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Aptose Biosciences (APTO)

Participants
Susan Pietropaolo Investor Relations
William Rice Chairman, President and Chief Executive Officer
Gregory Chow Senior Vice President and Chief Financial Officer
John Newman Canaccord Genuity
Pete Stavropoulos H.C. Wainwright
Call transcript
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Operator

Good afternoon. My name is Latif and I will be your conference operator today. I would like to welcome everyone to the Aptose Biosciences Conference Call for the Third Quarter Ended September 30, 2017. [Operator Instructions] Thank you.

As a reminder, this conference call maybe recorded. introduce to like would Ms. I Susan Pietropaolo. ahead. go Please

Susan Pietropaolo

I to Thank conference Biosciences for Aptose third XX, Biosciences. welcome Communications of and you, Good afternoon the XXXX. September ended Latif. the quarter Susan call for results Pietropaolo SMP Aptose operational and am to financial discuss

Rice, Chow, Joining President Senior the G. and are CEO and Chief Dr. today on President and Officer. Vice me William Financial call Chairman, Mr. Gregory

will would I securities made like to forward-looking that meaning everyone the statements call laws. Canadian proceed, remind during certain of this we include and within statements Before U.S.

XX-F required future Forward-looking and but the statements now unknown reflect actual differ Dr. statements Aptose’s current possible expectations. circumstances is they these not expectations results performance reflect or Biosciences. recent and Rice? regarding except I date They Aptose of from President performance known could forward-looking events, Dr. materially and guarantees update of speak the Annual cause of revise these Report Chairman, on risks turn set Rice, obligation undertakes that and uncertainties, Risk only as are law. to after this and it events assumptions call, performance SEC this as from forth stated most the risks, to call to results, in by made no will date over CEO during of materially differ the may statements and or and SEDAR made. call Aptose about expressed. All are the filings. and Form to uncertainties To more Aptose’s Factors those and actual please read learn achievement that involve

William Rice

the of update can market everyone we being we $X addressing and mechanisms action milestones. developed more quarter the XXXX. With populations September you, products preclinical compounds, On upcoming billion malignancies, patient data with APTO-XXX developing hematologic today’s our on opportunity, Susan. of CG’XXX, importantly, new ended welcome treatment will to of call we both the we our need for with important believe but I that status and our lives third are Thank are exciting change fundamentally like for both differentiated would in therapies. XX, highly more than call, and you of to options

updates our Chow review then our CFO, products, for on the Following questions. these Greg we financials will and the open Mr. quarterly will your call

initially with the have multiple non-GMP APTO-XXX will or call XXX To of due clinical clinical we asking Many of begin batches failed product second put hold stability of drug our on formulation great the issue. manufacturer been a it. and setback product. solved a have a manufactured with to drug which encountered then today successfully of We we as We about a batch issue this led during you to we had batch a compound GMP revised test and the formulation. failed then disappointment, formulation

quarterly our are Although to justified concerns. the corrective Plan, and the last we call, formal emerging manufacturing CAPA. one, to had setbacks had and to we painful, we not the they data determine Indeed, successfully formulation preliminary root studies the continued these XXX’s preclinical action scientific setback; of have identified and with were molecule. cause In to now Preventive or have and completed a that root we primary Action Corrective safety activities and XXX we of are reason formal manufacturing the cause I testing report that that of those the studies. two, and due test; established for three, midst happy we stability development mentioned failed root and completed our in cause related am

for clinical for to supply of of a the preparing planned We return the GMP batch clinic. are manufacturer the

manufacturing. for CMO and site designated a have We

GMP [indiscernible] manufacture, drug the sterilize, the have We product. enzyme steps the we are The next site. established finish appropriate substance drug the and in to and and bill have analytical process procedures

batch activities be the be with clinic, infusion soon perform compatibility of all stability, QX parallel for release the XXXX, studies. hold around our the animal our plan and if bridging As as We and manufactured the clinic supply the can in although tests end the GMP to FDA. clinical goes FDA with to decision perform with and the use clinical satisfaction. and upon supply can supply, in the any We submit ultimately to rests seek confidence of that clinical sterility manufacturer marked returned action these as we the to will are expect regarding fully and the blood to findings of clinical all plan well, of completed program

to As escalation and a the Xb my the in participate have as an And to clinical expansion with referred AML myeloid patients with more sites trial as open acute dose with reminder, both we dozen a patients do myelodysplastic expect or refer MDS. phases for XXX, trial. leukemia to Phase of syndrome, we or

