of the types of viruses that infect humans require modifications of glucose molecules being placed on their outer surface. Along those lines, we expect to report preliminary findings from NIH-funded animal testing in the treatment of potentially deadly arena viruses in the near future. Going forward, we are currently looking for potential collaboration opportunities for the 1122 portfolio of drugs. I will now turn the call over to our Chief Financial Officer, John Foster.

Thanks, Paul. As a small cap biotech, we're pleased with our cash position at $43 million a year end, which should fund us into the third quarter of 2024. These funds should support the development of our studies on the milestones that I'll cover shortly and beyond. We had an increase for 2023 in our research and development to $19 million with our increased clinical activity that Wally and especially Paul just discussed. We used roughly $27 million in cash in 2023 compared to $19 million in 2022. We expect expenses to level out and even reduce as we go into mid 2023 and into 2024. So what do our efforts bring us in the near term? Anamycin, we've delivered on starting the phase 1B portion of our phase 1B2 clinical trial for using anamycin in combination for the treatment of AML and Poland and Italy, which we expect to expand to at least one other country or countries in the EU in 2023. And we plan to announce the safety and efficacy by cohort in the phase 1B portion upon each cohort's conclusion. And then the open label phase 2 portion, safety and efficacy data going from that point forward, should be announced with each quarter's results. We plan to present the detailed MB-105 clinical study report at a scientific conference or in a publication in the near term, expanding on the top line data already presented. For the STS single agent US trial, we should announce the open label phase two safety and efficacy data with each quarter end announcement and keep you up to date on the weekly dosing of the animicin trial going on in the EU. With regard to our other core technologies, we have the NIH study that Paul just mentioned, with a molecule coming from our WP1122 portfolio. We should have those animal study results. We also expect to further our collaborations on treating GBM using WP1066, and additionally for WP1066, We should see top line results of the pediatric phase one trial, and we expect that trial to expand into a phase two. Now, all of these efforts surrounding 1122 and 1066 will be mostly externally funded. So you can see our focus with our own funds is on providing clinical readouts for anamycin in the near term. Wally?

Thanks a lot, John. So let me conclude the prepared portion of today's call by underscoring the key attributes of Moleculin. We believe we have the diversity and the multiple shots on goal of really a portfolio company. And yet we have the focus and near-term opportunity and frankly, the blockbuster potential of a drug like anamycin. And we're operating with a highly qualified and experienced management team with multiple development successes on our track records and coordinating a global network of truly world-class experts in our targeted indications. Most importantly, we believe all of this is now culminating in 2023 becoming what we like to call the year of data for molecular. And finally, as John just pointed out, we have the cash we need to deliver on that data. But I'd like to leave you with one last thought before we dive into Q&A. The last major development in anthracycline therapy was a drug called Vixios. And Vixios extended overall survival for a subset of AML patients by three and a half months. The story of that company feels a lot like Moleculin up to this point. Nobody was really paying attention to them. The stock was languishing around a dollar, and it seemed like they had been toiling away forever. But then, seemingly overnight, they started reporting data, the kind of data that had the potential to lead to a new drug approval. And within months, Jazz Pharma agreed to pay $1.5 billion for Vixios. My message to you is that the Moleculin team firmly believes that anamycin has the potential to become the next Vixios. And frankly, we believe it will be much more important than Vixios. If we're right about this, now is definitely the time to be paying attention to Moleculin. So thank you for your time and attention, and let's open up this call to Q&A.

Thank you. We'll now be conducting a question and answer session. If you'd like to be placed in the question queue, please press star 1 on your telephone keypad. Confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset or take your phone off mute before pressing star 1. One moment, please, while we poll for questions. Our first question is coming from Jonathan Ashwell from Roth MKM. Your line is now live.

A few questions, if you would bear with me. So we'll get more Phase II US STSLM data, you know, prior to top line. It certainly sounds like top line final data this year. And my question is, what gives you confidence that the 28 patients will be pivotal when the best result we've seen is stable disease and five of the six patients taking two cycles with two treatment experience to remain on anamycin? You know, might you have to do another trial in less treatment experience patients to, you know, sidestep that myelosuppression? and what kind of hurdle would that be to ask for such a patient population? Sure.

Jonathan, thanks for the question. As you well know, this is a pretty important subject matter. I'm going to lateral this to Paul, who is really the resident expert on our regulatory strategy and where we think this trial goes in the future. So, Paul, you want to tackle this one?

