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What changed in Moleculin Biotech, Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Moleculin Biotech, Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+534 added−434 removedSource: 10-K (2024-03-22) vs 10-K (2023-03-22)

Top changes in Moleculin Biotech, Inc.'s 2023 10-K

534 paragraphs added · 434 removed · 282 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

155 edited+182 added−92 removed219 unchanged
Biggest changeWP1066 IND approved for GBM 1 Exploring for an investigator to lead a study Trial has not begun Trial has not begun Trial has not begun WP1066 in combination with radiation IIT / Adult GBM / US 2 External Expect to begin recruiting in 2023 To be led by investigator with prior experience with WP1066 Trial has not begun Trial has not begun WP1066 IIT / Pediatric Brain Tumors / US 1 External Concluded in February 2023 with a dose level at 8mg/kg Concluded 10 subjects enrolled and treated over 3 dose levels up to 8 mg/kg No drug related serious adverse events noted 1 DIPG subject had a temporary clinical response WP1220 MB-201 / CTCL / Poland 1b / Proof of Concept Concluded and CSR completed Believe results warrant a Phase 2 study Met safety endpoints 60% of subjects documented PR WP1122 MB-301 / COVID-19 / UK 1a Completed and CSR in process; Established RP2D Drug at RP2D was tolerable and safe Met safety endpoints N/A as in healthy volunteer subjects WP1122 IND approved for GBM 1b/2 External Exploring for an investigator to lead a study Trial has not begun Trial has not begun Trial has not begun 3 This is a summary of the detailed discussion below and does not include compassionate use/right-to-try usage of our drug candidates.
Biggest changeWP1066 IND cleared for GBM 1 Open to an investigator to lead a study Trial has not begun Trial has not begun Trial has not begun WP1066 in combination with radiation IND allowed for Adult GBM / US 2 External Open to an investigator to lead a study Used as reference for next trial Trial has not begun Trial has not begun WP1066 in combination with radiation therapy IND allowed for IIT led Adult GBM / US 1B/2 External Investigator expected to begin recruiting in 2024 Trial has not begun Trial has not begun Trial has not begun WP1066 IIT / Pediatric Brain Tumors / US 1 External Concluded in February 2023 with a dose level at 8mg/kg Concluded 10 subjects enrolled and treated over 3 dose levels up to 8 mg/kg No drug related serious adverse events noted 1 DIPG subject had a temporary clinical response WP1220 MB-201 / CTCL / Poland 1B / Proof of Concept Concluded and CSR completed Believe results warrant a Phase 2 study Met safety endpoints 60% of subjects documented PR WP1122 MB-301 / COVID-19 / UK 1A Completed; Established RP2D Drug at RP2D was tolerable and safe Met safety endpoints N/A as in healthy volunteer subjects WP1122 IND approved for GBM 1B/2 External Exploring for an investigator to lead a study Trial has not begun Trial has not begun Trial has not begun Notes for Table 1 : 1) In MB-104 MLFS means "morphological leukemia-free state"; 2) In MB-105 we consider complete responses (CR) or complete response with incomplete recovery of the bone marrow (CRi) as where the bone marrow aspirate (BMAs) show leukemic blasts of less than 5%; 3) This is a summary of the detailed clinical discussion below and does not include compassionate use/right-to-try usage of our drug candidates; 4) Complete Response Composite (CRc) includes CRs and CRis; 5) Overall Response Rate (ORR) includes CRc and Partial Response (PR); 6) “Met safety endpoints” means that no drug-related serious and unexpected adverse events occurred as defined in the trial protocol 7) All data presented are preliminary unless a CSR or an investigator's final report has been issued for the trial referenced - specifically the data for MB-106 and MB-107 are preliminary and subject to change; 8) With regard to safety and human activity summaries please see the detailed discussion below; 9) MB-106 Phase 1 included “all-comers” or subjects with unlimited lines of prior therapy while Phase 2 included only subjects as 1 st thru 3 rd line of therapy, and 10) MB-107 Phase 2 has no ongoing treatment active and is following nine of fifteen subjects for overall survival (OS). 4 Table of Contents In the US and Europe, since our inception, we or independent investigators have approval to begin, are currently conducting or have completed thirteen internally or externally funded clinical trials for four of our drug candidates – Annamycin, WP1066, WP1220, and WP1122, as listed above.
And, in part because of the emphasis placed on alternatives to chemotherapy, we believe that not enough has been done to improve chemotherapeutic agents to make them safer, especially with regard to cardiotoxicity (damage to the heart), and more effective.
In part, because of the emphasis placed on alternatives to chemotherapy, we believe that not enough has been done to improve chemotherapeutic agents to make them safer, especially with regard to cardiotoxicity (damage to the heart), and more effective.
WP1066 has shown significant anti-tumor activity and increased survival in a wide range of tumor cell lines and animal models. As with other analogs in this portfolio, WP1066 also has a demonstrated in animal models the ability to boost a natural immune response to tumor activity.
WP1066 has shown significant anti-tumor activity and increased survival in a wide range of tumor cell lines and animal models. As with other analogs in this portfolio, WP1066 also has demonstrated in animal models the ability to boost a natural immune response to tumor activity.
An early 2021 study in India of 2-DG in COVID-19 subjects was conducted by the Institute of Nuclear Medicine and Allied Sciences (INMAS), a lab of Defense Research and Development Organization (DRDO), in collaboration with Dr Reddy's Laboratories (DRL), Hyderabad, India.
An early 2021 study in India of 2-DG in COVID-19 subjects was conducted by the Institute of Nuclear Medicine and Allied Sciences (INMAS), a lab of the Defense Research and Development Organization (DRDO), in collaboration with Dr Reddy's Laboratories (DRL), Hyderabad, India.
Any agency or judicial enforcement action could have a material adverse effect on us. 17 Table of Contents Development and Approval The process required by the FDA before a pharmaceutical product may be marketed in the US generally involves the following: • Completion of preclinical laboratory tests, animal studies and formulation studies; • Submission to the FDA of an Investigational New Drug application, or IND, which must become effective before human clinical trials may begin; • Performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as good clinical practices (GCP) and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed pharmaceutical product for its intended use; • Submission to the FDA of an NDA for marketing approval that includes substantial evidence of safety and effectiveness from results of clinical trials, as well as the results of preclinical testing, detailed information about the chemistry, manufacturing and controls, and proposed labeling and packaging for the product; • Review of the product candidate by an FDA advisory committee, if applicable; • Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the pharmaceutical product is produced, to assess compliance with current good manufacturing practice, or cGMP, requirements, to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical product’s identity, strength, quality and purity; • Potential FDA audit of the preclinical and clinical trial sites that generated the data in support of the NDA; and • FDA review and approval of the NDA, including agreement on post-marketing commitments, if applicable.
Any agency or judicial enforcement action could have a material adverse effect on us. 20 Table of Contents Development and Approval The process required by the FDA before a pharmaceutical product may be marketed in the US generally involves the following: • Completion of preclinical laboratory tests, animal studies and formulation studies; • Submission to the FDA of an Investigational New Drug application, or IND, which must become effective before human clinical trials may begin; • Performance of adequate and well-controlled human clinical trials according to the FDA’s regulations commonly referred to as good clinical practices (GCP) and any additional requirements for the protection of human research subjects and their health information, to establish the safety and efficacy of the proposed pharmaceutical product for its intended use; • Submission to the FDA of an NDA for marketing approval that includes substantial evidence of safety and effectiveness from results of clinical trials, as well as the results of preclinical testing, detailed information about the chemistry, manufacturing and controls, and proposed labeling and packaging for the product; • Review of the product candidate by an FDA advisory committee, if applicable; • Satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the pharmaceutical product is produced, to assess compliance with current good manufacturing practice, or cGMP, requirements, to assure that the facilities, methods and controls are adequate to preserve the pharmaceutical product’s identity, strength, quality and purity; • Potential FDA audit of the preclinical and clinical trial sites that generated the data in support of the NDA; and • FDA review and approval of the NDA, including agreement on post-marketing commitments, if applicable.
We make available, free of charge, on our corporate website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after they are electronically filed with the Securities and Exchange Commission (SEC).
We make available, free of charge, on our corporate website, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as soon as reasonably practicable after they are electronically filed with the SEC.
The spread of COVID-19 caused significant volatility in US and international markets, including Poland, where we conduct some of our clinical trials, and Italy, where our Annamycin drug supply is produced. In 2022, there was limited temporary interruption of our drug supply, and the ability to monitor activities were limited at most Polish clinics where we are conducting trials.
The spread of COVID-19 caused significant volatility in US and international markets, including Poland, where we conduct some of our clinical trials, and Italy, where our Annamycin drug supply is produced. In 2022, there was limited temporary interruption of our drug supply, and the ability to monitor activities was limited at most Polish clinics where we are conducting trials.
It should be noted that, in the United States, these are not approved by the FDA for the treatment of AML patients and there remains no effective therapy for these patients or for relapsed or refractory AML, with the exception of some recently approved targeted therapies that have demonstrated a low level of activity for limited subgroups of AML patients.
It should be noted that, in the United States, the latter are not approved by the FDA for the treatment of AML patients and there remains no effective therapy for these patients or for relapsed or refractory AML, with the exception of some recently approved targeted therapies that have demonstrated a low level of activity for limited subgroups of AML patients.
Some jurisdictions, including the US and countries belonging to the European Patent Convention, will extend the expiration of an unexpired patent for an approved pharmaceutical product by some portion of time required for clinical development and regulatory review. We intend to seek patent term extensions for patents for our product candidates where available.
Some jurisdictions, including the US and countries belonging to the European Patent Convention, will extend the expiration of an unexpired patent for an approved pharmaceutical product by some portion of time required for clinical development and regulatory review. We intend to seek patent term extensions for patents claiming our product candidates where available.
We cannot be certain that any of our product candidate’s will qualify for patent term restoration or, if so, for how long the patent term will be extended. Pharmaceutical Coverage, Pricing and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any pharmaceutical product candidates for which we may obtain regulatory approval.
We cannot be certain that any of our product candidates will qualify for patent term restoration or, if so, for how long the patent term will be extended. Pharmaceutical Coverage, Pricing and Reimbursement Significant uncertainty exists as to the coverage and reimbursement status of any pharmaceutical product candidates for which we may obtain regulatory approval.
An industry recognized data source in late 2020 estimated that the incidence rate of primary malignant brain and central nervous system tumors in the US is 7.4 cases per 100,000 person-years. This translates to an incidence of approximately 20,000 cases of malignant brain cancer per year.
An industry recognized data source in late 2020 estimated that the incidence of primary malignant brain and central nervous system tumors in the US is 7.4 cases per 100,000 person-years. This translates to an incidence of approximately 20,000 cases of malignant brain cancer per year.
These promising findings correlate with a high uptake of Annamycin to the lungs in animal models. We found in our studies that the Annamycin uptake is over 30-fold higher than that of doxorubicin, the primary first-line chemotherapy for soft tissue sarcoma.
These promising findings correlate with a high uptake of Annamycin to the lungs in animal models. We found in our studies that Annamycin uptake to the lungs is over 30-fold higher than that of doxorubicin, the primary first-line chemotherapy for advanced soft tissue sarcoma.
Royalty payments can range in the single digits as a percent of net sales on drug products or flat fees as high as $0.6 million, depending upon certain terms and conditions. Not all of these payments are applicable to every drug. Total expenses under these agreements we re $0.3 million for the years ended December 31, 2022 and 2021, respectively.
Royalty payments can range in the single digits as a percent of net sales on drug products or flat fees as high as $0.6 million, depending upon certain terms and conditions. Not all of these payments are applicable to every drug. Total expenses under these agreements we re $0.3 million for the years ended December 31, 2023 and 2022, respectively.
ITEM 1. BUSINESS Our Business We are a clinical stage pharmaceutical company with a growing pipeline, including Phase 2 clinical programs for hard-to-treat cancers and viruses.
ITEM 1. BUSINESS BUSINESS Our Business Summary We are a clinical stage pharmaceutical company with a growing pipeline, including Phase 2 clinical programs for hard-to-treat cancers and viruses.
Other targeted therapies are currently in clinical trials, as well as other approaches that include immunotherapy relying on other biomarkers, other attempts at improved chemotherapy and alternative approaches to radiation therapy.
Other targeted therapies are currently in clinical trials, as are other approaches that include immunotherapy relying on other biomarkers, other attempts at improved chemotherapy and alternative approaches to radiation therapy.
We may also compete with these organizations to recruit scientists and clinical development personnel. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. The unmet medical need for more effective cancer therapies is such that oncology drugs are one of the leading class of drugs in development.
We may also compete with these organizations to recruit scientists and clinical development personnel. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. The unmet medical need for more effective cancer therapies is such that oncology drugs are one of the leading classes of drugs in development.
A drug that receives FTD is eligible for some or all of the following: • More frequent meetings with FDA to discuss the drug's development plan and ensure collection of appropriate data needed to support drug approval; • More frequent written communication from FDA about such things as the design of the proposed clinical trials and use of biomarkers; • Eligibility for other FDA expedited programs, if relevant criteria are met; and • Rolling review by FDA of the NDA, rather than waiting until every section of the NDA is complete before beginning review of the application, which is the typical process.
A drug that receives Fast Track-Designation (FTD) is eligible for some or all of the following: • More frequent meetings with FDA to discuss the drug's development plan and ensure collection of appropriate data needed to support drug approval; • More frequent written communication from FDA about such things as the design of the proposed clinical trials and use of biomarkers; • Eligibility for other FDA expedited programs, if relevant criteria are met; and • Rolling review by FDA of the NDA, rather than waiting until every section of the NDA is complete before beginning review of the application, which is the typical process.
WP1066 is our most published asset (over 50 peer reviewed articles), and we believe it is one of very few drug candidates in the market focused on the inhibition of p-STAT3, and that its mechanism of action is unique. Clinical research on WP1066 is currently focused on the treatment of adult GBM and childhood brain tumors, including DIPG.
WP1066 is our most published asset (over 50 peer reviewed articles), and we believe it is one of very few drug candidates in the development focused on the inhibition of p-STAT3, and that its mechanism of action is unique. Clinical research on WP1066 is currently focused on the treatment of adult GBM and childhood brain tumors, including DIPG.
Although the lungs tend to be a major site of relapse, when we began our own clinical trial using Annamycin against STS lung metastases, we were aware of only a very few active clinical trials specifically targeting STS lung metastases, indicating that Annamycin currently faces limited competition in this area of development.
Although the lungs tend to be a major site of relapse, when we began our own clinical trial MB-107 using Annamycin against STS lung metastases, we were aware of only a very few active clinical trials specifically targeting STS lung metastases, indicating that Annamycin currently faces limited competition in this area of development.
With this IND now cleared, we plan to seek a partner to conduct an externally funded Phase 1 open label, single arm, dose escalation study of the safety, pharmacokinetics and efficacy of oral WP1122 in adult subjects with GBM. Such a trial would enable parallel development of WP1122 as a cancer therapy.
With this IND cleared, we seek a partner to conduct an externally funded Phase 1 open label, single arm, dose escalation study of the safety, pharmacokinetics, and efficacy of oral WP1122 in adult subjects with GBM. Such a trial would enable parallel development of WP1122 as a cancer therapy.
Additionally, when looking at median overall survival (OS) for the mice in the study, AnnAraC demonstrated a 68% improvement in the OS compared to Annamycin as a single agent and a 241% increase in OS compared to Cytarabine alone. We believe these experiments support initiation of clinical development of the combination of Annamycin and Ara-C in AML patients.
Additionally, when looking at median overall survival (OS) for the mice in the study, AnnAraC demonstrated a 68% improvement in the OS compared to Annamycin as a single agent and a 241% increase in OS compared to Cytarabine alone. We believe these experiments supported initiation of clinical development of the combination of Annamycin and Ara-C in AML patients.
Taken together, these factors suggest that Annamycin could represent an important treatment to help address a significant unmet need in patients with STS lung metastases. In February 2021, we announced that a preclinical study in animals has suggested a possible significant therapeutic benefit of Annamycin against metastatic osteosarcoma.
Taken together, these factors suggest that Annamycin could represent an important treatment to help address a significant unmet need in patients with STS lung metastases. In February 2021, we announced that a preclinical study in animals had suggested a possible significant therapeutic benefit of Annamycin against metastatic osteosarcoma.
We have three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial 1 , based substantially on discoveries made at and licensed from MD Anderson Cancer Center (MD Anderson) in Houston, Texas.