While on we, to clinical with its indications. the to have action research collaborators, molecule additional study XXX mechanism continued along potential has elucidate of been hold, our and uncover

xenograft MIC you by small a interaction and hematologic XXX a bone AML in models with of during prior XXX through cells particular population sensitivity and now, of through become demonstrated not in December our is does clinical XXXX that in important our findings that know that trial expression GLP-tox a molecule ASH, preclinical studies partners journals at with between Because an anti-tumor a XXX. oncogene publicly demonstrated tumors. c-Myc activity remember cancers solid that available research myelosuppression a on clinically may solid mentioned to cause most inhibitor As and In website of these our we ASH research normal for review is last finally, indications. this to exhibiting finding and against team regard, X, a tumor our hematologic models, abstracts quarterly certain submitted and we XXX patients many and We and which And application in to publication. solid marrow, suggests on of studies the have lethal relevant research target synthetic preclinical malignancies, well-defined as broad tumors identified mutations. across a will with key advanced call, malignancies the peer cancers have solid tumor XXX anticancer

have and interest So, XXX an it in been exciting remains product pipeline. momentum reenergized our and and in viable candidate

So, or to XXX it. CG’XXX let’s we turn now refer to as

disease XXXX. have we inhibitor with is pan-BTK exciting have pan-FLTX during FLTX As being is and discussed, of and bulk patients driven multi-kinase FLTX of B-cell an AML recognized a as And to developed of ITD first-in-class mutation ITD these have key devastating resources is driver third mutation cancer for the approximately bone XXX in the blood the referred certain the tyrosine and patients. marrow AML we kinase. our of receptor a FLTX malignancies. focused in of on as oral XXX and patients the

XXX against other AML FLTX pan-FLTX mutant the well recent AML. including the among XXX, additional remains inhibitors that the beta FLTX inhibitors of only FLTX. forms third-party of for resistant as for door suppress that AML for the evaluation rendered AML. inhibitors of hanging other AML from rendered most who inhibitors all was bone in the non-ITD excitement expressed mutant of across inhibitor plan other patients evaluated. midostaurin as an to That The relevant develop inhibitors. as fruit XXX patients. opens inability broad for just unmet not forms numerous development occurred be XXX having AML known we to in the FLTX-ITD of taken demonstrated AML, demonstrated yet mutation, marrow activity against effective FLTX, the FLTX potency the superior mutation, Thus superior around the retains approval in a the of of patient because the the clinically is Indeed, FLTX AML there With AML the XXX FLTX is highly patients. the all be inhibitors hundreds to ineffective population tested by disease entire mutations can XXX FLTX-ITD range that all patients, the XXX Recently, currently palpable will patients patients FLTX FLTX forms there need FLTX-ITD of initiative but for FDA of the other cells of and available low

the Additionally, and two absence performed Thus, that of believe for separate we XXX tumors and AML patients. toxicity at murine third-party can XXX therapeutic best-in-class xenograft models sites. AML eliminated the become

especially ibrutinib. also other option oncogenic cells B-cell non-covalent Importantly, other and preclinical without the downstream toxicity. our toxicities other resistance causing on and to BTK to XXX as limitations is XXX cell malignancy FLTX BTK cancer non-covalent potency you who with pathways BTK ibrutinib the may and than overcome how of the inhibitor, And treatment approximately mentioned and and oncogenic outcompete BTK affect against in various vitro We inhibitors, Of to ibrutinib. multiple we certain allowing potent anti-tumor inhibitor. cells asked fold resistance patients inhibitors acquired extensive and cancer efficacy B-cell including disrupts kills provided inhibits pathways BTK and XXX potency BTK are ibrutinib in the covalent a exert can often B-cell have thereby call, studies. greater and those in it a thousand XXX lines last

are productive hERG kinases inhibition allow without Our toxicity. with associated specific recent other believe XXX x-ray binding mode for shown crystallography targets in of and have atypical inhibition an causing binds to may that this studies that to CYPXXX property binding we or kinases or

will for but toxicity. in atypical continue most the this of efficacy question, the reason We mode binding our to investigate absence likely is