Yes, thank you. The, I don't think the chances of our getting FDA approval to market this drug based upon our current trial are great. This is a phase two segment in a limited number of patients. However, I think the data we are seeing are extremely encouraging for a number of reasons. These patients had been through many prior rounds of chemotherapy, so these were not the best candidates. Despite that fact, of the initial six patients, four out of the six have stable disease and are continuing on. And that's an impressive number in that if you look at the literature, there have been a few randomized placebo-controlled trials. in soft tissue sarcoma where patients failed one course. Not where, for us, it's frequently four courses. But just failing one course and then going to placebo, you have a progression pre-survival of six weeks. That's the average. And yet, we are going to be, when these four patients reach 12 weeks from the next efficacy analysis, even if they were found to have progressed in, that's 12 weeks. That's twice what a placebo would get in a very poor patient population. So, we believe we are seeing strong evidence of efficacy. We think these data strongly suggest that this drug would be worthy of proceeding to a pivotal trial. The design of the pivotal trial would be dependent upon the totality of the drug results in this study plus collaboration with key opinion leaders and then meetings with FDA. But we think in as poor a patient population as we're studying to get the results we are seeing, it's an indication that we are hopefully only one trial away from being able to file, to submit for an NDA.

Okay, just because the press release says pivotal data, which would have to be from an ongoing trial, so that was confusing. So definitely another trial would be And would you seek less treatment-experienced patients to sidestep this myelosuppression?

Oh, yes. We are treating these patients because whenever you're doing your initial efficacy study, there's competition for patients, and you have to sort of document to the investigators this drug has potential. And so you don't get the 80-second airborne of patients. We think these data are going to convince, and when we presented them to investigators, they are impressed that this drug has great potency. Currently, for most patients with soft tissue sarcoma, the initial chemotherapy is doxorubicin. And we think for all the reasons Wally, John, and I have stated, we're a better drug than doxorubicin. We don't have final definitive proof, but we believe that that's where we're going here. And that if these data continue, that we are hoping to show that we are a strong alternative to doxorubicin for this indication.

Okay. So, you know, as far as the primary efficacy endpoint for this trial is concerned, the only thing mentioned on clinicaltrials.gov is, you know, in light of any efficacy endpoint is resist ORR. So is that the endpoint here? Because you're talking about following patients who are off, most of whom are off drug for PFS, but there's no mention of primary endpoint, you know, in your slides, in the clinicaltrial.gov site. You know, what is the primary endpoint for this US STSLM trial?

We are looking at progression-free survival. I would point out again that this is highly unlikely this is going to be a pivotal trial, the final pivotal trial. This is going to be the, hopefully the next to the last. So from our perspective, we are looking at everything. We are evaluating all endpoints. And when we finish our analysis of all the endpoints, ourselves with key opinion leaders, and then go to the FDA, we would then determine what's going to be our primary endpoint after determining who our patient population will be. It is too early to definitively state what's going to be our primary endpoint in our final trial. That's why we're doing this trial. We're doing this trial to identify the patient population, the dosing, and the endpoint. We've already identified the dosing. We found it's 330 milligrams per meter squared. And now we're continuing on to identify the patient population and the endpoint for the next and hopefully final trial. Okay, the last two, the first one is quick.

Can you tell us the low dose used in cohort one of the EU STSLM trial? That's a short one. And can you be in any way explicit about this anthracycline cardiotox paper, you know, explicit regions of that paper that you might want to draw people's attention to?

As far as the European study, that is an investigator-sponsored trial. We are not running that trial. The investigator is. The dosing is entirely different. We do once every three weeks. They're doing more of a daily for consecutive days. So they are starting, because it's daily, at a very low dose of I think it's 30 milligrams per meter squared. And it's a phase one dose escalation. They're going to be increasing the dose. So it's going to be very difficult to compare their dosing regimen to ours. initially. As far as the cardiac toxicity paper, it was a review of all of cardiac toxicity and anthracycline therapy. What I would say to define our cardiac toxicity, I think I mentioned when I was describing where we are that we have methodically looked for cardio toxicity. We have done that by doing sequential measurements of certain enzymes, troponins, which when the heart is damaged, these go way up. And they go up, they stay up. We have not seen that. More importantly, the ultimate cardiac toxicity with anthracyclines is they don't damage the electrical system. You can think of the heart, it's two different things. It's an electrical system that makes the heart contract, and it's the muscle, the pump that pumps the blood. What anthracyclines do, they impair the ability to pump. Most of us with a healthy heart, 65% roughly of the blood in the heart is pumped out into the aorta with each pump. Two-thirds of the blood is pumped out each time. With anthracyclines, as the dose, the cumulative dose goes up, this starts to fall. So we have done measurements of the amount of blood pumped out each time. It's done by, you can do it with an echocardiogram. And we have obtained these, we have sent these to outside experts for them, outside expert cardiologists to review and to give us a number. And what they have found in every patient study to date is that the ejection fraction before the first dose of anthracycline remains the same throughout the study. within reason, it may go from 65 to 66 or 50 to 49, but it never changes significantly. Overall, the means are the same. So we have diligently sought any evidence of cardiac toxicity in all of our patients and all of our canceled trials. We have not found a single one on a patient to date. That doesn't mean that at some point in the future, When the number of patients goes from 50 to 250 or whatever, we won't see an occasional one. But this major cardiac toxicity problem, which limits the dosing of anthracyclines, we have not seen any evidence of it to date.