We have three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial, based substantially on discoveries made at and licensed from the University of Texas MD Anderson Cancer Center (MD Anderson) in Houston, Texas.
These data were presented at the 62nd Annual Meeting & Exposition of the American Society for Hematology (ASH) under the title: "High Efficacy of Liposomal Annamycin (L-ANN or L-Annamycin) in Combination with Cytarabine (AnnAraC) in Syngeneic p53-null AML Mouse Model." 7 Table of Contents This study was conducted in a highly aggressive AML mouse model where median survival is approximately 13 days.
These data were presented at the 62nd Annual Meeting & Exposition of the American Society for Hematology (ASH) under the title: "High Efficacy of Liposomal Annamycin (L-ANN or L-Annamycin) in Combination with Cytarabine (AnnAraC) in Syngeneic p53-null AML Mouse Model." This study was conducted in a highly aggressive AML mouse model where median survival is approximately 13 days.
Although we periodically monitor the FDA compliance of our third-party manufacturers, we cannot be certain that our present or future third-party manufacturers will consistently comply with cGMP and other applicable FDA regulatory requirements. 20 Table of Contents Discovery of problems with a product after approval may result in restrictions on a product, manufacturer or NDA sponsor, including withdrawal of the product from the market.
Although we periodically monitor the FDA compliance of our third-party manufacturers, we cannot be certain that our present or future third-party manufacturers will consistently comply with cGMP and other applicable FDA regulatory requirements. Discovery of problems with a product after approval may result in restrictions on a product, manufacturer or NDA sponsor, including withdrawal of the product from the market.
This forms a unique dual action (directly attacking the transcription factors that support tumor development and separately boosting the natural immune response to tumors) that may make WP1066 uniquely suited to treat a wide range of tumors and may also serve as an important element in combination therapies targeting some of the most difficult cancers.
This forms a unique dual action (directly attacking the transcription factors that support tumor development and separately boosting the natural immune response to tumors) that may make WP1066 well suited to treat a wide range of tumors and possibly also serve as an important element in combination therapies targeting some of the most difficult cancers.
This therapy had not improved since it was first used in the 1970s and we estimate that this induction therapy had a success rate of about 20% to 25%. A revision to this therapy was approved in the form of a drug called Vyxeos, which involves combining Cytarabine and an anthracycline (daunorubicin) into a single liposomal injection given 3 times.
This therapy had not improved since it was first used in the 1970s and we estimate that this induction therapy had a success rate of about 20% to 25%. A revision to this therapy was approved in the form of a drug called Vyxeos, which combines Cytarabine and an anthracycline (daunorubicin) into a single liposomal injection given 3 times.
The 80% of non-resectable pancreatic cancers are typically treated with chemotherapy and other pharmacotherapies. Global sales of drugs used for the treatment of pancreatic cancer, including Abraxane, Lynparza and Tarceva, exceeded $3 billion in 2020, though this figure includes sales for treatment of other cancers as well. Abraxane will become generic in 2023 which should impact this number.
The 80% of non-resectable pancreatic cancers are typically treated with chemotherapy and other pharmacotherapies. Global sales of drugs used for the treatment of pancreatic cancer, including Abraxane, Lynparza and Tarceva, exceeded $3 billion in 2020, though this figure includes sales for treatment of other cancers as well. Abraxane became generic in 2023 which should impact this number.
Anthracyclines are a class of chemotherapy drugs designed to destroy the DNA (by creating iron-mediated free oxygen radicals, damaging the DNA and cell membranes, and inhibiting topoisomerase II) of rapidly reproducing cancer cells. Acute leukemia is one of a number of cancers that are usually treated with anthracyclines.
Anthracyclines are a class of chemotherapy drugs designed to destroy the DNA (by creating iron-mediated free oxygen radicals, damaging the DNA and cell membranes, and inhibiting topoisomerase II) of rapidly reproducing cancer cells. Acute leukemia is one of a number of cancers that are usually treated with anthracyclines in "fit" patients.
In July 2021, we formed Moleculin Amsterdam B.V., a wholly owned subsidiary, primarily to act as our legal representative for clinical trials in Europe for Moleculin Biotech, Inc. Competition We operate in a highly competitive segment of the pharmaceutical market, which market is highly competitive as a whole.
In July 2021, we formed Moleculin Amsterdam B.V., a wholly owned subsidiary, primarily to act as our legal representative for clinical trials in Europe for Moleculin Biotech, Inc. 19 Table of Contents Competition We operate in a highly competitive segment of the pharmaceutical market, which market is highly competitive as a whole.
Post-approval modifications to a drug product, such as changes in indications, labeling or manufacturing processes or facilities, may require development and submission of additional information or data in a new or supplemental NDA, which would also require prior FDA approval. 19 Table of Contents Regulatory Exclusivities.
Post-approval modifications to a drug product, such as changes in indications, labeling or manufacturing processes or facilities, may require development and submission of additional information or data in a new or supplemental NDA, which would also require prior FDA approval. Regulatory Exclusivities.
This is in a subject population where the median progression free survival time in patients with soft tissue sarcoma with metastases (not just lung metastases) that have failed initial systemic therapy is approximately 1.6 to 2.0 months, without effective therapy which includes subjects treated with a placebo. (A. Comandone, F. Petrelli, A Boglione, S.
This is in a subject population where the median progression free survival time in patients with soft tissue sarcoma with metastases (not just lung metastases) that have failed initial systemic therapy has been documented to be approximately 1.6 to 2.0 months, without effective therapy which includes subjects treated with a placebo. (A. Comandone, F. Petrelli, A Boglione, S.
We have obtained Orphan Drug designation (ODD) from the FDA for Annamycin for the treatment of AML and STS; for WP1066 for the treatment of GBM; and, for WP1122 for the treatment of GBM. We have other FDA designations as discussed below. Detailed discussion of potentially relevant regulatory exclusivities can be found under Regulatory Exclusivities below.
We have obtained ODD from the FDA for Annamycin for the treatment of AML and STS; for WP1066 for the treatment of GBM; and, for WP1122 for the treatment of GBM. We have other FDA designations as discussed below. Detailed discussion of potentially relevant regulatory exclusivities can be found under Regulatory Exclusivities below.
We believe that a significant unmet need remains for early stage (Stages IA through IIA) CTCL, and therefore, we believe a meaningful opportunity exists for WP1220. Market for Our WP1122 Portfolio Certain cancers depend heavily on glycolysis and glycosylation for growth and survival. Additionally, viruses depend on glycolysis and glycosylation for infectivity and replication.
We believe that a significant unmet need remains for early stage (Stages IA through IIA) CTCL, and therefore, we believe a meaningful opportunity exists for WP1220. 18 Table of Contents Market for Our WP1122 Portfolio Certain cancers depend heavily on glycolysis and glycosylation for growth and survival. Additionally, viruses depend on glycolysis and glycosylation for infectivity and replication.
The IRB also approves the informed consent form that each study subject (or his or her legal representative) must sign, and is responsible for monitoring the conduct of the study until completed. Clinical testing.
The IRB also approves the informed consent form that each study subject (or his or her legal representative) must sign, and is responsible for monitoring the conduct of the study until completed. 21 Table of Contents Clinical testing.
Although Annamycin has already shown human activity as a single agent in its two Phase 1 AML clinical trials and has shown no signs of cardiotoxicity, the observed synergy in vitro and confirmatory in vivo data suggest that the AnnAraC could be more effective in a clinical setting than Annamycin as a single agent.
Although Annamycin had already shown human activity as a single agent in its two Phase 1 AML clinical trials and had shown no signs of cardiotoxicity, the observed synergy in vitro and confirmatory in vivo data suggested that the AnnAraC could be more effective in a clinical setting than Annamycin as a single agent.
In the animal model recommended by the FDA as an indicator of human cardiotoxicity, the non-liposomal (free) form of Annamycin has been shown to be significantly less likely than doxorubicin to create heart lesions in mice, and the liposomal formulation (L-Annamycin) has been shown in these same models to have reduced cardiotoxicity.
In the animal model recommended by the FDA as an indicator of human cardiotoxicity, the non-liposomal (free) form of Annamycin has been shown to be significantly less likely than doxorubicin to create heart lesions in mice, and the liposomal formulation (L-Annamycin) has been shown in these same models to further reduce cardiotoxicity.
A court decision in 2021 broadened the scope of ODE, but the ultimate impact of that decision is yet to be determined, as FDA has stated that it does not intend to apply the court decision to other products, and will instead continue to apply the narrower scope that has long been the agency’s approach.
A court decision in 2021 broadened the scope of ODE, but the ultimate impact of that decision is yet to be determined, as FDA has stated that it does not intend to apply the court decision to other products, and the agency has instead continued to apply the narrower scope that has long been the agency’s approach.
Annamycin Clinical Trials – STS Lung Metastases We announced in April 2019 that our ongoing sponsored research at MD Anderson demonstrated that Annamycin can significantly improve survival in an aggressive form of triple negative breast cancer metastasized to the lungs in animal models.
Annamycin Clinical Trials – STS Lung Metastases We announced in April 2019 that our ongoing sponsored nonclinical research at MD Anderson demonstrated that Annamycin may improve survival in an aggressive form of triple negative breast cancer metastasized to the lungs in animal models.
In February 2023, the Emory trial for pediatric brain tumors concluded treating three subjects in the three cohorts of the Phase 1 dose escalation portion of physician-sponsored clinical trial for the treatment of pediatric brain tumors with WP1066. The third cohort dosing was deemed safe at 8mg/kg.
In February 2023, the Emory physician-sponsored clinical trial for the treatment of pediatric brain tumors with WP1066 concluded with treating a total of ten subjects in all three cohorts of the Phase 1 dose escalation portion of the trial. The third cohort dosing was deemed safe at 8mg/kg.
T he National Cancer Institute estimates that cancer-related direct medical costs in the US wer e $208.9 billion in 2020, which is likely an underestimate because it does not account for the growing cost of treatment; for example, the list price for many prescription medicines is now more than $100,000 annually.
The National Cancer Institute estimates that cancer-related direct medical costs in the US were $208.9 billion in 2020, which is likely an underestimate because it does not account for the growing cost of treatment; for example, the list price for many prescription medicines is now more than $100,000 annually.
AbbVie’s Venclexta is approved by the FDA in combination with a hypomethylating agent (azacitidine or decitabine) or low-dose AraC (LDAC) for the treatment of newly diagnosed AML in patients who are 75 years of age or older, or for those ineligible for intensive induction chemotherapy due to co-existing medical conditions.
In 2019, AbbVie’s Venclexta was approved by the FDA in combination with a hypomethylating agent (azacitidine or decitabine) or low-dose AraC (LDAC) for the treatment of newly diagnosed AML in patients who are 75 years of age or older, or for those ineligible (Un-Fit) for intensive induction chemotherapy due to co-existing medical conditions.
Our reference to the URL for our website is intended to be an inactive textual reference only. 22 Table of Contents
Our reference to the URL for our website is intended to be an inactive textual reference only. 26 Table of Contents
We intend to pursue additional study to build on this preclinical evidence and preliminary animal model data. Published research papers have presented several findings that may point to new opportunities for our WP1066 class of drugs.
We intend to pursue additional externally funded studies to build on this preclinical evidence and preliminary animal model data. Published research papers have presented several findings that may point to new opportunities for our WP1066 class of drugs.
Our median progression free survival (PFS) was 2.6 months for subjects receiving the study drug dose per the Phase 1 protocol. In the ongoing Phase 2 portion of the trial, we have demonstrated to date a preliminary response of 67% (4 of 6) subjects showing SD through 2 or more cycles.
Our median progression free survival (PFS) was 2.6 months for subjects receiving the study drug dose per the Phase 1 protocol. In the ongoing Phase 2 portion of the trial, we have demonstrated to date a preliminary response of 64% (9 of 14) of subjects showing SD through 2 or more cycles.
For more information about our license agreements, see Footnote 8 - Commitments and Contingencies included in our Consolidated Financial Statements set forth in this report. 15 Table of Contents We have a sponsored research agreement with MD Anderson that currently runs until the end of December 2024.
For more information about our license agreements, see Footnote 8 - Commitments and Contingencies included in our Consolidated Financial Statements set forth in this report. We have a sponsored research agreement with MD Anderson that currently runs until the end of December 2025.
As such, we may expand our clinical trials into these areas in the near term using externally funded trials. 8 Table of Contents In December 2020, the FDA allowed our IND to go into effect to study Annamycin for the treatment of soft tissue sarcoma lung metastases.
As such, we may expand our clinical trials into these areas in the near term using externally funded trials. MB-107 : In December 2020, the FDA allowed our IND to go into effect to study Annamycin for the treatment of soft tissue sarcoma lung metastases.
This US study’s CSR was issued in 2021. • In 2022 we completed our MB-105 Phase 1 single agent trial for Annamycin in AML with fifteen subjects receiving the full dose per the protocol and identifying an RP2D and we demonstrated an 80% ORR in the five subjects in the last cohort.
This US study’s CSR was issued in 2021. • AML: In 2022, we completed our MB-105 Phase 1 single agent trial for Annamycin in relapsed or refractory AML with fifteen subjects receiving the full dose per the protocol and identifying an RP2D and we demonstrated an 80% overall response rate (ORR) in the five subjects in the last cohort.
Drugs attempting to target a subset of AML patients who present with specific gene mutations, such as one referred to as FLT3, have recently received FDA approval, but by definition serve only subsets of the AML population.
Drugs attempting to target a subset of AML patients who present with specific gene mutations, such as IDH1, IDH2 and FLT3, have recently received FDA approval, but by definition serve only subsets of the AML population.
WP1066 WP1066 is our flagship Immune/Transcription Modulator. It has been the subject of over 50 peer-reviewed articles and its activity against p-STAT3 has now been validated in independent labs around the world. This discovery was inspired by a naturally occurring compound (caffeic acid) in propolis (from honeybees).
It has been the subject of over 50 peer-reviewed articles and its activity against p-STAT3 has now been validated in independent labs around the world. This discovery was inspired by a naturally occurring compound (caffeic acid) in propolis (from honeybees).
Our overall strategy is to seek the best value for our shareholders either via potential outlicensing or collaborative opportunities with other pharmaceutical companies with existing marketing, sales and distribution or via the development of contracted marketing, sales and distribution capability if and when our drugs are approved.
Additionally, we do not have a sales organization. Our overall strategy is to seek the best value for our shareholders either via potential outlicensing or collaborative opportunities with other pharmaceutical companies with existing marketing, sales and distribution or via the development of contracted marketing, sales and distribution capability if and when our drugs are approved.
A key consideration when treating AML patients is whether the patient is suitable for intensive therapy. The standard of care for the treatment of newly diagnosed AML patients who can tolerate intensive therapy is cytarabine in combination with an anthracycline (e.g., doxorubicin or daunorubicin), typically referred to as a “7+3” regimen.
The standard of care for the treatment of newly diagnosed AML patients who can tolerate intensive therapy is cytarabine in combination with an anthracycline (e.g., doxorubicin or daunorubicin), typically referred to as a “7+3” regimen.
Three of our six drug candidates have shown human activity in clinical trials and are currently in Phase 1b/2 or Phase 2 clinical trials. Since our inception, our drugs have been in, are currently in, or have received approval to proceed in eleven clinical trials.
Three of our six drug candidates have shown human activity in clinical trials and are currently or have been in Phase 1B/2 or Phase 2 clinical trials. Since our inception, our drugs have completed, are currently in, or have been permitted to proceed in thirteen clinical trials.
Beyond that, we believe it would have the added advantages that Annamycin has been shown in published research to be active against tumor cells resistant to doxorubicin and, importantly, has the potential to remove the concern for cardiotoxicity, a significant toxic side effect of currently used anthracyclines.
Beyond that, we believed it would have the added advantages that Annamycin has been shown in published research to be active against tumor cells resistant to doxorubicin and, importantly, has the potential to remove the concern for cardiotoxicity, a significant toxic side effect currently limiting the use of anthracycline-based intensive chemotherapy.
In addition, the Company also has Sponsored Research Agreements with other universities, one in the US and one in Europe. The expenses recognized under the agreements, mainly related to MD Anderson, were $1.1 million and $0.7 million for the years ended December 31, 2022 and 2021, respectively.
In addition, the Company also has Sponsored Research Agreements with other universities, one in the US and one in Europe. The expenses recognized under the agreements, mainly related to MD Anderson, wer e $0.8 m illion and $1.1 million for the years ended December 31, 2023 and 2022, respectively.