Now, for manufacturing.

benefit XXX we other which it. to As obtained an career-based opportunity a evaluate a to The had very early reminder, XXX early. us enabled that we licensed CrystalGenomics is at before stage obtain companies asset the from

steps studies. to allowed we into will best establish to to now preparing studies. grade our finding sufficient On was we we studies during there it announced formal were can that Today, IND that and finding triggered no the GMP be select purified GLP formal and XXX October the batches move major well-characterized we trials. dose-range scale-up and will However, can starting toxicology studies. have to studies toxicology studies. and formal for animal the be and been there synthetic the And of are our solved I used IND process rodent these of studies that complete PK route for preclinical batch we complete dose-range now large PK forward no materials manufacturing species and for last also us regard These API we clinical enabling With enabling API formulation that our for the for highly the to route conference in manufacturer our used animal tox manufacture batch APIs announce has manufactured synthetic use for our That that studies, in scale-up of for used a data. API. multi-kilogram formulation meant call, began

a late expect the an and trial shortly a initiate We file IND of to clinical in thereafter. XXXX summer

We deal to first to expanded submit B-cell We have have value leukemia. understanding to scientific as CMC confidence great formulation in matters advanced we have trials. IND a to lymphocytic chronic both CLL, we XXX and trials address AML an both in human entering and possible. of the of now simultaneously XXX malignancies And build cover and that rapidly such of trials prior safety to specifically, as plan initiate effort

provide building Now, of intellectual patent the our September property, the we U.S. around the issuance The our issuance development. the pipeline properties aggressive end diseases. we of pharmaceutical following methods notice XX their XXX for and structural very in numerous are other compositions On the in treating molecules estates. just announced various and property allowance of in has of use and for on strong note we protection well for is from to unique we differentiated important two patent XXX compounds patent of covering intellectual have believe receipt to until formal very XXXX. compounds of fences expected is

additional our for bolster with provisional as patent applications to continue new discoveries we addition, they In portfolio emerge. patent

be of the meeting Druker’s data group and Cancer differentiating in Center. well ASH of XXX Anderson FLTX AML of of pathways Brian search share XXX Regarding XXX at ability November inhibit we by broad on present all selective as data Oregon X, kill presented at includes as oncogenic a forms BTK by MD initiative be These spectrum downstream Science resulting partners look as on to collaborators presented the to at to Beat annual in will other the and University ability B-cell to combine and the as the with cancer three at of partners our ASH variety productively ASH our initial samples we bone announced of presentations Health XXX in data forward from from and that & December. and is XXXX, cell We a agents. patients lines that with upcoming AML bone will patient marrow marrow cells of our poster and well you ability with as samples

for on our directly those interested to now The ASH you information, are in titles more in are For website. posters the press on release the those of of website the abstracts. abstracts the and linked the posters

final will the have and Greg one as who XXXX, Officer, turn XXX active to Chief So XXX a with our three for XXX we for clinical make during to to note, for two quarter. call over happen. this one INDs, the active are results trials, XXX. And will Mr. we Chow plan I now eager in and and two one review Financial

Gregory Chow

Bill Thank everyone. good you, afternoon and

This which note million efficient Aptose access agreed obligation whatsoever. which to to the It into is our any XX. is Purchase price preclinical issuance into we under Common clinical down and advance and at in capital First, provides recent to is facility Aptose opportunistic is upon control warrants milestones. the with let Capital, me address Aptose entered $XX.X regarding our draw important October with Aspire Shares transaction to that on with no an of and Agreement our in common full no stock sale, announcement of

no In first there restrictions on refusal, financial covenants liquidated of on right are damages. or rights, future penalties or and limitations financings there are participation addition, proceeds, no to use

anytime the this We ability without cancel have agreement also to penalty. at

Canadian a currency dollars, in compared ended cash or CAD$XX.X and and our $XX.X million with or reporting reminder is US$XX.X financials XX, that million at quarter the the equivalents XXXX. to the million to we in cash CAD$XX.X and on Now, investments million quick June