And Jonathan, I would just add, one of the things I think that's important about that paper is I think you know this well, but there are a few other anthracycline projects out there that try to make claims as it regards reduced cardiotoxicity. And what we found is sometimes when we get in conversations with people that there's some confusion, that they think there are other non-cardiotoxic anthracyclines out there. I think this paper sets the record straight. To date, to our knowledge and to the knowledge of those authors, there is no other drug that comes even close to anamycin in terms of its level of non-cardiotoxicity. So I like the fact that this has now been set forth in black and white, and we can reference it to dispel any myths that there would be non-cardiotoxic competitors out there.

Yeah, it sounds like a very useful manuscript. Thank you, guys. Thanks, Jonathan.

Thank you. Next question is coming from Jeff Jones from Oppenheimer. Your line is now live.

Good morning, guys, and thanks for taking the question. Hey, Jeff. Hey, guys. A couple of questions to build off what Jonathan was talking about. On the STS study, do you have sort of a hurdle rate for what you believe is a clinically meaningful impact on progression-free survival that would then trigger you to move into pivotal study? Yeah, that's obviously another Paul question. Please take it away, Paul.

Yes. It's always difficult to define exactly what will lead you to go forward. I won't quote Potter Stewart's definition of another thing. It's going to be a combination of how good is the progression-free survival, the average, and how narrow are the standard deviations. I would think that if we are able to double what would be expected with placebo, which is six weeks, that's a very strong indication to go forward. Because again, those six-week progression-free survival and placebo arms, Those were second-line therapy, and we are nowhere near second-line. We're far beyond that. So if we can be ballpark doubling what the placebo got, then I think it is time to go forward aggressively.

Okay.

And just to clarify, when you're saying placebo, it's not actually placebo but standard of care. Is that correct?

Um, no, uh, there, there were actually other studies with standard of care that didn't work, which were six weeks. These were studies from a while back. Um, but, um, uh, but there, there were, if, if you, there's some review articles out there and I don't want to cite one author over another, but if you do searches for, um, review articles from some of my friends, um, you see frequently six weeks. for either placebo or for certain drugs, and that's telling you that those drugs don't work at all. So I think we can confidently say if you have soft tissue sarcoma, you have failed primary therapy, and nothing is done in six weeks radiologically, there will be documentation you have progressed.

And Jeff, as I think you might know already, by the time you get to fourth or fifth line in these patients, there really is no standard treatment. At that point, it's like investigator's choice, and it's a wide range of desperate experiments, if you will. Fair enough.

I appreciate the clarification. Hey, Jeff. This is John. We reference that paper in the 10-K. I'll be glad to send it to you. But we actually provide the paper reference on that placebo trial.

Okay. No, that's great. plus cytarabine, so you're doing a dose escalation to optimize dose, is so I assume following that, you would look at an expansion phase two, and then similarly, if that looks good, move on to a pivotal study. Am I thinking about that right?

Yeah, let me sort of kick this off, and, Paul, I'll invite you to add whatever color you think is important. But, Jeff, this is a really – I'm really glad you asked this question in particular because it gets down to when and how we might be generating truly pivotal data. We don't want to get ahead of ourselves, and we want to be appropriately cautious here. But with an overview umbrella of caution, when we think optimistically about what may happen in this trial, and that's informed by the strong response we had in the monotherapy trial, it's entirely possible that we truncate the phase 1B portion of this trial. In other words, if we start to see strong activity at the current 190 milligram dose level, it's not out of the question that we call it and say, you know, that's good enough for an RP2D. And if it is, you know, move more quickly into phase two. And if we continue to see that hoped for level of response in the phase two expansion phase, it may make sense for us to even truncate the expansion phase. and collect our data, go to the regulatory authorities and talk about the pivotal trial design more quickly than one might otherwise expect. So again, we're not predicting that because it's just too soon to make a prediction like that, but I want to make it clear to people that's a possibility here, okay?

No, I appreciate that.