For purposes of these clinical trials, a CR means that the subject's BMA reduced to 5% or less with recovery of neutrophils (or white blood cells) and platelets, CRi means a CR where there was incomplete recovery of neutrophils and/or platelet counts, a PR means the subject's BMA reduced by 50% and resulted in a blast count of 25% or less, and a BT means subjects are deemed capable of progressing to a potentially curative bone marrow transplant.
For purposes of these clinical trials, a CR means that the subject's BMA reduced to 5% or less with recovery of neutrophils (or white blood cells) and platelets, CRi means a CR where there was incomplete recovery of neutrophils and/or platelet counts, and a PR means the subject's BMA reduced by 50% and resulted in a blast count of 25% or less.
This is a particularly significant risk for pediatric leukemia patients, whose life spans can be severely shortened by the induction therapy intended to cure them of acute leukemia.
The potential for cardiotoxicity in pediatric leukemia patients, whose life spans can be severely shortened by the induction therapy intended to cure them of acute leukemia, represents a significant risk.
Three of our drug candidates have shown activity in humans to date. • Annamycin has shown the following human activity: • Prior to 2021, our MB104 US Phase 1 trial for Annamycin in AML successfully met its safety endpoint (including the absence of cardiotoxicity) and demonstrated human activity in the reduction of circulating bone marrow blasts despite the trial being conducted at what were expected to be subtherapeutic dosages (not exceeding 120 mg/m2) based on the European AML study.
Three of our drug candidates have shown activity in humans to date. • Annamycin has shown human activity in AML and STS lung mets as follows: • AML: Prior to 2021, our MB-104 US Phase 1 trial for Annamycin as a single agent therapy in relapsed or refractory AML successfully met its safety endpoint (including the absence of cardiotoxicity) and demonstrated human activity in the reduction of circulating bone marrow leukemic blasts despite the trial being conducted at what were expected to be subtherapeutic dosages (not exceeding 120 mg/m2) based on the European AML study.
Metastatectomy and/or chemotherapy are the most common treatments offered to patients with metastatic sarcoma. Pulmonary metastatectomy, either video-assisted or through a formal thoracotomy, has been shown to increase overall survival in select populations of both osseous and soft tissue sarcoma patients. The market is expected to grow as a result of factors like an increase in the patient pool.
Metastatectomy and/or chemotherapy are the most common treatments offered to patients with metastatic sarcoma. Pulmonary metastatectomy, either video-assisted or through a formal thoracotomy, has been shown to increase overall survival in select populations of both osseous and soft tissue sarcoma patients.
Market for Annamycin Per the American Cancer Society, digestive, reproductive, breast and respiratory cancers comprise most of expected cancer diagnoses in 2023, while cancers like leukemia and brain tumors are considered “rare diseases.” Leukemia in particular, can be divided into acute, chronic and other, with acute lymphoblastic leukemia (ALL) and acute myeloid leukemia (AML) comprising 26,920 of the estimated 59,610 n ew cases expected in the United States in 2023.
Market for Annamycin Per the American Cancer Society, digestive, reproductive, breast and respiratory cancers comprise most of expected cancer diagnoses in 2024, while cancers like leukemia and brain tumors are considered “rare diseases.” Leukemia in particular, can be divided into acute, chronic and other, with acute lymphoblastic leukemia (ALL) and AML comprising 27,350 of the estimated 62,770 new cases expected in the United States in 2024.
Together, this group of relapsed and refractory AML patients constitutes our primary focus for treatment with Annamycin and our intent is to pursue FDA approval for Annamycin as a second-line induction therapy for adult relapsed or refractory AML patients. 13 Table of Contents We believe that pursuing approval as a second line induction therapy for adult relapsed or refractory AML patients is the shortest path to regulatory approval, but we also believe that one of the most important potential uses of Annamycin is in the treatment of children with either AML or ALL (acute lymphoblastic leukemia, which is more common in children).
We believe that pursuing approval as a second line induction therapy for adult relapsed or refractory AML patients is the shortest path to regulatory approval, but we also believe that one of the most important potential uses of Annamycin is in the treatment of children with either AML or ALL (acute lymphoblastic leukemia, which is more common in children).
They include: • Priority Review, under which FDA aims to complete the NDA review within eight months of the date of submission; • Accelerated Approval, where a product may be approved on the basis of data demonstrating an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality (IMM) that is reasonably likely to predict an effect on IMM or other clinical benefit; • Fast Track, which may provide for FDA review of sections of the NDA on a rolling basis, before the complete application is submitted; and • Breakthrough Therapy, which also provides for rolling review and other actions to expedite review of the NDA.
They include: • Priority Review, under which FDA aims to complete the NDA review within eight months of the date of submission; • Accelerated Approval, where a product may be approved on the basis of data demonstrating an effect on a surrogate endpoint that is reasonably likely to predict clinical benefit, or on a clinical endpoint that can be measured earlier than irreversible morbidity or mortality (IMM) that is reasonably likely to predict an effect on IMM or other clinical benefit; • Fast Track, which may provide for FDA review of sections of the NDA on a rolling basis, before the complete application is submitted; and • Breakthrough Therapy, which also provides for rolling review and other actions to expedite review of the NDA. 22 Table of Contents The availability of these programs is determined by the facts surrounding each specific product candidate, the disease or condition it is intended to treat, and the availability and characteristics of alternative treatments.
Our pharmaceutical product candidates may not be considered medically necessary or cost-effective. To the extent other drugs or therapies are found to be more effective than our products, payers may elect to cover such therapies in lieu of our products and/or reimburse our products at a lower rate. Different pricing and reimbursement schemes exist in other countries.
To the extent other drugs or therapies are found to be more effective than our products, payers may elect to cover such therapies in lieu of our products and/or reimburse our products at a lower rate. 25 Table of Contents Different pricing and reimbursement schemes exist in other countries.
Caffeic acid has shown a natural ability to inhibit p-STAT3, which is considered a master regulator of inflammatory processes that support tumor survival and proliferation. 10 Table of Contents WP1066 has exhibited an ability to inhibit other key oncogenic transcription factors, including c-Myc and HIF-1α.
Caffeic acid has shown a natural ability to inhibit p-STAT3, which is considered a master regulator of inflammatory processes that support tumor survival and proliferation. WP1066 has exhibited an ability to inhibit other key oncogenic transcription factors, including c-Myc and HIF-1α. A critical characteristic of WP1066 and its analogs is the ability to inhibit p-STAT3 independently of upstream cell signaling.
A total of 1.9 million new cancer cases and 609,820 deaths from cancer are expected to occur in the US in 2023, which is about 1,670 deaths a day. These statistics do not include either basal cell or squamous cell skin cancers because US cancer registries are not required to collect information on these cancers.
A total of 2.0 million new cancer cases and 611,720 deaths from cancer are expected to occur in the US in 2024, which is about 1,680 d eaths a day. These statistics do not include either basal cell or squamous cell skin cancers because US cancer registries are not required to collect information on these cancers.
Of the eleven lesions, 45% exhibited a CR or a 50% or more reduction in CAILS and 55% exhibited stable disease with 100% showing a clinical benefit. Independent dermatologic review based on photographic documentation was conducted and corroborated these findings.
Improvement was noted within seven days of treatment initiation and maintained 1 month after discontinuation. Of the eleven lesions, 45% exhibited a CR or a 50% or more reduction in CAILS and 55% exhibited stable disease with 100% showing a clinical benefit. Independent dermatologic review based on photographic documentation was conducted and corroborated these findings.
We believe this will advance future studies of WP1122 in antiviral and oncology indications. With an IND active for WP1122 for the treatment of glioblastoma and a COVID-19 investigator sponsored trial in Brazil in the approval process, we have concluded that advancing WP1122 in these indications will occur only if external funds are available.
We believe this will advance future studies of WP1122 in antiviral and oncology indications. We have concluded and published the clinical study report for this trial. With an IND active for WP1122 for the treatment of glioblastoma, we have concluded that advancing WP1122 in these indications will occur only if external funds are available.
The American Cancer Society has estimated 24,810 new cases of brain and other nervous system cancers will occur in the United States in 2023, resulting in 18,990 deaths (https://www.cancer.org/latest-news/facts-and-figures-2023.html - as of January 2023). Despite the severity and poor prognosis of these tumors, there are few FDA-approved drugs on the market.
The American Cancer Society has estimated 25,400 new cases of brain and other nervous system cancers will occur in the United States in 2024, resulting in 18,760 deaths (https://www.cancer.org/research/cancer-facts-statistics/all-cancer-facts-figures/2024-cancer-facts-figures.html). Despite the severity and poor prognosis of these tumors, there are few FDA-approved drugs on the market.
This has led to a tremendous amount of clinical development activity in pancreatic cancer, with 551 trials ongoing, resulting in significant competition for pancreatic cancer patients among clinical trials, which could impact development timelines.
This has led to a tremendous amount of clinical development activity in pancreatic cancer, with 551 trials ongoing, resulting in significant competition for pancreatic cancer patients among clinical trials, which could impact development timelines. Competition for other indications targeted for each of our drug candidates is described above.
Incidence in Asians is significantly lower and based on the results of several large epidemiological studies, we estimate a Japanese incidence of close to 3,000 a year.
Incidence in Asians is significantly lower and based on the results of several large epidemiological studies, we estimate a Japanese incidence of close to 3,000 a year. Gliomas (mainly glioblastoma and astrocytomas) account for 78% of malignant tumors.
Our Focus We are focused on internally funded (“internally” and “externally” funded trials are defined in the Funding Strategy section below) development of: 1) Annamycin for the treatment of Soft Tissue Sarcoma metastasized to the lungs (STS lung metastases or STS lung mets) 2) Annamycin in combination with Cytarabine (also known as Ara-C, the combination with Annamycin of which is referred to as AnnAraC) for the treatment of Relapsed or Refractory Acute Myeloid Leukemia (R/R AML or AML). 3) Developing a better delivery mechanism for WP1066 to further support current and possibly future externally funded oncology clinical trials.
Our Focus We are focused on internally funded (“internally” and “externally” funded trials are defined in the Funding Strategy section below) development of: 1) Annamycin in combination with Cytarabine (also known as Ara-C, the combination with Annamycin of which is referred to as AnnAraC) for the treatment of AML. 2) Annamycin for the treatment of STS metastasized to the lungs. 3) A better formulation for delivery of a molecule from the WP1066 portfolio to possibly further support future externally funded oncology clinical trials.
Foreign counterparts to the US patents are issued in Canada, China, Europe, Israel, India, Japan and South Korea. These patents have an international filing date in December 2004, and in certain instances have had the patent term adjusted. We also have rights to a patent application directed to the combination of WP1066 with checkpoint inhibitors. WP1220.
Foreign counterparts to the US patents are issued in Canada, China, Europe, Israel, India, Japan and South Korea. These patents have an international filing date in December 2004, and in certain instances have had the patent term adjusted. WP1220.
Simply substituting Annamycin for the currently used anthracycline in a similar 7+3 regimen would represent a familiar and well-practiced treatment modality.
Simply substituting Annamycin for the currently used anthracycline in a similar 7+3 (or as is the case in MB-106, 5+3), regimen would therefore represent a familiar and well-practiced treatment modality.
Such activity may or may not be repeated in future Phase 2 or 3 clinical trials. While we believe such data is encouraging, the FDA or its foreign counterpart will ultimately determine if such data and future data is individually conclusive.
Such activity may or may not be repeated in future clinical trials, including potentially pivotal and/or confirmatory clinical trials. While we believe such data are encouraging, the FDA or its foreign counterpart will ultimately determine if such data and future data are individually conclusive and support future clinical trials or approval.
We believe Annamycin may significantly reduce the impact of these two factors. If early human data from the clinical activity thus far are borne out, of which there can be no assurance, Annamycin may ultimately provide clinically meaningful benefits over currently approved anthracyclines in treating certain cancers.
We believe Annamycin may significantly reduce the impact of these two factors. If early clinical data of efficacy are borne out in subsequent clinical trials, of which there can be no assurance, Annamycin may ultimately provide clinically meaningful benefits over currently approved anthracyclines in treating certain cancers, especially as a 2 nd line therapy.
Accordingly, clinical trials may not be completed successfully within any specified period, if at all. Concurrent with clinical trials, companies usually complete additional animal studies, develop additional information about the physical characteristics of the product candidate and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
Concurrent with clinical trials, companies usually complete additional animal studies, develop additional information about the physical characteristics of the product candidate and finalize a process for manufacturing the product in commercial quantities in accordance with cGMP requirements.
This would be consistent with the current practice to use Ara-C in combination with other anthracyclines. The current first-line therapy for AML patients is the combination of an anthracycline and Ara-C in a regimen referred to as "7+3" where Ara-C is administered daily for 7 days in parallel with 3 daily doses of an anthracycline.
The most common first-line therapy for fit AML patients currently is the combination of an anthracycline and Ara-C in a regimen referred to as "7+3" where Ara-C is administered daily for 7 days in parallel with 3 daily doses of an anthracycline.
Sokolowska-Wojdylo in conjunction with the 4th Annual World Congress of Cutaneous Lymphomas in Barcelona, Spain on February 13, 2020. The final results supported the safety of topical WP1220 and demonstrated an improvement in the Composite Assessment of Index Lesion Severity (CAILS) score. Mycosis Fungoides or MF, the most common variant of CTCL, is a disease with symptomatic, disfiguring skin lesions.
M. Sokolowska-Wojdylo in conjunction with the 4th Annual World Congress of Cutaneous Lymphomas in Barcelona, Spain on February 13, 2020. The final results supported the safety of topical WP1220 and demonstrated an improvement in the Composite Assessment of Index Lesion Severity (CAILS) score.
A patient not suitable for intensive therapy may be offered the option for low-intensity therapy such as low-dose cytarabine, azacitidine or decitabine.
A patient not suitable for intensive therapy may be treated with Venclexta in combination with azacitidine, or low-intensity therapy such as low-dose cytarabine, azacitidine or decitabine.
The Orphan Drug Act provides incentives for the development of drugs intended to treat rare diseases or conditions, which generally are diseases or conditions affecting less than 200,000 individuals in the US.
The Orphan Drug Act provides incentives for the development of drugs intended to treat rare diseases or conditions, which generally are diseases or conditions affecting less than 200,000 individuals in the US. If a sponsor demonstrates that a drug is intended to treat a rare disease or condition, the FDA grants ODD for the product for that use.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

82 edited+42 added−25 removed294 unchanged
Biggest changeTo the extent that any disruption or security breach results in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and development of our product candidates could be delayed or could fail.
Biggest changeTo the extent that any disruption or security breach results in a loss of or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and development of our product candidates could be delayed or could fail. 42 Table of Contents The COVID-19 outbreak delayed recruitment in our clinical trials in the past and may return, may affect the business of the FDA, EMA or other health authorities, which could result in delays in meetings related to our planned clinical trials and ultimately of reviews and approvals of our product candidates.
We may not have the financial resources to continue development of, or to enter into collaborations for, a product candidate if we experience any problems or other unforeseen events that delay or prevent regulatory approval of, or our ability to commercialize, product candidates, including: • inability to obtain sufficient funds required for a clinical trial; • inability to reach agreements on acceptable terms with prospective CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • clinical sites dropping out of a clinical trial; • time required to add new clinical sites; • negative or inconclusive results from our clinical trials or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program; • serious and unexpected drug-related side effects experienced by subjects in our clinical trials or by individuals using drugs similar to our product candidates; • conditions imposed by the FDA or comparable foreign authorities regarding the scope or design of our clinical trials; • delays in or inability to enroll research subjects in sufficient numbers or at the expected rate; • high drop-out rates and high fail rates of research subjects; • imposition of a clinical hold following an inspection of our clinical trial operations or trial sites by the FDA or foreign regulatory authorities; • delays or failures in obtaining required IRB approval; • inadequate supply or quality of product candidate components or materials or other supplies necessary for the conduct of our clinical trials; failure to comply with GLP, GCP, cGMP or similar foreign regulatory requirements that affect the conduct of pre-clinical and clinical studies and the manufacturing of product candidates; 27 Table of Contents • greater than anticipated clinical trial costs; • poor efficacy of our product candidates during clinical trials; • requests by regulatory authorities for additional data or clinical trials; • governmental or regulatory agency assessments of pre-clinical or clinical testing that differ from our interpretations or conclusions; • governmental or regulatory delays, or changes in approval policies or regulations; or • unfavorable FDA or other regulatory agency inspection and review of a clinical trial site or vendor.
