Panbela Therapeutics, Inc.

Greetings and welcome to the Panbella Therapeutics third quarter 2024 earnings call. At this time, all participants are on a listen-only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note, this conference is being recorded. Joining me on today's call are Jennifer Simpson, Chief Executive Officer, and Sue Horvath, Chief Financial Officer. Before we begin, please note that statements made on this call that are not historical facts may be considered forward-looking statements. Risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such forward-looking statements are detailed in the company's filings with the SEC. Any forward-looking statements made on this call speak only as of today's date, and the company does not undertake any obligation to update or revise any of these statements to reflect future events or circumstances. With that, I will turn the call over to the company's CEO, Jennifer Simpson. Dr. Simpson, please go ahead.

Thank you, and thank you all for joining us. I will start today's call by highlighting our investment from Nant Capital and then discussing our clinical development program, our recent achievements, and upcoming milestones. After that, Sue will review our financial results before we open the call-up for Q&A. As mentioned, a significant recent development is our $12 million strategic loan commitment from NAP Capital. The loan consists of two tranches of convertible promissory notes. The first tranche was funded in the gross amount of $2.85 million on October 22nd, and the second tranche is expected to fund in a gross amount of $9.15 million by November 15th, subject to customary conditions. This commitment is more than just a financial investment. It represents the potential of orchestrating the activation of the patient's immune system and the metabolic pathways as an evolutionary approach to address pancreatic cancer and extremely difficult to treat cancer. Our lead assets, ibospamin, aflornithine, and flimpovi, target the polymine pathway in ways that could complement Immunity Bio's natural killer cell and killer T cell activation technology. The combination of immunotherapy and metabolic pathway platforms could create powerful synergies in enhancing patient outcomes. We believe the strategic investment reflects the investor's confidence in the potential of this multi-targeted approach to reset dysregulated biology and potentially enhance anti-tumor activity. We're especially encouraged by Dr. Patrick Shumshung's recognition of the synergistic potential between our platforms. His perspective as both a surgeon and leader of Nant Capital and Immunity Bio validates our approach, particularly regarding our lead assets, ibospamin, aflornithine, and flimpovi. We're excited about the potential impact of combining these innovative approaches in our fight against cancer. Now let me provide an update on our lead program, the Phase III ASPIRE Global Clinical Trial. This pivotal study evaluates our candidate, ibospamin, or SVP101, in combination with gemcitabine and nabpaclitaxel, for first-line treatment of metastatic pancreatic ductal adenocarcinoma. As many of you know, our safety database has continued to expand substantially throughout 2024, and we're pleased with the consistent safety profile observed as announced through the Data Safety Monitoring Board, or DSMB, meetings that have taken place. The trial's progression has been remarkable, with strong site engagement driving a faster-than-expected enrollment rate. we anticipate achieving full enrollment of approximately 600 patients by second quarter 2025. Regarding the timing of our interim analysis, as we've mentioned before, we continue to observe a notably lower event rate than initially projected, potentially signaling that patients may be experiencing better outcomes than expected. This persistent trend of extended survival time has led to our interim analysis timeline of the first quarter of 2025. And as we all know, this becomes particularly significant when we consider the current treatment landscape. Even with recent advances like NallerFox, which showed a modest 1.9 month survival benefit, the urgent need for more effective therapies remains clear. Metastatic pancreatic cancer continues to carry a devastating prognosis with median survival still falling short of one year. The lower event rate we've observed in the ASPIRE trial so far takes on added significance. If these early signals translate into meaningful survival benefits, I would expect them to represent a significant advance over current standards of care. The current regulatory environment for pancreatic cancer treatment, combined with our encouraging signals, positions us well for potential future FDA consideration. We remain focused on executing this trial with the highest standards driven by the urgent needs of pancreatic cancer patients. The next few months leading to our first quarter 2025 interim analysis will be crucial, and we look forward to sharing those results, which could potentially reshape the treatment paradigm for this challenging disease. Turning to our FAP program, we have worked with key opinion leaders to help finalize the protocol, which is in the final stages as we prepare to submit to the regulatory agencies for review. We look forward to advancing the protocol for review while evaluating opportunities to maximize the program's potential. Regarding the PACES trial, as many know, this Phase III study of LymphoV for preventing high-risk adenoma and second primary colorectal cancers has completed enrollment. As we've mentioned before, having successfully passed the planned utility analysis, We anticipate data readout by the second half of 2026. This NCI supported study conducted by SWOG has the potential to impact the treatment landscape for patients previously treated for stages zero through three colorectal cancer. In