$X.X we approximately cash have compared with of of into our the QX utilized facility we X lowest use September the capital XXXX. XXXX. been available CAD$X.X XX, of ended million has during extended operating million activities in ATM our quarter, Cowen, Aptose, the months cash our During cost which Through the with to runway

Research Moving we the statement, months the on for quarter ended income development were ended compared no XXXX. three CAD$X.X million expenses and XX, three XXXX. to September for XX, to month in revenues had CAD$X.X million the September

were spend increased, due XXX decrease on a CAD$X.X with associated and and quarter months and cost due LALS/Moffitt comparable to XX, total expenses program quarter Although decreased XXX the the cancellation R&D collaboration. the General lower of administrative to CAD$X.X headcount XXXX. due for compensation. ended to to million three salaries lower compared million lower stock-based reduced September the the This over is for mainly

share for Rice. call CAD$X loss per was or to quarter net in of September our I the $X.XX Finally, to CAD$X.X ended will million Dr. turn three back XXXX. months or XX, loss $X.XX share now the the million a compared per over

William Rice

Greg. you, I to Thank for the like questions. open would call

introduce please question. could you if operator, the So first

Operator

first Your John of question of Canaccord from Instructions] [Operator comes line Genuity. Newman

open. is line Your

John Newman

taking for Thanks the question.

as when in do So drug you mentioned clinic, you in am quarter clinic back as start you initiate I terms XXX the if be in before where sort hopefully if pickup new back into will to dose of will or the dosing Bill, you the off of Thanks. I just curious you first end where of the range? a will ’XX left at will the you am the put curious just

WilliamRice

Hi, question. for Thanks the John.

of prior levels you plasma Even Xx if product formulation. an earlier. to formulation, had this it’s relative IV will this exposure we found manufactured the So in though recall, we drug the formulation

the that of to So, assume this the with levels allows us that the mgs going of Xx have doses squared. to maintain equivalent which That we was when XX higher new the level most earlier. drug per lower is original batch we started will be exposure start product. drug. manufactured level, true, level relative likely would third this much also to lowest meter of at If that’s We

is the Xx is that to batch to if than now. that are we even this recommendation. supply, it at make Xx, it this faster will and we is our those we higher dose. if assumption able actually and still that dose us and FDA So, studies rat truly repeat we a for the then If true, that Once will take we escalate levels next when had determine started the allows manufacture exposure clinical PK to

it have we happy clinics soon in and those back we very we So, your progress answers made. us We question. Hope get think positions are with to that well. hope the that

John Newman

Yes. And looking other on if you is just the AML just those that’s continue I just at this am any and at focused going two? you types tumor plan to or at this to MDS, wondering the point if with are work say XXX plan in point on

WilliamRice

AML that mentioned, are behind the a believe But ongoing active drug have I Well, we have in tumor tumor of going little of have the and our in mutations will open. one we would trial going quickly indication so the multiple is focus I on December have there is as possible. mentioned coy we a very for certain be released in it, as solid into have large as We because a scientific And that’s or solid have this already it but that’s drive to Those when which MDS, immediate indications. occur very that X, instance, we lethal trial specific this, on synthetic be scenes. we lot opportunities. in because bit tumor XXX to I and a presented market be to be indication studies that cells.

that mutation are another pursue very specific not although a those tumors. is is partnership The really clear occurs it activity solid a known. we do that So, with there company, market type large might with case but – it’s if in going where known trials we to of but in a are that

there. the marrow there side bone to oral also pursue Also path cause future. activity develop along we this that not an a into is suppression and does potentially as will drug real therapeutic the believe Our

plans those XXX. So, our are with

John Newman

Okay, great. Thanks.

WilliamRice

Thanks John.

Operator

Thank you.