We may not have the financial resources to continue development of, or to enter into collaborations for, a product candidate if we experience any problems or other unforeseen events that delay or prevent regulatory approval of, or our ability to commercialize, product candidates, including: • inability to obtain sufficient funds required for a clinical trial; • inability to reach agreements on acceptable terms with prospective CROs and trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites; • clinical sites dropping out of a clinical trial; • time required to add new clinical sites; • negative or inconclusive results from our clinical trials or the clinical trials of others for product candidates similar to ours, leading to a decision or requirement to conduct additional preclinical testing or clinical trials or abandon a program; • serious and unexpected drug-related side effects experienced by subjects in our clinical trials or by individuals using drugs similar to our product candidates; • conditions imposed by the FDA or comparable foreign authorities regarding the scope or design of our clinical trials; 31 Table of Contents • delays in or inability to enroll research subjects in sufficient numbers or at the expected rate; • high drop-out rates and high fail rates of research subjects; • imposition of a clinical hold following an inspection of our clinical trial operations or trial sites by the FDA or foreign regulatory authorities; • delays or failures in obtaining required IRB approval; • inadequate supply or quality of product candidate components or materials or other supplies necessary for the conduct of our clinical trials; failure to comply with GLP, GCP, cGMP or similar foreign regulatory requirements that affect the conduct of pre-clinical and clinical studies and the manufacturing of product candidates; • greater than anticipated clinical trial costs; • poor efficacy of our product candidates during clinical trials; • requests by regulatory authorities for additional data or clinical trials; • governmental or regulatory agency assessments of pre-clinical or clinical testing that differ from our interpretations or conclusions; • governmental or regulatory delays, or changes in approval policies or regulations; or • unfavorable FDA or other regulatory agency inspection and review of a clinical trial site or vendor.
As a result, our ability to reduce our losses and reach profitability is unproven, and we may never achieve or sustain profitability. • Our financial condition would be adversely impacted if our intangible assets become impaired. • We have no sales, marketing or distribution experience and we will have to invest significant resources to develop those capabilities or enter into acceptable third-party sales and marketing arrangements. • We may not be successful in establishing and maintaining development and commercialization collaborations, which could adversely affect our ability to develop certain of our product candidates and our financial condition and operating results. • We face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively. • We will need to expand our operations and increase the size of our company, and we may experience difficulties in managing growth. • We may not be able to manage our business effectively if we are unable to attract and retain key personnel and consultants. • We do not expect that our insurance policies will cover all of our business exposures thus leaving us exposed to significant uninsured liabilities. • We may incur penalties if we fail to comply with healthcare regulations. • We may not be able to recover from any catastrophic event affecting our suppliers. • Our business and operations would suffer in the event of third-party computer system failures, cyber-attacks on third-party systems or deficiency in our cyber security. • The COVID-19 outbreak has delayed recruitment in our clinical trials and may continue or worsen, may affect the business of the FDA, EMA or other health authorities, which could result in delays in meetings related to our planned clinical trials and ultimately of reviews and approvals of our product candidates. • Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results. • We depend on our information technology and infrastructure so compromises could materially harm our ability to conduct business or delay our financial reporting. • We may be required to make significant payments under our license agreements with MD Anderson. • New tax laws or regulations that are enacted or existing tax laws and regulations that are interpreted, modified, or applied adversely to us or our customers may have a material adverse effect on our business and financial condition.
As a result, our ability to reduce our losses and reach profitability is unproven, and we may never achieve or sustain profitability. • Our financial condition would be adversely impacted if our intangible assets become impaired. • We have no sales, marketing or distribution experience and we will have to invest significant resources to develop those capabilities or enter into acceptable third-party sales and marketing arrangements. • We may not be successful in establishing and maintaining development and commercialization collaborations, which could adversely affect our ability to develop certain of our product candidates and our financial condition and operating results. • We face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively. • We will need to expand our operations and increase the size of our company, and we may experience difficulties in managing growth. • We may not be able to manage our business effectively if we are unable to attract and retain key personnel and consultants. • We do not expect that our insurance policies will cover all of our business exposures thus leaving us exposed to significant uninsured liabilities. • We may incur penalties if we fail to comply with healthcare regulations. • We may not be able to recover from any catastrophic event affecting our suppliers. • Our business and operations would suffer in the event of third-party computer system failures, cyber-attacks on third-party systems or deficiency in our cyber security. • The COVID-19 outbreak delayed recruitment in our clinical trials in the past and may return, may affect the business of the FDA, EMA or other health authorities, which could result in delays in meetings related to our planned clinical trials and ultimately of reviews and approvals of our product candidates. • Our failure to comply with data protection laws and regulations could lead to government enforcement actions and significant penalties against us, and adversely impact our operating results. • We depend on our information technology and infrastructure so compromises could materially harm our ability to conduct business or delay our financial reporting. • We may be required to make significant payments under our license agreements with MD Anderson. • New tax laws or regulations that are enacted or existing tax laws and regulations that are interpreted, modified, or applied adversely to us or our customers may have a material adverse effect on our business and financial condition.
We are conducting important clinical trials in the US and Europe, and studies for additional countries in which to perform preclinical studies and clinical trials and the risks associated with conducting research and clinical trials abroad could materially adversely affect our business. We have approved Clinical Trial Authorizations in Poland and Italy.
We are conducting important clinical trials in the US and Europe, and we are performing studies for additional countries in which to perform preclinical studies and clinical trials and the risks associated with conducting research and clinical trials abroad could materially adversely affect our business. We have approved Clinical Trial Authorizations in Poland and Italy.
We have received Fast Track designation for one of our product candidates and may seek the same designation for one of more of our other product candidates. Such designation may not actually lead to a faster development or regulatory review or approval process.
We have received Fast Track designation for two of our product candidates and may seek the same designation for one of more of our other product candidates. Such designation may not actually lead to a faster development or regulatory review or approval process.
The commencement and completion of future clinical trials could be substantially delayed or prevented by several factors, including, but not limited to: • failure to reach agreement with the FDA or other regulatory agency requirements for clinical trial design or scope of the development program; a limited number of, and competition for, suitable subjects with particular types of cancer and viruses for enrollment in our clinical trials; • delays or failures in reaching acceptable clinical trial agreement terms with CROs or clinical trial sites; • delays or inability to attract clinical investigators for trials; • clinical sites dropping out of a clinical trial; • time required to add new clinical sites; • failure of subjects to complete the clinical trial or inability to follow subjects adequately after treatment; failures by, changes in our relationship with, or other issues at, CROs, vendors and investigators responsible for pre-clinical testing and clinical trials; imposition of a clinical hold; and • unforeseen safety issues.
The commencement and completion of future clinical trials could be substantially delayed or prevented by several factors, including, but not limited to: • failure to reach agreement with the FDA or other regulatory agency requirements for clinical trial design or scope of the development program; a limited number of, and competition for, suitable subjects with particular types of cancer and viruses for enrollment in our clinical trials; 32 Table of Contents • delays or failures in reaching acceptable clinical trial agreement terms with CROs or clinical trial sites; • delays or inability to attract clinical investigators for trials; • clinical sites dropping out of a clinical trial; • time required to add new clinical sites; • failure of subjects to complete the clinical trial or inability to follow subjects adequately after treatment; failures by, changes in our relationship with, or other issues at, CROs, vendors and investigators responsible for pre-clinical testing and clinical trials; imposition of a clinical hold; and • unforeseen safety issues.
As a result of the accounting for our acquisition of Moleculin, LLC and the agreement we, on Moleculin, LLC’s behalf, entered into with Houston Pharmaceuticals, Inc., we have carried on our balance sheet within intangible assets in-process research and development (IPR&D) of $11.1 million as of December 31, 2022.
As a result of the accounting for our acquisition of Moleculin, LLC and the agreement we, on Moleculin, LLC’s behalf, entered into with Houston Pharmaceuticals, Inc., we have carried on our balance sheet within intangible assets in-process research and development (IPR&D) of $11.1 million as of December 31, 2023.
The amount and timing of our future funding requirements will depend on many factors, including but not limited to: • whether our plan for clinical trials will be completed on a timely basis and, if completed, whether we will be able to publicly announce results from our phase I/II clinical trials in accordance with our announced milestones; • whether the results of our clinical trials will be announced on a timely basis and, when announced, whether such results are in accordance with our expectations or our announced milestones; • whether we are successful in obtaining the benefits of FDA’s expedited development and review programs related to Annamycin or our other drug candidates; • the progress, costs, results of and timing of our clinical trials and also of our preclinical studies; • the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals; • the costs associated with securing and establishing commercialization and manufacturing capabilities; • market acceptance of our product candidates; • the costs of acquiring, licensing or investing in businesses, products, product candidates and technologies; • our ability to maintain, expand and enforce the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights; • our need and ability to hire additional management and scientific and medical personnel; • the effect of competing drug candidates and new product approvals; • our need to implement additional internal systems and infrastructure, including financial and reporting systems; and • the economic and other terms, timing of and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future.
The amount and timing of our future funding requirements will depend on many factors, including but not limited to: • whether our plan for clinical trials will be completed on a timely basis and, if completed, whether we will be able to publicly announce results from our phase I/II clinical trials in accordance with our announced milestones; • whether the results of our clinical trials will be announced on a timely basis and, when announced, whether such results are in accordance with our expectations or our announced milestones; • whether we are successful in obtaining the benefits of FDA’s expedited development and review programs related to Annamycin or our other drug candidates; • the progress, costs, results of and timing of our clinical trials and also of our preclinical studies; • the outcome, costs and timing of seeking and obtaining FDA and any other regulatory approvals; • the costs associated with securing and establishing commercialization and manufacturing capabilities; • market acceptance of our product candidates; • the costs of acquiring, licensing or investing in businesses, products, product candidates and technologies; • our ability to maintain, expand and enforce the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any patents or other intellectual property rights; • our need and ability to hire additional management and scientific and medical personnel; • the effect of competing drug candidates and new product approvals; • our need to implement additional internal systems and infrastructure, including financial and reporting systems; and • the economic and other terms, timing of and success of our existing licensing arrangements and any collaboration, licensing or other arrangements into which we may enter in the future. 38 Table of Contents Some of these factors are outside of our control.
If we are unable to raise sufficient capital when needed, our business, financial condition and results of operations will be materially and adversely affected, and we will need to significantly modify our operational plans to continue as a going concern Shares issuable upon the exercise of outstanding options or warrants may substantially increase the number of shares available for sale in the public market and depress the price of our common stock.
If we are unable to raise sufficient capital when needed, our business, financial condition and results of operations will be materially and adversely affected, and we will need to significantly modify our operational plans to continue as a going concern. 44 Table of Contents Shares issuable upon the exercise of outstanding options or warrants may substantially increase the number of shares available for sale in the public market and depress the price of our common stock.
We do not know whether any clinical trials we or any of our potential future collaborators may conduct will demonstrate the consistent or adequate efficacy and safety that would be required to obtain regulatory approval and market any products.
We do not know whether any clinical trials we or any of our potential future collaborators may conduct will demonstrate the consistent or sufficient efficacy and safety that would be required to obtain regulatory approval and market any products.
We have no products approved for commercial sale and may never achieve or maintain profitability, which could have an impact on finding additional financing. • Shares issuable upon the exercise of outstanding options or warrants may substantially increase the number of shares available for sale in the public market and depress the price of our common stock. • As a biotechnology company, we are at increased risk of securities class action litigation. • If we are unable to maintain compliance with the listing requirements of The Nasdaq Capital Market, our common stock may be delisted from The Nasdaq Capital Market which could have a material adverse effect on our financial condition and could make it more difficult for you to sell your shares. • Failure to maintain our accounting systems and controls could impair our ability to comply with the financial reporting and internal controls requirements for publicly traded companies. • Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.
We have no products approved for commercial sale and may never achieve or maintain profitability, which could have an impact on finding additional financing. • Shares issuable upon the exercise of outstanding options or warrants may substantially increase the number of shares available for sale in the public market and depress the price of our common stock. • As a biotechnology company, we are at increased risk of securities class action litigation. • If we are unable to maintain compliance with the listing requirements of The Nasdaq Capital Market, our common stock may be delisted from The Nasdaq Capital Market which could have a material adverse effect on our financial condition and could make it more difficult for you to sell your shares. • Failure to maintain our accounting systems and controls could impair our ability to comply with the financial reporting and internal controls requirements for publicly traded companies. • Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price. • We cannot predict the effect that our reverse stock split will have on the market price for shares of our common stock.
None of the foregoing transactions were conducted on an arm’s length basis. As such, it is possible that the terms were less favorable to us than in an arm’s length transaction. 35 Table of Contents We have never been profitable, we have no products approved for commercial sale, and to date we have not generated any revenue from product sales.
None of the foregoing transactions were conducted on an arm’s length basis. As such, it is possible that the terms were less favorable to us than in an arm’s length transaction. We have never been profitable, we have no products approved for commercial sale, and to date we have not generated any revenue from product sales.
If we are not able to obtain required regulatory approvals, we will not be able to commercialize our product candidates and our ability to generate revenue will be materially impaired. • Delays in the commencement, enrollment and completion of clinical trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for any of our product candidates. • We may expend significant resources to pursue certain product candidates for specific indications, and fail to capitalize on the potential of such product candidates for the potential treatment of other indications that may be more profitable or for which there is a greater likelihood of success. • We have commenced clinical trials and have never submitted an NDA, and any product candidate we advance through clinical trials may not have favorable results in later clinical trials or receive regulatory approval. • We may find it difficult to enroll subjects in our clinical trials, which could delay or prevent clinical trials of our product candidates. • A portion of our clinical development plan relies on physician-sponsored trials, which we do not control and which may encounter delays for reasons outside of our control. • If any of our drug product candidates are found to be unsafe or lack efficacy, we will not be able to obtain regulatory approval for it and our business would be harmed. • Our product candidates may have undesirable side effects that may delay or prevent marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales. • Even if our product candidates receive marketing authorization from the FDA, if the FDA does not find the manufacturing facilities of our future contract manufacturers acceptable for commercial production, we may not be able to commercialize any of our product candidates. • We received ODD for Annamycin and WP1066, but even if either product candidate is approved and receives ODE, ODE may not effectively prevent approval of a competing product. • The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and even if we obtain approval for a product candidate in one country or jurisdiction, we may never obtain approval for or commercialize it in any other jurisdiction, which would limit our ability to realize our full market potential. • We have received Fast Track designation for one of our product candidates and may seek the same designation for one of more of our other product candidates.
If we are not able to obtain required regulatory approvals, we will not be able to commercialize our product candidates and our ability to generate revenue will be materially impaired. • Delays in the commencement, enrollment and completion of clinical trials could result in increased costs to us and delay or limit our ability to obtain regulatory approval for any of our product candidates. • As an organization, we have never conducted pivotal clinical trials, and we may be unable to do so for any product candidate we may develop. • We may expend significant resources to pursue certain product candidates for specific indications and fail to capitalize on the potential of such product candidates for the potential treatment of other indications that may be more profitable or for which there is a greater likelihood of success. • We have commenced clinical trials and have never submitted an NDA, and any product candidate we advance through clinical trials may not have favorable results in later clinical trials or receive regulatory approval. • We may find it difficult to enroll subjects in our clinical trials, which could delay or prevent clinical trials of our product candidates. • A portion of our clinical development plan relies on physician-sponsored trials, which we do not control, and which may encounter delays for reasons outside of our control. • If any of our drug product candidates are found to be unsafe or lack sufficient efficacy, we will not be able to obtain regulatory approval for it and our business would be harmed. • Our product candidates may have undesirable side effects that may delay or prevent marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales. • Even if our product candidates otherwise qualify for approval from the FDA, if the FDA does not find the manufacturing facilities of our future contract manufacturers acceptable for commercial production, we may not be able to commercialize any of our product candidates. • We received ODD for Annamycin, WP1066, and WP1122, but even if either product candidate is approved and receives ODE, ODE may not effectively prevent approval of a competing product. • The regulatory approval processes of the FDA and comparable foreign authorities are lengthy, time consuming and inherently unpredictable, and even if we obtain approval for a product candidate in one country or jurisdiction, we may never obtain approval for or commercialize it in any other jurisdiction, which would limit our ability to realize our full market potential. • We have received Fast Track designation for two of our product candidates and may seek the same designation for one of more of our other product candidates.
These and other risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations. There are limited suppliers for active pharmaceutical ingredients (API) used in in our drug candidates and we utilize a single source for such API for certain of our drug candidates.