our phase two portfolio, we continue to see progress across multiple programs. The aflornithine pediatric neuroblastoma program has provided additional value through monetization with U.S. World Med's FDA approval of aflornithine, marking a significant milestone as the first FDA-approved polyamine-targeted therapy in cancer. This validation strengthens our confidence in our polyamine-focused approach. Our clinical programs continue to expand. The Phase II aflornithine study in castration-resistant metastatic prostate cancer is actively recruiting while our Type 1 diabetes trial, in collaboration with Indiana University School of Medicine and JDRF, has all six centers actively enrolling, with an interim analysis expected next year. Looking ahead, our planned phase two trial of ibuprofen and platinum-resistant ovarian cancer, in collaboration with Johns Hopkins University School of Medicine, is progressing as anticipated. The encouraging preclinical data presented at AACR provides a strong foundation as we prepare to evaluate ibuprofen in combination with polyamine metabolism and immune modulators. Moving to our Phase I pipeline programs, I'm pleased to report that in late September, we enrolled the first patient in the dose escalation study of CPP1X for STIC11 mutant non-small cell lung cancer. This study is being conducted at the prestigious Moffitt Cancer Center. The key points of this program are evaluating of pronatine sachets in combination with Keytruda. The initial phase one objectives focus on determining maximum tolerated dose and the safety profile. We expect the data readout by mid 2025 and the phase two initiation is targeted for later in 2025. These program objectives are being executed under excellent clinical leadership. I'm particularly encouraged by Dr. Janelle Gray's leadership as principal investigator. Dr. Gray, who chairs Moffitt's Department of Thoracic Oncology, recognizes the critical need for new combination approaches with immunotherapy, especially for STIC11 mutant tumors, which typically show reduced antitumor T-cell levels. This trial is especially meaningful following our recent success with CPP1X and neuroblastoma, Our preclinical data suggests polymine modulation could potentially reinvigorate immune response, and we're eager to explore this clinically in the STIC11 mutant non-small cell lung cancer patients, a population that historically responds poorly to checkpoint inhibitors. Looking ahead, once we establish safety in phase one, we'll advance to phase two to evaluate efficacy. Beyond this specific trial, We're excited about exploring aflornithine and ibospemin's potential role in combination with other immunotherapies, including CAR-T therapy. Turning to our neoadjuvant pancreatic program, we continue to progress toward opening this investigator-initiated trial. Our preclinical development efforts also continue to show promise, particularly through our ongoing collaboration with MD Anderson Cancer Center. This research initiative remains focused on evaluating the potential synergies between our polyamine metabolic inhibitor treatment, and advanced immunotherapy approaches, including RT cell therapy and bispecific monoclonal antibodies. These preclinical studies continue to complement our broader clinical strategy and reinforce our commitment to innovative cancer treatment approaches. Building on earlier presentations, our research collaboration with Vanderbilt University Medical Center continues to generate valuable insights. Their presentation at Digestive Disease Week Conference earlier this year focused on a fluorethane's evaluation in gastric pre-malignant conditions. The Phase IIa trial results demonstrated important safety and efficacy findings, particularly showing a fluorethane's ability to reduce DNA damage in treated patients. These findings continue to validate our polyamine pathway approach, especially for patients at high risk of developing infection-associated gastric cancer. The data from this NCI-funded study remains particularly relevant as we advance our understanding of polyamine pathway targeting in both cancer prevention and treatment settings. We're encouraged by the sustained momentum in these collaborative efforts and look forward to further developments in these research programs. In summary, our remaining 2024 clinical milestones include completing the necessary steps to open the neoadjuvant pancreatic cancer trial in early 2025, finalizing the Phase II ovarian trial to open in early 2025, and submitting the FAP global registration protocol to the FDA and EMA for feedback. And in 2025, we anticipate the overall survival interim analysis for our Phase III ASPIRE trial in the first quarter of 2025. as well as the completion of enrollment anticipated in the second quarter of 2025. In closing, the third quarter and subsequent period have been important for PAMBELLA, marked by significant clinical advancement and a new strategic relationship. Most notably, we secured a $12 million strategic loan commitment from NAC Capital in late October representing not just financial backing, but a powerful clinical alliance that looks to combine our polymine metabolic inhibitor platform with their natural killer cell and killer T cell activation technology. Dr. Patrick Shunchung's endorsement of this synergistic approach, particularly regarding ibuprofen and fluoroethanol, validates our strategy and opens new possibilities in our fight against cancer and metabolic conditions. As we move through the final quarter of 2024, we remain focused on advancing our robust clinical pipeline while leveraging this new partnership to enhance our therapeutic potential. The momentum we've built, coupled with the strategic alliance, positions us strongly for continued progress and value creation. I will now turn the call over to Sue to discuss our financial results. Sue? Thank you, Jennifer.