ROTH. line Our next from of the [indiscernible] question comes of

Your open. line is

Unidentified Analyst

Thanks Bill. the Hi, Greg. taking the congrats progress Hi, for with on you. Thank question XXX. and

So, both they questions. of my about questions XXX macro are and are

right to to is targeted agents. just other one, is but a agents add-on first starting that viable the look now midostaurin not another and chemo, So, FLTX for it’s there chemo combo out

there earlier gives the in now right advantage development, an development. bit guys you little their agents agent seem combined with FLTX which out in So, on a

there seen just to from maybe or have So I I strategic follow-up. was you targeted your synergies standpoint? considering are fueling are agents other agents I that that striking And that guess ask a going a have and then between

WilliamRice

So, you other are along, combination the to chemo agents low-dose they FLTX are be inhibitors right, with the in available midostaurin was going approved, somewhat restricted to but coming drug. cytarabine with other

So, it’s pickup great a on you.

so coming abstracts in daunorubicin. Bcl-X presented Also, that inhibitors. this available and going ASH it’s Mcl-X So, to now brimonidine will presented on of cytarabine, are be is other molecules going presented, along, data at some for the be to instance inhibitor, inhibitor, be

other them I am have all very molecules activity careful seen impressive. very are combination say and of is nice some So, synergy. we with of to types these

So, index many But activity. to of really performed sufficient combination actually these in replicates patients are samples unable number and enhanced of from get were studies those. a we from We you combined get numbers see well. to AML marrow bone

idarubicin we there not all the brimonidine and reluctant and can inhibitors out but when to cytarabine, activity the am names, you say combine impressive going enhanced say I it am inhibitors. I the Mcl-X daunorubicin, saw Bcl-X So, again use say really to I synergy,

So, the far. so that ones are have we those done

that’s we and out backbone come daunorubicin, available those yes, cytarabine available, – already synergistic of So, with and as are and know there currently are we that’s online the those. those some

they cell Jyoti lines. Thanks, ones question? your for those your as along. second We And one, with the other come What’s have then question? first the what’s done also second

Unidentified Analyst

is FLTX of second clinically. the And the myeloid directions you. perhaps, among about and two arms the biology, then BTK the activity of others it the the Thank towards different question lymphoid and the taking

Phase can of to I X move is understand this assume in – from clinic, that one expansion as that of year is be a Phase and or next the the I it, positioning towards there do way Phase you in fields else So the would the or move a cohorts and all BTK other you that events extrapolation. but for a could not X purely much FLTX as X, you Are terms some that forward skew equal strategic that with there you watch on standpoint efficacy? in could the

WilliamRice

it’s a question. complex Yes,

are So, potent mutant because cell of very we activity it but we definitely inhibit well we have across forms going because patient and restrict not AML to AML range inhibit all AML, after FLTX-ITD we of a lines. the FLTX patients, am seen I the of going samples as as FLTX,

in ASH of some data come broad the and AML. is at think are to we out impressive really going I how it activity have

FLTX are coming there should along we we if outcompete to activity. we are because than broader have inhibitors, even and FLTX be we them, more that able inhibitor So competitors think a are the

So, up. think will I that open

from AML, right going FLTX-ITD we now, to have the in that’s patients So, patients. AML, refractory our into resistant AML don’t be in dose they are standpoint, but the all-comers escalation

go So, something data see we that into plan patients. the the But terrific particular expansion we we after population, we in different. in if the move phase, if see to but FLTX-ITD will would all

are aware cytarabine, just that they well of population have we this For standard out and care can’t population instance, of you daunorubicin. there the the handle

handle be that patients well with that profile So, drugs. minimize those population, other are other can population. it cannot taken safety believe it be that to their because effective, If and great does we drugs to patient the truly combine drugs fragile believe the demonstrate would it we ours the toxicity the will,

to The some respond I the drug bone but again, we level resistance. patients the because do are pathway, a not very as pathway, well. malignancies, especially in turned just B-cell see is tend marrow not inhibit the B-cell drug the more for CXXS, as a restrict off. form BTK ERK the the as this of you if of patients BTK pathways of of inhibitor you we mutant that ERK the potently get to do for want as downstream very maintain Now, important that BTK, well malignancies,