These and other risks associated with our international operations may materially adversely affect our ability to attain or maintain profitable operations. 29 Table of Contents There are limited suppliers for active pharmaceutical ingredients (API) used in in our drug candidates and we utilize a single source for such API for certain of our drug candidates.
Effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. 40 Table of Contents Because we are a smaller reporting company and a non-accelerated filer, we are not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.
Effective internal controls are necessary for us to produce reliable financial reports and are important to help prevent financial fraud. Because we are a smaller reporting company and a non-accelerated filer, we are not required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act.
A portion of our clinical development plan relies on physician-sponsored trials, which we do not control and which may encounter delays for reasons outside of our control. Our drug product candidate, WP1066, has been in two physician-sponsored Phase 1 clinical trials, one for adult GBM and another for pediatric brain tumors.
A portion of our clinical development plan relies on physician-sponsored trials, which we do not control, and which may encounter delays for reasons outside of our control. Our drug product candidate, WP1066, was in two physician-sponsored Phase 1 clinical trials, one for adult GBM and another for pediatric brain tumors.
If we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed, and investors could lose confidence in our reported financial information. Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.
If we cannot provide reliable financial reports or prevent fraud, our business and results of operations could be harmed, and investors could lose confidence in our reported financial information. 45 Table of Contents Unstable market and economic conditions may have serious adverse consequences on our business, financial condition and stock price.
Finally, a data breach affecting sensitive personal information, including health information, could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business. 38 Table of Contents EU Member States, Switzerland and other countries have also adopted data protection laws and regulations, which impose significant compliance obligations.
Finally, a data breach affecting sensitive personal information, including health information, could result in significant legal and financial exposure and reputational damages that could potentially have an adverse effect on our business. EU Member States, Switzerland and other countries have also adopted data protection laws and regulations, which impose significant compliance obligations.
Our failure to comply with these laws, or changes in the way in which these laws are implemented, could lead to government enforcement actions and significant penalties against us, and adversely impact our business. We depend on our information technology and infrastructure so compromises could materially harm our ability to conduct business or delay our financial reporting.
Our failure to comply with these laws, or changes in the way in which these laws are implemented, could lead to government enforcement actions and significant penalties against us, and adversely impact our business. 43 Table of Contents We depend on our information technology and infrastructure so compromises could materially harm our ability to conduct business or delay our financial reporting.
We can provide no assurance that we will not encounter future delays with our physician-sponsored trials. If any of our drug product candidates are found to be unsafe or lack efficacy, we will not be able to obtain regulatory approval for it and our business would be harmed.
We can provide no assurance that we will not encounter future delays with our physician-sponsored trials. 33 Table of Contents If any of our drug product candidates are found to be unsafe or lack sufficient efficacy, we will not be able to obtain regulatory approval for it and our business would be harmed.
The COVID-19 outbreak has delayed recruitment in clinical trials and may continue or worsen. Additionally, it may delay the approvals of our product candidates due to its effect on the business of the FDA, EMA or other health authorities, which could result in delays in meetings related to planned clinical trials.
The COVID-19 outbreak delayed recruitment in clinical trials and may return. Additionally, it may delay the approvals of our product candidates due to its effect on the business of the FDA, EMA or other health authorities, which could result in delays in meetings related to planned clinical trials.
Some of these factors are outside of our control. Our existing capital resources are not sufficient to enable us to complete the development and commercialization of our product candidates, or to initiate any clinical trials or additional development work needed for any other drug candidates. Accordingly, we will need to raise additional funds in the future.
Our existing capital resources are not sufficient to enable us to complete the development and commercialization of our product candidates, or to initiate any clinical trials or additional development work needed for any other drug candidates. Accordingly, we will need to raise additional funds in the future.
If a product is intended for the treatment of a serious condition and nonclinical or clinical data demonstrate the potential to address unmet medical need for this condition, a product sponsor may apply for FDA Fast Track designation. FDA granted Fast Track designation to Annamycin for STS lung metastases in March 2021.
If a product is intended for the treatment of a serious condition and nonclinical or clinical data demonstrate the potential to address unmet medical need for this condition, a product sponsor may apply for FDA Fast Track designation. FDA granted Fast Track designation to Annamycin for STS lung metastases and WP1122 for GBM.
If we seek Fast Track designation for Annamycin for other indications or for another product candidate, we may not receive it from the FDA. Additionally, even if we receive Fast Track designation, Fast Track designation does not ensure that we will receive marketing approval or that approval will be granted within any particular time frame.
If we seek Fast Track designation for other indications on either of these or another product candidate, we may not receive it from the FDA. Additionally, even if we receive Fast Track designation, Fast Track designation does not ensure that we will receive marketing approval or that approval will be granted within any particular time frame.
Responding to proxy contests and other actions by such activist investors or others in the future could be costly and time-consuming, disrupt our operations and divert the attention of our Board of Directors and senior management from the pursuit of our business strategies, which could adversely affect our results of operations and financial condition. ITEM 1B. UNRESOLVED STAFF COMMENTS None.
Responding to proxy contests and other actions by such activist investors or others in the future could be costly and time-consuming, disrupt our operations and divert the attention of our Board of Directors and senior management from the pursuit of our business strategies, which could adversely affect our results of operations and financial condition.
Risks Related to Our Intellectual Property • The composition of matter patent for Annamycin has expired, and other patents have not yet been issued, and may not be issued. • The intellectual property rights we have licensed from MD Anderson are subject to the rights of the US government. • We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights. • We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. • If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished. • If we breach any of the agreements under which we license patent rights or if we fail to meet certain development deadlines, pay certain fees including extension fees or exercise certain rights to technology, we could lose or fail to obtain license rights that are important to our business. • We will not be able to protect our intellectual property rights throughout the world. 23 Table of Contents Risks Relating to Our Business and Financial Condition • We will require additional funding, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations. • Because successful development of our product candidates is uncertain, we are unable to estimate the actual amount of funding we will require to complete research and development and commercialize our products under development. • We have commenced clinical trials, have a limited operating history and we expect a number of factors to cause our operating results to fluctuate on an annual basis, which may make it difficult to predict our future performance. • Our ability to successfully commence and recruit subjects for a potential Phase 2 COVID-19 clinical trial of WP1122 is dependent upon our ability to locate a foreign jurisdiction for such a trial with a sufficient and certain patient population at the time of such trial. • We have in the past completed related party transactions that were not conducted on an arm’s length basis. • We have never been profitable, we have no products approved for commercial sale, and to date we have not generated any revenue from product sales.
Risks Related to Our Intellectual Property • The composition of matter patent for Annamycin has expired, and other patents have not yet been issued, and may not be issued. • The intellectual property rights we have licensed from MD Anderson are subject to the rights of the US government. • We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights. • We may be subject to claims that our employees have wrongfully used or disclosed alleged trade secrets of their former employers. • If we are not able to adequately prevent disclosure of trade secrets and other proprietary information, the value of our technology and products could be significantly diminished. • If we breach any of the agreements under which we license patent rights or if we fail to meet certain development deadlines, pay certain fees including extension fees or exercise certain rights to technology, we could lose or fail to obtain license rights that are important to our business. • We will not be able to protect our intellectual property rights throughout the world. 27 Table of Contents Risks Relating to Our Business and Financial Condition • We will require additional funding, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations. • Because successful development of our product candidates is uncertain, we are unable to estimate the actual amount of funding we will require to complete research and development and commercialize our products under development. • We have commenced clinical trials, have a limited operating history and we expect a number of factors to cause our operating results to fluctuate on an annual basis, which may make it difficult to predict our future performance. • We have in the past completed related party transactions that were not conducted on an arm’s length basis. • We have never been profitable, we have no products approved for commercial sale, and to date we have not generated any revenue from product sales.
We are currently utilizing contract manufacturers for the production of the active pharmaceutical ingredients and the formulation of drug product candidates for our clinical trials. Additionally, even if our product candidates receive marketing authorization from the FDA, we do not intend to manufacture the approved pharmaceutical products.
We are currently utilizing contract manufacturers for the production of the active pharmaceutical ingredients and the formulation of drug product candidates for our clinical trials. Additionally, even if our product candidates otherwise qualify for approval from the FDA, we do not intend to manufacture the approved pharmaceutical products.
For the year ended December 31, 2022, we incurred a net loss of $29.0 million. We had an accumulated deficit of $101 .8 million as of December 31, 2022. To date, we have devoted most of our financial resources to research and development, including our drug discovery research, preclinical development activities and clinical trial preparation, as well as corporate overhead.
For the year ended December 31, 2023, we incurred a net loss o f $29.8 million. We had an accumulated deficit of $131.6 million as of December 31, 2023. To date, we have devoted most of our financial resources to research and development, including our drug discovery research, preclinical development activities and clinical trial preparation, as well as corporate overhead.
Because we have limited financial and managerial resources, we focus on research programs and product candidates for specific indications. Specifically, with regard to Annamycin, we are initially focusing our efforts on the treatment of AML and soft tissue sarcoma.
Because we have limited financial and managerial resources, we focus on research programs and product candidates for specific indications. Specifically, with regard to Annamycin, we are initially focusing our efforts on the treatment of AML and STS lung mets.
In 2017, we received notice that the FDA granted ODD for Annamycin for the treatment of AML and in 2020 we received notice that the FDA granted ODD for Annamycin for the treatment of soft tissue sarcomas. In February 2019, we received notice that the FDA granted ODD for WP1066 for the treatment of glioblastoma.
In 2017, we received notice that the FDA granted ODD for Annamycin for the treatment of AML and in 2020 we received notice that the FDA granted ODD for Annamycin for the treatment of soft tissue sarcomas.
Even if our product candidates receive marketing authorization from the FDA, if the FDA does not find the manufacturing facilities of our future contract manufacturers acceptable for commercial production, we may not be able to commercialize our product candidates.
Even if our product candidates otherwise qualify for approval from the FDA, if the FDA does not find the manufacturing facilities of our future contract manufacturers acceptable for commercial production, we may not be able to commercialize our product candidates.
Further, clinical trials of potential products often reveal that it is not practical or feasible to continue development efforts. 28 Table of Contents We may find it difficult to enroll subjects in our clinical trials, which could delay or prevent clinical trials of our product candidates.
Further, clinical trials of potential products often reveal that it is not practical or feasible to continue development efforts. We may find it difficult to enroll subjects in our clinical trials, which could delay or prevent clinical trials of our product candidates. Identifying and qualifying subjects to participate in clinical trials of our product candidates is critical to our success.
Identifying and qualifying subjects to participate in clinical trials of our product candidates is critical to our success. The timing of our clinical trials depends in part on the speed at which we can recruit subjects to participate in testing our product candidates.
The timing of our clinical trials depends in part on the speed at which we can recruit subjects to participate in testing our product candidates.
Fast Track designation may also be rescinded if the FDA believes the designation is no longer supported by data from our clinical development program. • Interim or preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. • We may not be able to conduct, or contract others to conduct, animal testing in the future, which could harm our research and development activities. • We, or our third-party manufacturers, may be unable to successfully scale-up manufacturing of our product candidates in sufficient quality and quantity, which would delay or prevent us from developing our product candidates and commercializing approved products, if any. • Any of our product candidates, if approved, may become subject to unfavorable pricing regulations or third-party coverage and reimbursement policies, which would harm our business.
Fast Track designation may also be rescinded if the FDA believes the designation is no longer supported by data from our clinical development program. • Interim or preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data. • We may not be able to conduct, or contract others to conduct, animal testing in the future, which could harm our research and development activities. • We, or our third-party manufacturers, may be unable to successfully scale-up manufacturing of our product candidates in sufficient quality and quantity, which would delay or prevent us from developing our product candidates and commercializing approved products, if any. • Recently enacted legislation, future legislation and healthcare reform measures may increase the difficulty and cost for us to obtain marketing approval for and commercialize Annamycin and any future product candidates and may affect the prices we may set.
The intellectual property rights we have licensed from MD Anderson are subject to the rights of the US government. We have obtained a royalty-bearing, worldwide, exclusive license to intellectual property rights, including patent rights related to our WP1066 Portfolio and WP1122 Portfolio drug product candidates from MD Anderson.
We have obtained a royalty-bearing, worldwide, exclusive license to intellectual property rights, including patent rights related to our WP1066 Portfolio and WP1122 Portfolio drug product candidates from MD Anderson. Some of our licensed intellectual property rights from MD Anderson have been developed in the course of research funded by the US government.
We are ultimately responsible for confirming that the APIs used in our product candidates are manufactured in accordance with applicable regulations. 25 Table of Contents Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured the product candidates ourselves, including: • the inability to negotiate manufacturing agreements with third parties under commercially reasonable terms; • reduced control as a result of using third-party manufacturers for all aspects of manufacturing activities, including regulatory compliance and quality assurance.
Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured the product candidates ourselves, including: • the inability to negotiate manufacturing agreements with third parties under commercially reasonable terms; • reduced control as a result of using third-party manufacturers for all aspects of manufacturing activities, including regulatory compliance and quality assurance.
Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured our product candidates, including: • the possibility that we are unable to enter into a manufacturing agreement with a third party to manufacture our product candidates; • the possible breach of the manufacturing agreements by the third parties because of factors beyond our control; and • the possibility of termination or nonrenewal of the agreements by the third parties before we are able to arrange for a qualified replacement third-party manufacturer.
Reliance on third-party manufacturers entails risks to which we would not be subject if we manufactured our product candidates, including: • the possibility that we are unable to enter into a manufacturing agreement with a third party to manufacture our product candidates; • the possible breach of the manufacturing agreements by the third parties because of factors beyond our control; and • the possibility of termination or nonrenewal of the agreements by the third parties before we are able to arrange for a qualified replacement third-party manufacturer. 34 Table of Contents Any of these factors could prevent or cause the delay of approval or commercialization of our product candidates, cause us to incur higher costs or prevent us from commercializing our product candidates successfully.
If any of the following occurs, our business, financial condition or operating results could be materially harmed.
The following risks and uncertainties should be carefully considered. If any of the following occurs, our business, financial condition or operating results could be materially harmed.
Additionally, we are performing studies to determine if there are additional countries in which we should hold clinical and preclinical studies.
Additionally, from time to time, we perform studies to determine if there are additional countries in which we should hold current and future clinical and preclinical studies.
Our organizational documents contain provisions that may have the effect of discouraging, delaying or preventing a change of control of, or unsolicited acquisition proposals, that a stockholder might consider favorable.
Certain provisions in our organizational documents could enable our board of directors to prevent or delay a change of control. Our organizational documents contain provisions that may have the effect of discouraging, delaying or preventing a change of control of, or unsolicited acquisition proposals, that a stockholder might consider favorable.
We may from time to time seek to enforce our intellectual property rights against infringers when we determine that a successful outcome is probable and may lead to an increase in the value of the intellectual property.
We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights. We may from time to time seek to enforce our intellectual property rights against infringers when we determine that a successful outcome is probable and may lead to an increase in the value of the intellectual property.
A lack of regularly published research about our business could cause trading volume or our stock price to decline. • Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us. • We have no intention of declaring dividends in the foreseeable future. • Certain provisions in our organizational documents could enable our board of directors to prevent or delay a change of control. • Shareholder activism could cause material disruption to our business. 24 Table of Contents The following risks and uncertainties should be carefully considered.
A lack of regularly published research about our business could cause trading volume or our stock price to decline. • Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us and may reduce the amount of money available to us. • We have no intention of declaring dividends in the foreseeable future. • Artificial intelligence presents risks and challenges that can impact our business, including by posing security risks to our confidential information, proprietary information and personal data. • Certain provisions in our organizational documents could enable our board of directors to prevent or delay a change of control. • Shareholder activism could cause material disruption to our business.
We are exposed to the risk of employee fraud or other illegal activity by our employees, independent contractors, consultants, commercial partners and vendors.
We may incur penalties if we fail to comply with healthcare regulations. We are exposed to the risk of employee fraud or other illegal activity by our employees, independent contractors, consultants, commercial partners and vendors.
ODD from the FDA is available for drugs targeting diseases with less than 200,000 cases per year. ODD may enable market exclusivity of 7 years from the date of approval of a NDA in the United States. During that period the FDA generally could not approve another product containing the same drug for the same designated indication.
ODD may enable market exclusivity of 7 years from the date of approval of a NDA in the United States. During that period the FDA generally could not approve another product containing the same drug for the same designated indication.
If we are not able to attract and retain necessary personnel and consultants to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy.