And so given- If I could just add to what Wally said. That's exactly what happened in our 105 study in that, as I mentioned, when we got to 240, we did not have DLTs. The protocol said we were allowed to dose escalate further, but we looked and said, look, we got efficacy, four to five patients. We don't have toxicity. We found a good recommended phase two dose. We are now going to be doing the same thing with combination therapy, and we picked cytarabine because the current standard of care, first-line therapy is an anthracycline and cytarabine. So we are going to be doing this combination. And as Wally said, we will look at each dose and cohort for both safety and efficacy. And when we think we have hit a dose that would be appropriate to expand, we will do it then and there whether or not we have a DLT problem. It's a combination of safety and efficacy that will lead us to go forward. The nice thing about leukemia as opposed to solid tumors, solid tumors, It's a little bit more difficult efficacy. You're having to look at scans, see how much did it grow. Here you do the bone marrow and say, is the cancer gone, yes or no, based on the percentage of blast cells. So it can move very quickly in leukemias as opposed to solid tumors where you're over time studying scans. Got it.

Okay, so I'll ask two more questions and then get out of the way so other folks in the queue can ask. As you outline those two different scenarios for the AML studies, sort of a best case as you move quickly into a Phase II and then truncate that to have a dialogue with the agency versus, say, the anticipated with some dose escalation and then a larger, call it Phase IIa. type of timeframes are we talking in those two scenarios? And then the second question for John on the financial side, just how should we be thinking about the R&D spend trends into 2023 and moving forward? Sure.

This is Wally. Let me maybe kick off the discussion about timing, but I'll defer to Paul if he wants to tighten what I'm about to say. So if we go down the, let's say, the most optimistic path of what I described where we truncate the Phase 1B and we even truncate the Phase 2 expansion, practically speaking, dose escalation cohorts, as you know, go three by three. So by definition, you've got to recruit three patients and then you stop recruiting because you have to let those patients run their course, meet the DLT cutoff requirements and so forth. So there's a natural lag that's built into the dose escalation portions of the trial. And so you really can't be more than a couple of months of you can't be faster than a couple of months per cohort just because of those practical considerations, even if you had patients all waiting in line, right? Then the next question is how quickly can you recruit into the expansion phase? And that's why we added Italy to the roster here, and we're looking at the possibility of even adding more sites. Candidly, the recruitment has been stronger than we expected. And it raises the specter that we might not even get those additional sites open before we get to the expansion part of this trial. And that's good news. That's good for us. But I'm trying to give you a sense of cadence here. And so if that holds, if the current rate of recruitment holds, you know, we could be looking at picking up, you know, eight or nine patients in the expansion phase in the span of, let's say, by mid-summer. Now, that's aggressive and that's what if-ing if we stay at the pace we're seeing right now. And it does vary from time to time, so we can't rely on that. But that's what I'm trying to give you a sense of how quickly it could happen. Now, in terms of how long it could happen, I mean, the sky's the limit, but practically speaking, if we really decided we wanted to run the the run out the full, uh, expected size or planned size of the phase two expansion phase, you know, that could take the rest of the year. Um, and we're longer if, if for some reason, all of a sudden recruitment falls off. So on the, on the long end, it's sort of how high is up, but on the short end, I think you can see why we're feeling like it's entirely possible by the middle of this year. we could be talking about end-of-phase-one meetings with the agencies. So that's why we think this is such an exciting time and why we want people like you focused on what we're doing because it's going to happen relatively quickly here, we think.

Great. Really appreciate the color, Wally.

I would just add, and I agree with what Wally said, there are two things that drive how fast this will go. That is, how fast will our investigators recruit patients? And as Wally said, we're very pleased. And how good is our drug? And as we have stated today, we are very pleased with our drug. So we are optimistic.

Great.

John, you want to tackle the R&D spend part of that question? Sure.

Sure. No, Jeff, yeah. You should see the levels we had in the third and fourth quarter continue, both in R&D and G&A in the first two quarters. And then It should drop off. You know, you have the initial payments to CROs as you start up the trials, and manufacturing the drug, anamycin, takes a lot of time, so the lead time is quite long. So those expenses will come earlier in the trials. So you should see a tell-off beginning in the mid-half of this year, hence the $43 million can get us into the third quarter of 2024. Perfect. Thanks, guys.

Thank you. We reach the end of our question and answer session. I'd like to turn the floor back over to Wally for any further or closing comments.

Well, again, really appreciate everybody's time and attention, and I hope you can tell the level of excitement on the molecular side of things is really ramped up, and we think it's for good reason. And like we've said in sort of the Q&A portion here, things could move fairly quickly here, and that's why we really want to encourage people to start really paying attention, really drilling down on what we're doing and why we're doing it, because like I say, things are going to happen quickly. Thanks again so much for your time, and have a great rest of the week.

Thank you. That does conclude today's teleconference and webcast, and we disconnect your line at this time, and have a wonderful day. We thank you for your participation today.