Quarterly report pursuant to Section 13 or 15(d)

Nature of Business and Liquidity

v3.10.0.1
Nature of Business and Liquidity
6 Months Ended
Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Nature of Business and Liquidity Nature of Business and Liquidity
 
The terms “MBI” or the “Company”, “we”, “our” and “us” are used herein to refer to Moleculin Biotech, Inc. MBI is a clinical stage pharmaceutical company organized as a Delaware corporation in July 2015 to focus on the development of anti-cancer drug candidates, all of which are based on license agreements with The University of Texas System on behalf of the M.D. Anderson Cancer Center, which the Company refers to as MD Anderson. MBI has three core drug technologies: a uniquely designed anthracycline (Annamycin), a portfolio of STAT3 inhibitors (WP1066 Portfolio) and a collection of inhibitors of glycolysis (WP1122 Portfolio). The Company's clinical stage drugs are Annamycin, an anthracycline designed to avoid multidrug resistance mechanisms with little to no cardiotoxicity being studied for the treatment of relapsed or refractory acute myeloid leukemia, more commonly referred to as AML, and WP1066, an immuno-stimulating STAT3 inhibitor targeting primary brain tumors and brain metastases, pancreatic cancer and hematological malignancies. MBI is also engaged in preclinical development of additional drug candidates, including additional STAT3 inhibitors and compounds targeting the metabolism of tumors.

In June 2018, MBI formed Moleculin Australia Pty. Ltd., (MAPL), a wholly-owned subsidiary, to begin preclinical development in Australia for WP1732, an analog of WP1066. This may enable the Company to enjoy the benefits of certain research and development tax credits in Australia.

The Company currently has six drug candidates representing three substantially different approaches to treating cancer. Liposomal Annamycin, which MBI refers to as Annamycin, is a chemotherapy designed to inhibit the replication of DNA of rapidly dividing cells. WP1122 and its analog, WP1234 are inhibitors of glycolysis intended to cut off the fuel supply of tumor cells, which are often overly dependent on glycolysis as compared to healthy cells. And, finally, the Company believes that WP1066, WP1732, and its analog, WP1220, have shown capability, in in vivo testing, of altering the cell signaling associated with tumors. The Company has two drugs in three clinical trials.

The Company's most mature drug candidate is Annamycin, an anthracycline being studied for the treatment of relapsed or refractory AML. Annamycin had been in clinical trials pursuant to an investigational new drug application or IND that had been filed with the U.S. Food and Drug Administration, or FDA. Due to a lack of development activity by a prior drug developer, this IND was terminated. To permit the renewed investigation of Annamycin, the Company submitted a new IND for a Phase I/II trial for the treatment of relapsed or refractory AML in August 2017, which the FDA allowed to go into effect in September 2017. The trial in the US is open and is actively recruiting.

The Company has five other drug development projects:

• WP1066 has an approved physician-sponsored clinical trial open for enrollment for the treatment of brain tumors and is also being evaluated for potential treatment of AML and pancreatic cancer,
• WP1220, an analog of WP1066 is being studied for the topical treatment of cutaneous T-cell lymphoma (CTCL) and MBI expects to file a Clinical Trial Application ("CTA") prior to year-end,
• WP1732, another analog of WP1066, that it believes is particularly well suited for intravenous administration, is being evaluated for potential treatment of AML, pancreatic and other cancers, and MBI has begun pre-clinical work which we expect to generate sufficient data for an IND by year-end, and
• WP1122 and WP1234 are being evaluated for their potential to treat brain tumors and pancreatic cancer via their ability to inhibit glycolysis.

The Company has been granted royalty-bearing, worldwide, exclusive licenses for the patent and technology rights related to all of MBI's drug technologies, as these intellectual property rights are owned in part or entirely by MD Anderson. The Annamycin drug substance is no longer covered by any existing patent protection, however, the Company intends to submit patent applications for formulation, synthetic process and reconstitution related to MBI's Annamycin drug product candidate, although there is no assurance that the Company will be successful in obtaining such patent protection. Independently from potential patent protection, MBI has received Orphan Drug designation from the FDA for Annamycin for the treatment of AML, which may provide tax and other benefits during product development and if the product is approved for AML, may lead to a grant of seven-year market exclusivity. Under that exclusivity, which runs from the date of the approval of the New Drug Application (NDA) in the United States, the FDA generally (there are important exceptions) could not approve another Annamycin product for AML. The Company also intends to apply for similar status in the European Union (EU) where market
exclusivity extends to 10 years from the date of Marketing Authorization Application (MAA) approval. Separately, the FDA may also grant market exclusivity of 5 years for newly approved new chemical entities (which the Company believes Annamycin would be one), but there can be no assurance that such exclusivity will be granted.

With regard to additional potential clinical activity, the Company received Polish National Office approval in June 2018 for a Clinical Trial Authorization ("CTA") in Poland, which enables the Company to begin a Phase I/II clinical trial there to study Annamycin for the treatment of relapsed or refractory AML. The Company has one site in Poland open for the trial. This will be in addition to the previously announced allowance of MBI's IND in the United States. The start of clinical trials in Poland is expected to begin in the second half of 2018. In the US, the Company has three sites recruiting patients and ready to provide treatments. Patient treatment began in the US in March of this year. In addition, the Company continues to recruit and contract with clinics both in the United States and Poland. The Company can provide no assurance of additional recruitment or that treatments will occur in the near term and on a timely basis, if at all.

  In July 2018, the physician-sponsored WP1066 trial IND for the treatment of glioblastoma opened for recruitment. 

On May 1, 2018, the Company engaged another contract research organization ("CRO") to evaluate additional countries for the expansion of our AML clinical trial, specifically Australia and several Western European countries to provide additional clinical sites to improve access for patients to MBI's Phase I/II trial. This evaluation is ongoing.

In September 2017, the Company engaged a CRO to prepare for a proof-of-concept clinical trial in Poland to study its drug candidate WP1220, a part of the WP1066 portfolio, for the treatment of CTCL. The Company filed a CTA in Poland for this use, which if approved, will give the Company its third drug in a clinical trial.

  In accordance with FASB ASC Topic 280, Segment Reporting, the Company views its operations and manage its business as principally one segment. As a result, the financial information disclosed herein represents all the material financial information related to its principal operating segment.

Prior to MBI's initial public offering, the Company acquired Moleculin, LLC which was merged with and into MBI. Moleculin, LLC was the holder of a license agreement with MD Anderson covering technology referred to as the WP1066 Portfolio, which is focused on the modulation of key oncogenic transcription factors.