If we are not able to attract and retain necessary personnel and consultants to accomplish our business objectives, we may experience constraints that will significantly impede the achievement of our development objectives, our ability to raise additional capital and our ability to implement our business strategy. 41 Table of Contents We are highly dependent on the development, regulatory, commercialization and business development expertise of our management team, key employees, and consultants.
In addition, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the approvability of the particular drug candidate and our business in general.
Further, disclosure of preliminary or interim data by us could result in volatility in the price of our common stock. 35 Table of Contents In addition, others, including regulatory agencies, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of data differently, which could impact the approvability of the particular drug candidate and our business in general.
If the interim data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for and commercialize our current or any our future drug candidate, our business, operating results, prospects or financial condition may be materially harmed. 31 Table of Contents We may not be able to conduct, or contract others to conduct, animal testing in the future, which could harm our research and development activities.
If the interim data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for and commercialize our current or any our future drug candidate, our business, operating results, prospects or financial condition may be materially harmed.
We cannot be certain that any submissions will be accepted for filing and review by the FDA. Regulators in other jurisdictions have their own procedures for approval of product candidates.
If we submit a NDA to the FDA, the FDA must decide whether to accept or reject the submission for filing. We cannot be certain that any submissions will be accepted for filing and review by the FDA. Regulators in other jurisdictions have their own procedures for approval of product candidates.
We have no intention of declaring dividends in the foreseeable future. The decision to pay cash dividends on our common stock rests with our board of directors and will depend on our earnings, unencumbered cash, capital requirements and financial condition.
The decision to pay cash dividends on our common stock rests with our board of directors and will depend on our earnings, unencumbered cash, capital requirements and financial condition. We do not anticipate declaring any dividends in the foreseeable future, as we intend to use any excess cash to fund our operations.
Certain laws and regulations relating to drug development require us to test our product candidates on animals before initiating clinical trials involving humans. Animal testing activities have been the subject of controversy and adverse publicity.
We may not be able to conduct, or contract others to conduct, animal testing in the future, which could harm our research and development activities. Certain laws and regulations relating to drug development require us to test our product candidates on animals before initiating clinical trials involving humans. Animal testing activities have been the subject of controversy and adverse publicity.
We will not be able to protect our intellectual property rights throughout the world. We are dependent on patents licensed with MD Anderson. Filing, prosecuting and defending patents in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States may be less extensive than those in the United States.
Filing, prosecuting and defending patents in all countries throughout the world would be prohibitively expensive, and our intellectual property rights in some countries outside the United States may be less extensive than those in the United States.
Biotechnology companies have experienced greater than average stock price volatility in recent years, and our common stock price has been particularly volatile ranging from a high o f $57.48 to a low of $0.82 (taking into a ccount the one-for-six reverse stock split completed January 29, 2021).
Biotechnology companies have experienced greater than average stock price volatility in recent years, and our common stock price has been particularly volatile ranging from a high o f $862.20 to a low of $5.07 (taking into a ccount the reverse stock splits we have completed).
Although off-label prescriptions may infringe our method of use patents, the practice is common across medical specialties and such infringement is difficult to prevent or prosecute. Off-label sales would limit our ability to generate revenue from the sale of Annamycin, if approved for commercial sale.
Although off-label prescriptions may infringe our method of use patents, the practice is common across medical specialties and such infringement is difficult to prevent or prosecute.
Our certificate of incorporation and bylaws also provide that we will indemnify our directors and executive officers and may indemnify our employees and other agents to the fullest extent permitted by the DGCL. Any claims for indemnification made by our directors or officers could impact our cash resources and our ability to fund the business.
Our certificate of incorporation and bylaws also provide that we will indemnify our directors and executive officers and may indemnify our employees and other agents to the fullest extent permitted by the DGCL.
If any of our intellectual property becomes subject to any of the rights or remedies available to the US government or third parties pursuant to the Bayh-Dole Act of 1980, this could impair the value of our intellectual property and could adversely affect our business. 32 Table of Contents We may incur substantial costs as a result of litigation or other proceedings relating to patent and other intellectual property rights.
If any of our intellectual property becomes subject to any of the rights or remedies available to the US government or third parties pursuant to the Bayh-Dole Act of 1980, this could impair the value of our intellectual property and could adversely affect our business.
General Risks Your ownership may be diluted if additional capital stock is issued to raise capital, to finance acquisitions or in connection with strategic transactions. We intend to seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing equity or convertible debt securities, which would reduce the percentage ownership of our existing stockholders.
We intend to seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing equity or convertible debt securities, which would reduce the percentage ownership of our existing stockholders.
If our third-party drug suppliers fail to achieve and maintain high manufacturing standards in compliance with cGMP regulations, we could be subject to certain product liability claims in the event such failure to comply resulted in defective products that caused injury or harm.
If our third-party drug suppliers fail to achieve and maintain high manufacturing standards in compliance with cGMP regulations, we could be subject to certain product liability claims in the event such failure to comply resulted in defective products that caused injury or harm. 30 Table of Contents We cannot guarantee how long it will take regulatory agencies to review our applications for product candidates, and we may fail to obtain the necessary regulatory approvals to market our product candidates.
We expect to continue to depend on third parties to supply the API for our current and future product candidates and to supply the API in commercial quantities.
We expect to continue to depend on third parties to supply the API for our current and future product candidates and to supply the API in commercial quantities. We are ultimately responsible for confirming that the APIs used in our product candidates are manufactured in accordance with applicable regulations.
Since our IPO in June 2016, our stock price has ranged from a high of $57.48 to a low of $0.82 (ta king into account the one-for-six reverse stock split completed January 29, 2021), and the market price of our common stock is likely to continue to be highly volatile and could fluctuate widely in response to various factors, many of which are beyond our control.
Since our IPO in June 2016, our stock price has ranged from a high o f $862.20 to a low of $5.07 (t aking into account the reverse stock splits we have completed), and the market price of our common stock is likely to continue to be highly volatile and could fluctuate widely in response to various factors, many of which are beyond our control.
Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the product candidates that we develop obsolete.
These companies also have significantly greater research, sales and marketing capabilities and collaborative arrangements in our target markets with leading companies and research institutions. Established pharmaceutical companies may also invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the product candidates that we develop obsolete.
In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates.
In addition, many of the factors that cause, or lead to, a delay in the commencement or completion of clinical trials may also ultimately lead to the denial of regulatory approval of our product candidates. As an organization, we have never conducted pivotal clinical trials, and we may be unable to do so for any product candidates we may develop.
Obtaining approval of a NDA is a lengthy, expensive and uncertain process, and we may not be successful in obtaining approval. The FDA review processes can take years to complete and approval is never guaranteed. If we submit a NDA to the FDA, the FDA must decide whether to accept or reject the submission for filing.
NDAs must also include significant information regarding the chemistry, manufacturing and controls for the product. Obtaining approval of a NDA is a lengthy, expensive and uncertain process, and we may not be successful in obtaining approval. The FDA review processes can take years to complete and approval is never guaranteed.
Investors in our common stock should not expect to receive dividend income on their investment, and investors will be dependent on the appreciation of our common stock to earn a return on their investment. 41 Table of Contents Certain provisions in our organizational documents could enable our board of directors to prevent or delay a change of control.
Investors in our common stock should not expect to receive dividend income on their investment, and investors will be dependent on the appreciation of our common stock to earn a return on their investment.
Risks Related to Regulatory Approval and the Development and Commercialization of our Drug Candidates We are developing our drug candidates to treat patients who are extremely or terminally ill, and severe adverse outcomes, including patient deaths, that occur in our clinical trials could negatively impact our business even if such outcomes are not shown to be related to our drugs.
An investment in our securities is speculative in nature, involves a high degree of risk and should not be made by an investor who cannot bear the economic risk of its investment for an indefinite period of time and who cannot afford the loss of its entire investment. 28 Table of Contents Risks Related to Regulatory Approval and the Development and Commercialization of our Drug Candidates We are developing our drug candidates to treat patients who are extremely or terminally ill, and severe adverse outcomes, including patient deaths, that occur in our clinical trials could negatively impact our business even if such outcomes are not shown to be related to our drugs.
In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country. Approval processes vary among countries and can involve additional product testing and validation, as well as additional administrative review periods.
In addition, clinical trials conducted in one country may not be accepted by regulatory authorities in other countries, and regulatory approval in one country does not guarantee regulatory approval in any other country.
We have not submitted any marketing applications for any of our product candidates. 26 Table of Contents NDAs must include extensive preclinical and clinical data and supporting information to establish the product candidate’s safety and effectiveness for each desired indication. NDAs must also include significant information regarding the chemistry, manufacturing and controls for the product.
We are not permitted to market our product candidates in the United States until we receive approval of a NDA from the FDA. We have not submitted any marketing applications for any of our product candidates. NDAs must include extensive preclinical and clinical data and supporting information to establish the product candidate’s safety and effectiveness for each desired indication.
If we fail to meet our payment obligations, our license agreements could be terminated, which would materially and adversely affect our business operations and financial condition. 39 Table of Contents New tax laws or regulations that are enacted or existing tax laws and regulations that are interpreted, modified or applied adversely to us or our customers may have a material adverse effect on our business and financial condition.
New tax laws or regulations that are enacted or existing tax laws and regulations that are interpreted, modified or applied adversely to us or our customers may have a material adverse effect on our business and financial condition.
Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license. 33 Table of Contents Risks Relating to Our Business and Our Financial Condition We will require additional funding, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations.
Risks Relating to Our Business and Our Financial Condition We will require additional funding, which may not be available to us on acceptable terms, or at all, and, if not so available, may require us to delay, limit, reduce or cease our operations.
If we are unable to bring any of our drug candidates to market, or to acquire other products that are on the market or can be developed, our ability to create long-term stockholder value will be limited. 29 Table of Contents Our product candidates may have undesirable side effects that may delay or prevent marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales.
Our product candidates may have undesirable side effects that may delay or prevent marketing approval, or, if approval is received, require them to be taken off the market, require them to include safety warnings or otherwise limit their sales.
It may take several years to establish an alternative source of supply for our product candidates and to have any such new source approved by the government agencies that regulate our products. 30 Table of Contents We received ODD for Annamycin and WP1066, but even if either product candidate is approved and receives ODE, ODE may not effectively prevent approval of a competing product.
It may take several years to establish an alternative source of supply for our product candidates and to have any such new source approved by the government agencies that regulate our products.
However, regardless of such option to negotiate, we may be unable to negotiate a license within the specified time frame or under terms that are acceptable to us. If we are unable to do so, the institution may offer the intellectual property rights to other parties, potentially blocking our ability to pursue a program based on that technology.
However, regardless of such option to negotiate, we may be unable to negotiate a license within the specified time frame or under terms that are acceptable to us.
As of December 31, 2022, we had warrants and options outstanding to purchase an aggregate of 5,578,147 share s of common stock at an average exercise price of $7.17 per sha re (taking into account the reverse stock split completed January 29, 2021).
As of December 31, 2023, we had warrants and options outstanding to purchase an aggregate of 1,621,576 shares of common stock at an average exercise price of $28.65 per share (taking into account the reverse stock splits we have completed).
We are highly dependent on the development, regulatory, commercialization and business development expertise of our management team, key employees, and consultants. If we lose one or more of our executive officers or key employees or consultants, our ability to implement our business strategy successfully could be seriously harmed.
If we lose one or more of our executive officers or key employees or consultants, our ability to implement our business strategy successfully could be seriously harmed. Any of our executive officers or key employees or consultants may terminate their employment at any time.
Some of our licensed intellectual property rights from MD Anderson have been developed in the course of research funded by the US government. As a result, the US government may have certain rights to intellectual property embodied in our current or future products pursuant to the Bayh-Dole Act of 1980.
As a result, the US government may have certain rights to intellectual property embodied in our current or future products pursuant to the Bayh-Dole Act of 1980. Government rights in certain inventions developed under a government-funded program include a non-exclusive, non-transferable, irrevocable worldwide license to use inventions for any governmental purpose.
If we use third parties to market and sell our products, we may have limited or no control over their sales, marketing and distribution activities on which our future revenues may depend.
If we use third parties to market and sell our products, we may have limited or no control over their sales, marketing and distribution activities on which our future revenues may depend. 40 Table of Contents We may not be successful in establishing and maintaining development and commercialization collaborations, which could adversely affect our ability to develop certain of our product candidates and our financial condition and operating results.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful.
We may not prevail in any lawsuits that we initiate, and the damages or other remedies awarded, if any, may not be commercially meaningful. Accordingly, our efforts to enforce our intellectual property rights around the world may be inadequate to obtain a significant commercial advantage from the intellectual property that we develop or license.
Accordingly, the results of any historical quarterly or annual periods should not be relied upon as indications of future operating performance.
Accordingly, the results of any historical quarterly or annual periods should not be relied upon as indications of future operating performance. 39 Table of Contents We have in the past completed related party transactions that were not conducted on an arm’s length basis.
If we fail to achieve successful collaborations, our operating results and financial condition could be materially and adversely affected. 36 Table of Contents We face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively. The biotechnology and pharmaceutical industries are intensely competitive and subject to rapid and significant technological change.
As a result, we might fail to commercialize products or programs for which a suitable collaborator cannot be found. If we fail to achieve successful collaborations, our operating results and financial condition could be materially and adversely affected. We face competition from other biotechnology and pharmaceutical companies and our operating results will suffer if we fail to compete effectively.
Additionally, we have a limited amount of drug supply and the amount of drug required may depend upon subject response and the need for additional, unplanned treatments, making it difficult to predict the total amount of drug required. 34 Table of Contents Consequently, any predictions made about our future success or viability may not be as accurate as they could be if we had a longer operating history or approved products on the market.
Additionally, we have a limited amount of drug supply and the amount of drug required may depend upon subject response and the need for additional, unplanned treatments, making it difficult to predict the total amount of drug required.
We have competitors in the United States, Europe and other jurisdictions, including major multinational pharmaceutical companies, established biotechnology companies, specialty pharmaceutical and generic drug companies and universities and other research institutions. Many of our competitors have greater financial and other resources, such as larger research and development staff and more experienced marketing and manufacturing organizations than we do.
Many of our competitors have greater financial and other resources, such as larger research and development staff and more experienced marketing and manufacturing organizations than we do. Large pharmaceutical companies, in particular, have extensive experience in clinical testing, obtaining regulatory approvals, recruiting subjects and manufacturing pharmaceutical products.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe term of the Lease began in August 2018 and will continue for an initial term of 66 months, which may be renewed for an additional 5 years. We are required to remit base monthly rent which will increase at an average approximate rate of 3% each year.
Biggest changeThe Company is required to remit base monthly rent of approximately $4,700 which will increase at an average approximate rate of 2% each year. The Company is also required to pay additional rent in the form of its pro-rata share of certain specified operating expenses of the building.
ITEM 2. PROPERTIES Our corporate executive offices, laboratory and other spaces are in located in leased facilities in Houston, Texas. In March 2018, we entered into a Lease Agreement (the “Lease”) which we use for corporate office space and headquarters.
ITEM 2. PROPERTIES Our corporate executive offices, laboratory and other spaces are located in leased facilities in Houston, Texas. In March 2018, we entered into a Lease Agreement (the “Lease”) which we use for corporate office space and headquarters.
We are also required to pay additional rent in the form of our pro-rata share of certain specified operating expenses of the landlord. In June 2022, we entered into a Second Amendment to our Lab Lease Agreement. The term of the Lease will continue through September 30, 2027, with no further right or option to renew.
In June 2022, we entered into a Second Amendment to our Lab Lease Agreement. The term of the Lease will continue through September 30, 2027, with no further right or option to renew. We are required to remit base monthly rent which will increase at an average approximate rate of 3% each year.
We are required to remit base monthly rent which will increase at an average approximate rate of 3% each year. The Lab Lease is classified as an operating lease. In August 2019, we entered into a sublease (which was extended in 2022 in connection with the lease extension) with Houston Pharmaceuticals, Inc. (HPI), which is affiliated with Dr. Priebe.
In August 2019, we entered into a sublease (which was extended in 2022 in connection with the lease extension) with Houston Pharmaceuticals, Inc. (HPI), which is affiliated with Dr. Priebe.
