Oncological drug developers have fierce competition for patients, both in trials and in market. But Moleculin Biotech Inc MBRX rests secure, snugly insulated from the battle.
“There’s a reason not a lot of people are playing in the sandbox we’re playing in,” Moleculin CEO Walter Klemp recently told Benzinga. “It’s hard. It’s really hard, and because there aren’t many people in these particular indications, that general competition for patients — we’re buffered from it.”
An Incidental Strategy
Moleculin targets hard-to-treat and rare diseases, with three properties addressing pancreatic cancer, melanoma, leukemia and glioblastoma. Competitors are so sparse “you almost can hear crickets," Klemp said.
The CEO considers the loneliness an advantage, compounding the expedited regulatory processes and cheaper trials afforded to orphan drug developers.
This wasn't always the plan. Moleculin launched in 2007 with a focused goal of developing its WP1066 for psoriasis. Just as the team was outgrowing its friend-and-family financing and began prepping for a June 2016 initial public offering, it was presented with an opportunity.
The developers of a drug called annamycin depleted their funding before completing a Phase 2 study and approached Klemp with an offer.
“We said, 'if we’re going to create a public company, [it's] far better that we create a public company that has a diverse portfolio' — what I call multiple shots on goal,” Klemp said. “... We intend to save lives and we’re pushing every button we know ... to do that.”
The Pipeline’s Potential
Moleculin is slowing its rate of project expansion and is instead devoting capital to its pipeline, particularly annamycin.
The treatment has the potential to outperform Vyxeos, an acute myeloid leukemia drug that extended the survival time of trial participants by about three-and-a-half months.
“We think we have the chance to more than double the number of patients [who] can qualify for a bone marrow transplant, which would just be remarkable [and] would be huge for the disease,” Klemp said.
Annamycin’s previous developers only dosed Phase 2a participants before exhausting funds, but anecdotal data summaries were nonetheless encouraging.
Of the eight near-death, option-expended patients who were dosed, five reported complete removal of AML from their blood, according to the Journal of Clinical Lymphoma, Myeloma and Leukemia.
Three were rid of bone marrow blasts, which qualified them for curative bone marrow transplants and provided an 80-percent chance of full recovery.
“Instead of talking about increasing overall survival by about three-and-a-half months, we’re talking about saving their lives,” Klemp said. “... If we’re right and able to reproduce that data in our own trials, I would argue that that would be a greater contribution to AML than Vyxeos was.”
Jazz Pharmaceuticals plc - Ordinary Shares JAZZ paid $1.5 billion to acquire Vyxeos from Celator.
“If three-and-a-half months is worth $1.5 billion, I can’t wait to see what annamycin might be able to accomplish,” Klemp said.
Moleculin is on “on the cusp” of initiating annamycin trials for AML in the U.S. and Poland, and Klemp said patient recruitment, a step expected to kick off this quarter, is “imminent.”
The Houston-based company also intends to launch two additional studies this year within the 700-molecule WP1066 portfolio. The namesake molecule has been approved as an Investigational New Drug and will begin a brain tumor trial before the end of the first half, while 1220 is expected to start clinicals for cutaneous T-cell lymphoma before the end of 2018.
Management also sees yet-unproven potential in the WP1732 candidate, whose preclinical test results suggested a "breakthrough" opportunity to treat pancreatic cancer through the ubiquitination process.
The WP1122 portfolio, an attempt to use metabolic inhibition to attack tumors, is in preclinical or IND-enabling development this year.
“What I hope people see when they look at our portfolio is sort of uncharacteristic breadth and diversity as compared to a lot of small biotechs,” Klemp said. “The typical small biotech has a primary technology and everything else orbits around it. We really have three distinctly different ones, and each one of them has blockbuster potential in our opinion.”
Moleculin doesn't intend to wander far beyond candidate development, their CEO said. In fact, it expects to eventually bring its drugs to market with the help of strategic partners.
“A sales force is not necessarily out of the question, but our default position is: what we are good at is getting drugs from bench to clinic and generating real data,” Klemp said. “What big pharma is good at is navigating the labyrinth of payers and Phase 3 trials and the marketing undertaking, so our default position is we expect to partner with somebody once we’ve crossed the rubicon of demonstrating efficacy in humans.”
A Turning Point In Financing
As Moleculin nears that point, Klemp expects it to become more financially stable.
Before taking the company public, he got Moleculin off the ground with more than $13 million of his own money and friend-and-family financing. He brought it to market in summer 2016.
The stock is down 78.4 percent off its launch, but Klemp is not necessarily concerned.
“We know that when you initially go public, people have expectations of timelines and milestones, and if you look at the history of when we went public and then changes in the market and changes in our stock price, it’s consistent with us signaling to the market that the process of getting annamycin in clinics was going to take longer than originally expected,” he said.
“I don’t think it’s that surprising that, when that happens to a company, the stock price goes down, because people start to wonder, ‘is it going to happen when I wanted it to or not?’”
Klemp is convinced the company is at a “major turning point" as it prepares three clinical trials with subsequent data releases. It’s a turning point, he said, for both the stock and public sentiment.
As is usual in the biotech business, Moleculin has sustained operations through periodic offerings, most recently on Feb. 16.
“It’s a little bit of a chicken-and egg,” Klemp said. “When you make a new discovery and if it opens a new door for us, that gives us an opportunity sometimes to raise more capital, and that capital raise then gives us the latitude to add that to the development pipeline.”
Investors don’t always react kindly to the process. Moleculin shares dropped 26 percent after its last offering. Fortunately, clinical data could break the share dilution cycle, Klemp said.
Clinical data — particularly Phase 2 clinical trial data — typically marks a turning point where the next financing is either an exit "or a license that's tantamount to an exit," he said.
"At a minimum, the value of the company has responded to the clinical data enough so that the next financing is not nearly as diluted."
Photo from Wikimedia.
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