a look CLL all patients, of malignancies B-cell BTK to do So, wild-type It’s those this mutant to some also. at want ultimately after in of we don’t and look variety and that bandwidth other that CLL forms we point. to have of just have we at would would the go the patients, those

inhibitors. initially, So we and see there to their opens us refractory inhibitors of profile look patients, mutants. BTK that showing to really us are BTK go all afterwards. the that But they than then want the CLL on these in also relapsed activity go are data, window of CXXS and the profile ahead that that from into other focus they of it at patients the for non-covalent those, maybe would the a in also data focus then after if emerged If safety are the compounds take those to exclusively be interesting other

may want lot sure So, learn that I seen one mention TRK. will there there recently a a inhibitor, really just going thing thoughts, am also deal you couple is around announced a TRK forward. – of I but we to have other our is

but talked many yet It’s also that TRK really there hopefully answer, longwinded kinase, also of perspective lines because that are us. how will much, a it potent inhibitor of give for with you and therapy are opens a haven’t but familiar a up other about not the we view We it. we that people

Unidentified Analyst

ASH. at you. Thank See Great. you

WilliamRice

then. you See

Operator

Our of Wainwright. Instructions] line the of question Joe next from Pantginis comes H.C. [Operator you. Thank

open. Your is line

Pete Stavropoulos

for is filling in Stavropoulos this Pete Joe. Hi,

WilliamRice

Pete. Hi,

Pete Stavropoulos

upcoming I that you ASH tox quarter. to progress quick XXX. you of doing? Hi, this With made expect how solidify the to of the important long are questions. a on animal couple profile have form preclinical do take? an the Congratulations So, studies said, like seems how you further

WilliamRice

this to can are that IND. so have dosing to I don’t you to – What good, the do on studies typically be are takes we to before have going data. is months in XX-day I but It there X the we depending dosing to it’s the is continuous performed say X levels go mean patients. of want certain that

all a do You to wanted then in follow-up. in-life. have the portion, of have the to you Again, life that’s typically

histopath longest clinpath takes You samples, time. the time. then We it’s the expect all have collect and don’t emerge, that just but perform the to any to take problems clinpath, it studies

studies shorter can we So, be those X know. be on to writing for clinical can do never there, anywhere everything but the protocols will for you reports, X we it you you to be hope in it’s going timeframe X get the I have can’t already we the written it going the populations just in typically to months are in that parallel that up months, tell but after. We the IND. patient

IND than So while to we it wheels, I time generated waiting in but time. things took been properly it we these expected. we those be just of takes many say, move have they API be forward have been, the and do don’t hopefully to parallel, It the want allow for studies, other spinning but studies enabling on and are have more site the and our to quickly done us to

Pete Stavropoulos

coverage an targeting IND And malignancies? thanks. and initial Alright, for broad with B-cell a AML

WilliamRice

as in AML different and IND, entry as just one be of very we yes, and undergo trials, but separate to have criteria. a well one patients because CLL, in sick exclusion to tend two would be so have you Well, careful single there. AML

if would with so in IND different in be versus never but malignancies, a AML one one trials, in patients, single separate the yes, You CLL. and heme the safety other AML know people two

Pete Stavropoulos

very thank Alright, much. you

WilliamRice

you. Thank

Operator

Dr. over closing for now turn I showing call will no currently questions. remarks. I to back And the further Rice am

William Rice

would Aptose to as we clinic about, create the just and shareholder to with today trials value like next Well, thank Alright. beyond. well for everyone positioned spoke plan perform year is us XXXX and potentially three I joining to separate the to two taken throughout compounds we clinical believe

and pleased recently hope are interest our and of visibility. level and stockholders their seeing hard are our the thank innovation. Street expand with We work and to continue collaborators We your for from we new the employees we support for to our

We progress space. you greatest conference from greatly have a operator, with conclude of you some great the evening. working the the and hematologic everyone on we I mentioned would And thank look we the before, our business. forward to As minds have I to allow and of communicating benefit with in call

Operator

ladies concludes That today’s and you, Thank gentlemen. conference.

You a may all disconnect and wonderful have day.