General and administrative expenses were approximately $1.1 million in Q3 of 2024. This is flat compared to the same quarter last year. Research and development expenses were approximately $6.1 million in Q3 of 2024 compared to $6.7 million in the prior year quarter. Slightly lower spending is due to reduced preclinical costs and lower direct costs from the CRO for the ASPIRE trial. Net loss for the quarter was $7.2 million or $1.48 per diluted share compared to a net loss of $7.8 million or $53.74 per diluted share in Q3 of 2023. Total cash as of September 30th, 2024 was approximately $142,000. This balance does not reflect the $12 million funding agreement we filed on October 22nd. Total current assets were $5.2 million and current liabilities were $20.1 million at the quarter end. Regarding our capitalization, as of September 30th, 2024, we had approximately 4.85 million common shares outstanding. After including shares reserved for options and warrants, our issued and fully reserved share count was approximately 13.95 million shares. Cash used in operations for the nine months ended September 30, 2024, totaled approximately 12.5 million. Cash used in operations included our net loss for the nine months, offset primarily by an increase in the company's accounts payable and accrued liability balances. On July 24, 2024, the company entered into a loan agreement with US World Med LLC. Pursuant to that loan agreement, the company and our wholly owned subsidiary, CPP, obtained a term loan from the lender in the original principal amount of $1.5 million. The loan proceeds were used by the company for payment of fees and expenses owed to its contract research organization for the ASPIRE trial. As Jennifer highlighted earlier, on October 22nd, we executed a note purchase agreement with Nance Capital, which includes two convertible notes, a 2.85 million tranche A note issued immediately and a 9.15 million tranche B note to be issued by November 15th, 2024. The notes have six month maturity and earn interest at SOFR plus 8%. Both notes can be converted to company stock at 37 cents per share with a 33.33% ownership cap until maturity. The funds will be used for general corporate purposes and debt repayment. The U.S. World Med note was paid off immediately upon receipt of the Tranche A funds. Pembela's common stock remains eligible for quotation on OTCQB under the symbol PBLA. The company continues to pursue a new listing of its common stock on a national securities exchange. Operator, we are now ready to take questions.

Thank you, Mom. At this time we will be conducting our question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue and you may press star 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. We have a question on the line from Jonathan Ashoff with Roth Capital. Your line is live.

Hello, Jennifer and Sue. Glad to hear about the $12 million. Can you tell me what that does in terms of your potential to uplift? How does that maybe kick that up to a higher gear or a higher likelihood?

Do you want to take that or do you want me to?

Excuse me. We're still pursuing the up list round. Because it's a loan, it doesn't immediately assist us in terms of our stockholder equity requirement. And anything other than that would be speculation.

Okay. So how many think... that will last? And, you know, what triggers, if anything, triggers the second tranche, the larger tranches? Because I didn't hear any mention of that.

There are no requirements for the second tranche. So that should be completed actually by the 15th, which is tomorrow.

Okay. In the language of 212 million, you know, it's down to a bit less than certain. Yep.

And we'll continue to manage cash as closely as we can and make that last into the first quarter of next year.

I mean, because you can hold off the people you owe and a portion of that debt you can push to a longer term. Maturity, correct? You don't have to pay all that debt off fairly soon, right?

I'm not sure I understand that the two notes with NAM capital have a six-month maturity date.

Okay. All right. I think, I mean, you know, congrats on the progress, but I think, you know, this alone was quite critical, and, you know, congrats on securing that. I think that's it for me. Thank you.

Thank you. Thanks, Jonathan.

Thank you, ladies and gentlemen. As we have no further questions in queue at this time, this will conclude today's conference, and you may disconnect your lines at this time. And we thank you for your participation.