Added
The term of the Lease began in August 2018 and had an initial term of 66 months, which had a renewal option for an additional 5 years. In September 2023, the Company executed an amendment to extend the corporate office lease until August 31, 2029, with an option to renew.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWe have insurance policies covering potential losses where such coverage is cost effective. We are not at this time involved in any legal proceedings that we believe could have a material effect on our business, financial condition, results of operations or cash flows. ITEM 4. MINE SAFETY DISCLOSURE Not applicable. PART II
Biggest changeWe have insurance policies covering potential losses where such coverage is cost effective. We are not at this time involved in any legal proceedings that we believe could have a material effect on our business, financial condition, results of operations or cash flows.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeWe did not issue any equity securities during the fourth quarter of 2022 that were not registered under the Securities Act. Purchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our equity securities during the year ended December 31, 2022. ITEM 6. [RESERVED]
Biggest changePurchases of Equity Securities by the Issuer and Affiliated Purchasers We did not repurchase any of our equity securities during the year ended December 31, 2023.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the NASDAQ Capital Market under the symbol “MBRX”. 42 Table of Contents Holders As of Marc h 14, 2022, there were approximately 136 h olders of record of our common stock.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is listed on the NASDAQ Capital Market under the symbol “MBRX”. Holders As of Marc h 14, 2024, there were approximately 138 hol ders of record of our common stock.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFurthermore, we have demonstrated safe dosing beyond the dose limitations imposed by regulatory authorities upon currently prescribed anthracyclines due to their inherent cardiotoxicity; b) our WP1066 Portfolio, which includes WP1066 and WP1220, two of several Immune/Transcription Modulators in the portfolio designed to inhibit p-STAT3 (phosphorylated signal transducer and activator of transcription) among other transcription factors associated with tumor activity, while also stimulating a natural immune response to tumors by inhibiting the errant activity of Regulatory T-Cells (TRegs); and c) our WP1122 Portfolio, which contains compounds (including WP1122, WP1096, and WP1097) designed to exploit the potential uses of inhibitors of glycolysis such as 2-deoxy-D-glucose (2-DG), which we believe may provide an opportunity to cut off the fuel supply of tumors by taking advantage of their high level of dependence on glucose in comparison to healthy cells, as well as viruses that depend upon glycolysis and glycosylation to infect and replicate.
Biggest changeWe believe such compounds may provide an opportunity to cut off the fuel supply of tumors by taking advantage of their high degree of dependence on glucose in comparison to healthy cells, as well as viruses that also depend upon glycolysis and glycosylation to infect and replicate.
The forward-looking statements included in this discussion and elsewhere in this Form 10-K involve risks and uncertainties, including those set forth under “Cautionary Statement About Forward-Looking Statements.” Actual results and experience could differ materially from the anticipated results and other expectations expressed in our forward-looking statements as a result of a number of factors, including but not limited to those discussed in this Item and in Item 1A - “Risk Factors.” Our Business We are a clinical stage pharmaceutical company with a growing pipeline, including Phase 2 clinical programs for hard-to-treat cancers and viruses.
The forward-looking statements included in this discussion and elsewhere in this Form 10-K involve risks and uncertainties, including those set forth under “Cautionary Statement About Forward-Looking Statements.” Actual results and experience could differ materially from the anticipated results and other expectations expressed in our forward-looking statements as a result of a number of factors, including but not limited to those discussed in this Item and in Item 1A - “Risk Factors.” Our Business Summary We are a clinical stage pharmaceutical company with a growing pipeline, including Phase 2 clinical programs for hard-to-treat cancers and viruses.
Based on this guidance, we determined that certain of our warrants to purchase shares of common stock related to equity transactions in 2017, 2018, 2019, and 2020 meet the criteria for classification as a liability. Accordingly, the warrants were classified as a warrant liability and are subject to fair value remeasurement at each transaction and balance sheet date.
Based on this guidance, we determined that certain of our warrants to purchase shares of common stock related to equity transactions in 2017, 2018, 2019, 2020 , and 2023 meet the criteria for classification as a liability. Accordingly, the warrants were classified as a warrant liability and are subject to fair value remeasurement at each transaction and balance sheet date.
We expect our general and administrative expense to increase due to the anticipated growth of our business and related infrastructure as well as accounting, insurance, investor relations and other costs associated with becoming a public company. Depreciation and Amortization. Depreciation and amortization expense consists of depreciation on our property and equipment. We depreciate our assets over their estimated useful life.
We expect our general and administrative expense to increase due to the anticipated growth of our business and related infrastructure as well as accounting, insurance, investor relations and other costs associated with being a public company. Depreciation and Amortization. Depreciation and amortization expense consists of depreciation on our property and equipment. We depreciate our assets over their estimated useful life.
We have three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial 1 , based substantially on discoveries made at and licensed from MD Anderson Cancer Center (MD Anderson) in Houston, Texas.
We have three core technologies, each of which have had one or more drugs successfully complete a Phase 1 clinical trial, based substantially on discoveries made at and licensed from the University of Texas MD Anderson Cancer Center (MD Anderson) in Houston, Texas.
Critical Accounting Policies and Significant Judgments and Estimates The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) for financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (SEC).
Critical Accounting Policies and Significant Judgments and Estimates The accompanying consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (US GAAP) for financial information, and in accordance with the rules and regulations of the SEC.
The fair value of this warrant liability associated with the February 2017, February 2018, June 2018, March 2019, April 2019, and February 2020 Offerings (Offerings) are included in long-term liabilities on the accompanying financial statements as of December 31, 2022 and 2021 respectively.
The fair value of this warrant liability associated with the February 2017, February 2018, June 2018, March 2019, April 2019, February 2020, and December 2023 Off erings (Offerings) are included in long-term liabilities on the accompanying financial statements as of December 31, 2023 and 2022 respectively.
Our Core Technologies Our core technologies consist of the following: a) Annamycin or L-Annamycin is a “next generation” anthracycline designed to be different than currently approved anthracyclines, which are limited in utility because of cardiotoxicity risks and their susceptibility to multidrug resistance mechanisms.
Our Core Technologies Our core technologies consist of the following: a) Annamycin or L-Annamycin is a “next generation” anthracycline (one of the most common classes of chemotherapy), designed to be different than currently approved anthracyclines, which are limited in utility because of cardiotoxicity risks and their susceptibility to multidrug resistance mechanisms.
Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed may vary from our estimates and could result in us reporting amounts that are too high or too low in any particular period.
As actual costs become known, we adjust our accrued estimates. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed may vary from our estimates and could result in us reporting amounts that are too high or too low in any particular period.
For the years ended December 31, 2022 and 2021, we used approxima tely $27.6 million and $19.0 million of cash in operating activities, respectively, which represents cash outlays for research and development and general and administrative expenses in such periods.
For the years ended December 31, 2023 and 2022, we used approxima tely $24.1 million and $27.6 million of cash in operating activities, respectively, which represents cash outlays for research and development and general and administrative expenses in such periods.
Three of our six drug candidates have shown human activity in clinical trials and are currently in Phase 1b/2 or Phase 2 clinical trials. Since our inception, our drugs have been in, are currently in, or have received approval to proceed in eleven clinical trials.
Three of our six drug candidates have shown human activity in clinical trials and are currently or have been in Phase 1B/2 or Phase 2 clinical trials. Since our inception, our drugs have completed, are currently in, or have been permitted to proceed in thirteen clinical trials.
Gain from Change in Fair Value of Warrant Liability We recorded a gain of $1.3 million du ring the year ended December 31, 2022 as compared to a gain of $6.7 million, during the year ended December 31, 2021, for the change in fair value on revaluation of our warrant liability associated with our warrants issued in conjunction with our stock offerings.
(Loss) Gain from Change in Fair Value of Warrant Liability We recorded a loss of $1.0 million durin g the year ended December 31, 2023 as compared to a gain of $1.3 million, during the year ended December 31, 2022, for the change in fair value on revaluation of our warrant liability associated with our warrants issued in conjunction with our stock offerings.
We cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation. During the year ended December 31, 2022, we have expensed approximately $2.4 million in related legal fees and expenses.
We cannot predict when this matter will be resolved or what, if any, action the SEC may take following the conclusion of the investigation. During the year ended December 31, 2023 and 2022, we have expensed approximately $1.5 and $2.4 million, respectively, in related legal fees and expenses, which has impacted and may continue to impact our liquidity.
Pursuant to the terms of the Purchase Agreement, at the time we signed the Purchase Agreement, we issued 107,788 shares of common stock to Lincoln Park as an initial fee for its commitment to purchase shares of our common stock under the Purchase Agreement, and have agreed to issue Lincoln Park up to an additional 53,893 shares of common stock as commitment shares pro-rata when and if Lincoln Park purchases (at our discretion) the $20.0 million aggregate commitment.
Pursuant to the terms of the Purchase Agreement, at the time we signed the Purchase Agreement, we issued 7,186 shares of common stock ( t aking into account the reverse stock splits we have completed) to Lincoln Park as an initial fee for its commitment to purchase shares of our common stock under the Purchase Agreement, and have agreed to issue Lincoln Park up to an additional 3,593 shares of common stock ( t aking into account the reverse stock splits we have completed) as commitment shares pro-rata when and if Lincoln Park purchases (at our discretion) the $20.0 million aggregate commitment.
Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows: Level 1 - Unadjusted quoted prices in active markets of identical assets or liabilities.
The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). 55 Table of Contents Assets and liabilities recorded in the balance sheets at fair value are categorized based on a hierarchy of inputs as follows: Level 1 - Unadjusted quoted prices in active markets of identical assets or liabilities.
Results of Operations for the Year Ended December 31, 2022 as Compared to the Year Ended December 31, 2021 The following table is data derived from the Consolidated Statement of Operations (in thousands) and the discussions that follow are in approximate amounts: Year ended December 31, 2022 2021 Revenue $ — $ — Operating expenses: Research and development 18,968 14,418 General and administrative 11,542 8,386 Depreciation and amortization 130 164 Total operating expense 30,640 22,968 Loss from operations (30,640 ) (22,968 ) Other income: Gain from change in fair value of warrant liability 1,335 6,728 Other income, net 40 40 Interest income, net 240 306 Net loss $ (29,025 ) $ (15,894 ) Research and Development Expense Research and development (R&D) expense w as $19.0 million and $14.4 million for the years ended December 31, 2022 and 2021, respectively.
Results of Operations for the Year Ended December 31, 2023 as Compared to the Year Ended December 31, 2022 The following table is data derived from the Consolidated Statement of Operations (in thousands) and the discussions that follow are in approximate amounts: Year ended December 31, 2023 2022 Revenue $ — $ — Operating expenses: Research and development 19,487 18,968 General and administrative 10,017 11,542 Depreciation and amortization 127 130 Total operating expense 29,631 30,640 Loss from operations (29,631 ) (30,640 ) Other income: (Loss) gain from change in fair value of warrant liability (1,044 ) 1,335 Other income, net 48 40 Interest income, net 1,368 240 Transaction costs allocated to warrant liabilities (510 ) Net loss $ (29,769 ) $ (29,025 ) Research and Development Expense Research and development (R&D) expense w as $19.5 million an d $19.0 million for the years ended December 31, 2023 and 2022, respectively.
A significant portion of the accounts payable and accrued expenses are due to work performed in relation to our preclinical activities and our clinical trials.
We also had $2.5 million of accounts payable and $4.3 million of accrued expenses and other current liabilities. A significant portion of the accounts payable and accrued expenses are due to work performed in relation to our preclinical activities and our clinical trials.
Lincoln Park Equity Lines In June 2021, we entered into a Purchase Agreement with Lincoln Park Capital Fund (Lincoln Park Agreement). Pursuant to the terms of the Purchase Agreement, Lincoln Park agreed to purchase from us up to $20.0 million of common stock (subject to certain limitations) from time to time during the term of the Purchase Agreement.
Pursuant to the terms of the Purchase Agreement, Lincoln Park agreed to purchase from us up to $20.0 million of common stock (subject to certain limitations) from time to time during the term of the Purchase Agreement.
The following table sets forth the primary sources and uses of cash for the years indicated (in thousands): For the Year Ended December 31, 2022 2021 Net cash used in operating activities $ (27,639 ) $ (18,951 ) Net cash used in investing activities (67 ) (19 ) Net cash provided by (used in) financing activities (23 ) 74,724 Effect of exchange rate changes on cash and cash equivalents (29 ) (24 ) Net change in cash and cash equivalents $ (27,758 ) $ 55,730 As of December 31, 2022, there was $0.3 million of cas h on hand in a bank account in Australia and we know of no related limitations impacting our liquidity in Australia.
In the December 2023 Offering, we agreed not to utilize the Lincoln Park Agreement or any such extension thereof, until after June 26, 2024. 53 Table of Contents The following table sets forth the primary sources and uses of cash for the years indicated (in thousands): For the Year Ended December 31, 2023 2022 Net cash used in operating activities $ (24,101 ) $ (27,639 ) Net cash used in investing activities (124 ) (67 ) Net cash provided by (used in) financing activities 4,651 (23 ) Effect of exchange rate changes on cash and cash equivalents (21 ) (29 ) Net change in cash and cash equivalents $ (19,595 ) $ (27,758 ) As of December 31, 2023, there was $0.3 million of cas h on hand in a bank account in Australia and we know of no related limitations impacting our liquidity in Australia.
Our Focus We are focused on internally funded (“internally” and “externally” funded trials are defined in the Funding Strategy section below) development of: 1) Annamycin for the treatment of Soft Tissue Sarcoma metastasized to the lungs (STS lung metastases or STS lung mets) 2) Annamycin in combination with Cytarabine (also known as Ara-C, the combination with Annamycin of which is referred to as AnnAraC) for the treatment of Relapsed or Refractory Acute Myeloid Leukemia (R/R AML or AML). 3) Developing a better delivery mechanism for WP1066 to further support current and possibly future externally funded oncology clinical trials.
Our Focus We are focused on internally funded development of: 1) Annamycin in combination with Cytarabine (also known as Ara-C, the combination with Annamycin of which is referred to as AnnAraC) for the treatment of AML. 2) Annamycin for the treatment of STS metastasized to the lungs . 3) A better formulation for delivery of a molecule from the WP1066 portfolio to possibly further support future externally funded oncology clinical trials.
We estimate leasehold improvements to have a estimated useful life over the term of the lease or the estimated useful life, whichever is shorter; computer equipment to have a 2-year life; software to have a 3-year life, machinery and equipment to have a 2 to 5 year life and furniture and office equipment to have a 2 to 7 year life. 47 Table of Contents Accounting for warrants We issued warrants to purchase shares of common stock related to equity transactions in 2017, 2018, 2019, 2020, and 2021.
We estimate leasehold improvements to have a estimated useful life over the term of the lease or the estimated useful life, whichever is shorter; computer equipment to have a 2-year life; software to have a 3-year life, machinery and equipment to have a 2 to 5 year life and furniture and office equipment to have a 2 to 7 year life.
We have categorized our assets and liabilities that are valued at fair value on a recurring basis into three-level fair value hierarchy in accordance with GAAP.
The carrying amount of non-trade receivables, accounts payables, and accrued expenses approximates their fair value because of the short-term maturity of such. We have categorized our assets and liabilities that are valued at fair value on a recurring basis into three-level fair value hierarchy in accordance with GAAP.
Acquired in-process research and development (IPR&D) assets are considered indefinite lived until the completion or abandonment of the associated research and development efforts. We evaluate the recoverability of our IPR&D assets for possible impairment annually during the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable.
We evaluate the recoverability of our IPR&D assets for possible impairment annually during the fourth quarter or whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of IPR&D assets is measured by a comparison of the carrying amounts its fair value.
Net Loss The net loss for the year ended December 31, 2022 wa s $29.0 million, which included non-cash gains of $1.3 million on wa rrants in 2022 as compared to $6.7 million in the prior year and approximately $2.3 million o f stock-based compensation expense in 2022 as compared to $2.4 million in 2021.
Generally, a gain results principally from a decline in our share price during the period and a loss results principally from an increase in our share price. 52 Table of Contents Net Loss The net loss for the year ended December 31, 2023 wa s $29.8 million, which included a non-cash loss of $1.0 million on wa rrants in 2023 as compared to a gain of $1.3 million in the prior year and approximatel y $2.0 million o f stock-based compensation expense in 2023 as compared to $2.3 million in 2022.
Cash used in investing activities Net cash used in investing activities w as de minimis f or the years ended December 31, 2022 and December 31, 2021, respectively. Cash provided by financing activities Net cash provided by financing activities was de minimis f or the year ended December 31, 2022 compared to the prior period of $74.7 million.
Cash used in investing activities Net cash used in investing activities w as de minimis f or the years ended December 31, 2023 and December 31, 2022, respectively.
We record accrued expenses for these costs based on the estimated amount of work completed and in accordance with agreements established with these third parties. 46 Table of Contents We estimate the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services.
We estimate the amount of work completed through discussions with internal personnel and external service providers as to the progress or stage of completion of the services and the agreed-upon fee to be paid for such services. We make significant judgments and estimates in determining the accrued balance in each reporting period.
Recent accounting pronouncements See Note 2 to the Notes to Consolidated Financial Statements in "Item 8 - Financial Statements and Supplementary Data" in this Annual Report for discussion regarding recent accounting pronouncements. 48 Table of Contents
ASC 740 also requires the recognition of liabilities created by differences between tax positions taken in a tax return and amounts recognized in the financial statements. Recent accounting pronouncements See Note 2 to the Notes to Consolidated Financial Statements in "Item 8 - Financial Statements and Supplementary Data" in this Annual Report for discussion regarding recent accounting pronouncements.
Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate. If such review indicates that the carrying amount of property and equipment and amortizable intangible assets is not recoverable, the carrying amount of such asset is reduced to fair value.
Recoverability of these assets is measured by a comparison of the carrying amounts to the future undiscounted cash flows the assets are expected to generate.
Components of our Results of Operations, Net Loss and Financial Condition Operating expenses We classify our operating expenses into three categories: research and development, general and administrative and depreciation. Research and development .
If such review indicates that the carrying amount of IPR&D assets is not recoverable, the carrying amount of such asset is reduced to fair value. Components of our Results of Operations, Net Loss and Financial Condition Operating expenses We classify our operating expenses into three categories: research and development, general and administrative and depreciation. Research and development .
In 2021, approximately $74.7 million was raised predominately through the sale of shares of common stock and the exercise of warrants. Cash used in investing activities for the year ended December 31, 2022 was approximately$0.1 million.
Cash used in investing activities for the years ended December 31, 2023 and 2022 was approximately$0.1 million.
The increase in G&A of $3.1 million was mainly attributable to an increase in regulatory and legal services, and consulting & advisory fees.
General and Administrative Expense General and administrative (G&A) expense was $10.0 million a nd $11.5 million for the years ended December 31, 2023 and 2022, respectively. The decrease in G&A of $1.5 million wa s mainly attributable to a decrease in regulatory and legal services, and consulting & advisory fees.
Cash used in operating activities Net cash used in operating activities was$27.6 million for the year ended December 31, 2022 compared to $19.0 million for the year ended December 31, 2021.
Cash used in operating activities Net cash used in operating activities was$24.1 million for the year ended December 31, 2023 compared to $27.6 million for the year ended December 31, 2022. This decrease in use of cash for operations was mainly due to an overall decrease in expenses, timing of payments, as well as license rights settled in stock.
The increased cash outflows in 2022 was primarily due to payments for increased clinical trial activity, costs related to manufacturing of additional drug product, and increased consulting, legal, and advisory fees. For the year ended December 31, 2022, there were no net proceeds from financing activities.
The decreased cash outflows in 2023 was primarily due to an overall decrease in expenses, timing of payments, as well as license rights settled in stock . For the year ended December 31, 2023, there were $4.7 million in net proceeds from financing activities. In 2022, there were no net proceeds from financing activities.
Liquidity and Capital Resources As of December 31, 2022 , we had cash and cash equivalents of $43.1 million and prepaid expenses and other current assets of $2.5 million. We also had $2.1 million of accounts payable and $2.7 million of accrued expenses and other current liabilities.
Interest income, net Interest income, net increased by approximately $1.1 million for the comparable period due to rising interest rates during the past year. Liquidity and Capital Resources As of December 31, 2023 , we had cash and cash equivalents of $23.6 million and prepaid expenses and other current assets of $2.7 million.
Annamycin was designed to avoid multidrug resistance and has shown no cardiotoxicity 2 in subjects treated in clinical trials to date.
Annamycin was designed to avoid multidrug resistance and to be non-cardiotoxic and has shown no cardiotoxicity in subjects treated in clinical trials to date. Furthermore, we have demonstrated safe dosing beyond the dose limitations imposed by regulatory authorities upon currently prescribed anthracyclines due to their inherent cardiotoxicity.
We calculated the fair value of the warrants outstanding using the Black-Scholes model. Generally, a gain results principally from a decline in our share price during the period and a loss results principally from an increase in our share price.
We calculated the fair value of the warrants outstanding using the Black-Scholes model.
Recoverability of IPR&D assets is measured by a comparison of the carrying amounts its fair value. If such review indicates that the carrying amount of IPR&D assets is not recoverable, the carrying amount of such asset is reduced to fair value.
If such review indicates that the carrying amount of property and equipment and amortizable intangible assets is not recoverable, the carrying amount of such asset is reduced to fair value. 54 Table of Contents Acquired in-process research and development (IPR&D) assets are considered indefinite lived until the completion or abandonment of the associated research and development efforts.
Our financial instruments consist primarily of non-trade receivables, account payables, accrued expenses, and a warrant liability. The carrying amount of non-trade receivables, accounts payables, and accrued expenses approximates their fair value because of the short-term maturity of such.
Proceeds of the December 2023 Offering were allocated between common shares and warrants first by allocating proceeds to the warrants classified as a liability based on their fair value and then allocating the residual to the equity instruments, which includes the Pre-Funded Warrants. Our financial instruments consist primarily of non-trade receivables, account payables, accrued expenses, and a warrant liability.
Removed
We have also recently established a Recommended Phase 2 Dose (RP2D) for WP1122 to potentially enable future externally funded oncology and virology trials.
Added
Annamycin is our lead molecule and is in three Phase 1B/2 clinical trials - one for treating Acute Myeloid Leukemia (AML) and two for treating Soft Tissue Sarcoma metastasized to the lungs (STS lung metastases, STS lung mets, or Advanced STS).
Removed
Beyond this, we support development of our core technologies through several externally funded clinical trials with the potential for others in the near-term. 1 Subject to publishing final Clinical Study Report 43 Table of Contents Our Clinical Trials In the US and Europe, we or external investigators have approved, are currently conducting or have completed eleven internally or externally funded clinical trials for four of our drug candidates – Annamycin, WP1066, WP1220, and WP1122 since inception.
Added
One of our core management beliefs is that anthracyclines represent the most important treatment for AML and Advanced STS, and we believe Annamycin may, for the first time ever, allow a majority of these patients to benefit from this treatment. This belief leads us to currently focus mainly on the development of Annamycin.
Removed
All clinical trials are or were in the Phase 1 or 2 stage. During 2021, we had four active clinical trials evaluating either Annamycin or WP1066 in the US and Europe. This increased to six active or just completed trials in 2022 involving Annamycin, WP1066, and WP1122.
Added
Annamycin is demonstrating efficacy in two of its Phase 1B/2 trials as described further below in subjects with AML and Advanced STS. We believe that Annamycin has potential to fill an unmet need as a second line therapy (2nd line or 2L) in AML and potentially as first line therapy in Advanced STS.
Removed
In 2021 and 2022, there were five “right-to-try” (or their foreign equivalent) uses of Annamycin and WP1066. Three of the six clinical trials active in 2022 are internally funded trials of Annamycin and one is an internally funded Phase 1 clinical trial for WP1122 setting a RP2D.
Added
As part of our Annamycin clinical trials, we have engaged an independent expert in assessing cardiotoxicity associated with chemotherapy at the Cleveland Clinic (Expert or Independent Expert). The data made available to the Expert includes left ventricular ejection fraction (LVEF) as determined by echocardiograms, and ECHO strain imaging, as well as Troponin levels (a biochemical marker of acute heart damage).
Removed
Moving into 2023, we are actively recruiting in three clinical trials in a Phase 1b/2 or Phase 2 stage and have recently concluded one trial. These three currently active clinical trials are open label so we expect to be able to announce what human activity is being demonstrated in these trials during 2023.
Added
“ECHO strain imaging” is a method in echocardiography (medical ultrasound) for measuring regional or global deformation (contraction or beating) of the myocardium (heart muscle). By strain rate imaging, the simultaneous function of different regions can be displayed and measured. Cardiac health biomarkers such as blood Troponin levels are considered an indicator of potential long-term heart damage.
Removed
In February 2023, the externally funded Phase 1 clinical trial with WP1066 or the treatment of pediatric brain tumors concluded. We expect to have up to three externally funded Phase 1b/2 clinical trial for WP1066 in the treatment of GBM and other brain tumors in 2023.
Added
The Expert has issued and will continue to issue periodic reports as additional data are provided to him in batches of subject data. Such data include some data which are preliminary and subject to change. In our discussions regarding the lack of Annamycin’s cardiotoxicity, we rely on the Expert’s assessment .
Removed
During 2022, we or external investigators filed applications or began recruiting for five internally or externally funded clinical trials in the US and Europe. • Annamycin - The clinical trial application (CTA) in Poland for a Phase 1b/2 trial of Annamycin in combination with Cytarabine or AnnAraC for the treatment of AML was allowed in 2022.
Added
Annamycin benefits from a promising advancement in lipid enabled drug delivery developed in collaboration with and exclusively licensed from MD Anderson. The unique patent-pending lipid composition allows us to combine a new concept in chemotherapeutic agents within a lipid structure that helps target the delivery of the payload and reduce the potential for toxicity.
Removed
This trial was later approved to expand into Italy in 2022 and dosing subjects began there in March 2023.
Added
In the case of Annamycin, our unique use of lipid technology enables improved tissue/organ distribution and as demonstrated in multiple clinical trials, dramatically reduced toxicity, including cardiotoxicity. 51 Table of Contents b) Our WP1066 Portfolio includes, WP1066, WP1193 and WP1220, three of several Immune/Transcription Modulators in the portfolio designed to inhibit p-STAT3 (phosphorylated signal transducer and activator of transcription) among other transcription factors associated with tumor activity.
Removed
With preclinical data in mice demonstrating a 68% improvement in activity in AML with AnnAraC over Annamycin alone combined with the human activity demonstrated in the highest dosing cohort in the single agent AML clinical trial, we concluded our single agent Annamycin clinical trial treating AML and focused on this combination trial. • Annamycin - An investigator sponsored trial (externally funded) was initiated in Poland in 2022 to study an alternative dosing regimen for Annamycin in the treatment of STS lung mets.
Added
These also stimulate a natural immune response to tumors by inhibiting the errant activity of Regulatory T-Cells (TRegs). WP1066, in oral formulation, has been in two clinical trials, including compassionate use cases. WP1066 and WP1193 are being tested in preclinical programs in intravenous (IV) formulations. WP1066 and WP1220 have been in clinical trials in a topical formulation.
Removed
This trial began administering drug to subjects in late 2022. • WP1066 - In 2022, an investigational new drug (IND) application we filed in the US for a Phase 1 clinical trial studying WP1066 for treating glioblastoma multiforme (GBM) in adults went into effect.
Added
WP1066 and WP1220 have both independently successfully completed Phase 1 clinical trials and have demonstrated efficacy as described further below. c) Our WP1122 Portfolio contains compounds (including WP1122, WP1096, and WP1097) designed to exploit the potential uses of inhibitors of glycolysis such as 2-deoxy-D-glucose (2-DG).
Removed
Consistent with our strategy of leveraging external funding for many of our clinical trials, we intend to seek to capitalize on external funding with opportunities for an investigator-initiated clinical trial in adult cancer patients in 2023.
Added
WP1122 has completed a Phase 1 clinical study, successfully establishing a Recommended Phase 2 Dose or RP2D.
Removed
We supplied drug product to an externally funded pediatric brain tumor trial with WP1066 up to its conclusion in February 2023. • WP1122 - Our Phase 1a clinical trial of WP1122 in the United Kingdom for the treatment of COVID-19 for which we later received the appropriate authorization to proceed.
Added
Such a formulation will require additional preclinical work prior to a clinical trial. We have established an RP2D for WP1122 to potentially enable future externally funded oncology and virology trials. Beyond this, we support development of our core technologies through several externally funded clinical trials and primarily externally funded non-clinical research, with the potential for further studies in the future.
Removed
This trial began recruiting in 2022, and we completed the trial in late 2022, establishing an RP2D. We are in the process of completing this trial - locking the database and finalizing a clinical study report (CSR).
Added
The increase in R&D of $0.5 million is mainly rela ted to the $1.5 million WPD sublicense termination, which enabled the reacquisition of our intellectual property rights in certain territories, including parts of the European Union. This was offset by $1.0 million in costs related to the timing of costs incurred for clinical trials and sponsored research.
Removed
This RP2D will possibly aid in future externally funded trials for the treatment of certain viruses and cancers as we look for investigator led studies. • WP1122 - In 2022, we filed an IND with the FDA that then went into effect, allowing us to proceed with a clinical trial using WP1122 for the treatment of GBM.
Added
We believe that our cash resources as of December 31, 2023, will be sufficient to fund our planned operations, which include our current Phase 1B/2 clinical programs and preparations for future clinical trials, into the fourth quarter of 2024, without the issuance of additional equity for cash.
Removed
This may lead to an oncology investigator-initiated trial (IIT). Additionally, an investigator filed independently a CTA in Brazil in 2022 to study WP1122 for the treatment of moderate to severe COVID-19. Based on current COVID-19 epidemiology, we do not expect this externally funded trial to be conducted.
Added
This takes into account cash outlays for preparations for clinical trials beyond the current active trials. The continuation of our Company as a going concern is dependent upon our ability to obtain necessary financing to continue operations and the attainment of profitable operations.
Removed
Additionally, we are in discussions with research institutions in the US, Asia, and South America regarding possible externally funded trials or programs involving WP1066 and WP1122.
Added
We may seek additional funding through a combination of equity offerings, debt financings, government or other third-party funding, commercialization, marketing and distribution arrangements, other collaborations, strategic alliances and licensing arrangements and delay planned cash outlays or a combination thereof. We cannot provide assurance that such events or a combination thereof can be achieved.
Removed
In terms of developing preclinical data, we have our own lab and consultants with our employees conducting research and, we sponsor research at MD Anderson to expand the science of our core technologies and possible combinations with other approved drugs.
Added
Stock Offerings In December 2023, the Company entered into a Securities Purchase Agreement with an institutional investor and certain of the Company's executive officers, employees, advisors and a member of its board of directors for the sale by the Company of 240,151 shares (taking into account the reverse stock splits we have completed) of the Company's common stock, and pre-funded warrants to purchase 229,506 shares of common stock (taking into account the reverse stock splits we have completed) in lieu thereof in a registered direct offering.
Removed
We have an National Institutes of Health or NIH funded preclinical study with WP1096 (from the WP1122 portfolio) for the treatment of the Tacaribe Arenavirus. Moleculin Biotech, Inc.
Added
In a concurrent private placement, the Company also sold to the investors unregistered warrants to purchase up to an aggregate of 939,312 shares of common stock ( t aking into account the reverse stock splits we have completed).
Removed
The increase in R&D of $4.6 million is mainly rela ted to increased clinical trial activity, as described above, and costs related to manufacturing of additional drug product. 2 In discussions of “no cardiotoxicity” of Annamycin, management’s beliefs are based on an expert’s opinion based their review of certain clinical trial subject data including LVEF, ECHO strain analyses, and cardiac biomarkers – troponin’s I & T 44 Table of Contents General and Administrative Expense General and administrative (G&A) expense was $11.5 million a nd $8.4 million for the years ended December 31, 2022 and 2021, respectively.
Added
Subject to certain ownership limitations, each Common Warrant has an exercise price of $9.60 per share ( t aking into account the reverse stock splits we have completed), and expires five years from the date of stockholder approval of the Common Warrants (which occurred February 14,2024).
Removed
We believe that our cash resources as of December 31, 2022, will be sufficient to meet our projected operating requirements into the third quarter of 2024. Such projections are subject to changes in our internally funded preclinical and clinical activities, including unplanned preclinical and clinical activity.
Added
Subject to certain ownership limitations, each Pre-Funded Warrant is exercisable into one share of common stock at a price per share of $0.001 (as adjusted from time to time in accordance with the terms thereof).
Removed
We anticipate incurring operating losses for the next several years as we support the preclinical and clinical activities necessary to prepare our drug candidates for successful out licensing, including our efforts to expand our technologies. These factors raise uncertainties about our ability to fund operations in future years.
Added
The combined purchase price of one share of common stock (or pre-funded warrant in lieu thereof) and accompanying Common Warrant was $9.60 ( t aking into account the reverse stock splits we have completed) for the institutional investor, and $10.35 ( t aking into account the reverse stock splits we have completed) for the executive officers, employees, advisors and the member of the Company's board of directors who participated in the offering.

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