Aptose Biosciences Inc (APTO) 2018 Q3 法說會逐字稿

Good morning, ladies and gentlemen, my name is Catherine, and I will be your conference operator today. I would now like to welcome everyone to the Aptose Biosciences conference call for the third quarter ended September 30, 2018. (Operator Instructions) As a reminder, this conference call may be recorded.

I would now like to introduce Susan Pietropaolo. Please go ahead.

Thank you, Catherine. Good morning, and welcome to the Aptose Biosciences conference call to discuss financial and operational results for the third quarter ended September 30th, 2018.

I'm Susan Pietropaolo, a Communications representative for Aptose Biosciences. Joining me on the call today are Dr. William G. Rice, Chairman, President and CEO; and Mr. Gregory Chow, Senior Vice President and Chief Financial Officer.

Before we proceed, I would like to remind everyone that certain statements made during this call will include forward-looking statements within the meaning of U.S. and Canadian securities laws. Forward-looking statements reflect Aptose's current expectations regarding future events but are not guarantees of performance and it is possible that actual results and performance could differ materially from these stated expectations. They involve known and unknown risks, uncertainties and assumptions that may cause actual results, performance and achievement to differ materially from those expressed.

To learn more about these risks and uncertainties, please read the risk factors set forth in Aptose's most recent annual report on Form 20-F and the SEC and Sedar filings. All forward-looking statements made during this call speak only as of the date they are made. Aptose undertakes no obligation to revise or update the statements to reflect events or circumstances after the date of this call, except as required by law.

I will now turn the call over to Dr. Rice, Chairman, President and CEO of Aptose Biosciences. Dr. Rice?

Thank you, Susan. I'd like to welcome everyone to our call for the quarter ended September 30, 2018. Those of you on the call already know that Aptose is developing 2 exciting hematology drugs, APTO-253 and CG-806. While mechanistically, they are distinct from one another, both have thus far demonstrated robust safety profiles. One of the characteristics that distinguishes them from many other hematology drugs on the market.

Preclinical findings for both have been compelling, and we now have reached important junctures in their development. We just recently announced that we have reinitiated the Phase Ib clinical trial with APTO-253, our small molecule MYC inhibitor. And first today, I'll bring you up-to-date on that product candidate and our clinical strategy.

Next, we will discuss our small molecule pan-FLT3/pan-BTK inhibitor, CG-806, that is approaching IND stage. We continue to uncover characteristics for this drug candidate that make it even more compelling, and we are being very disciplined in its development to give the best possible chance for its success.

We will also review a few business highlights for the quarter, and following these updates, Mr. Greg Chow will review our quarterly financials. Following the financial update, we will then open the call for your questions.

So first, I'm pleased to bring you up-to-date on APTO-253, which recently returned to the clinical setting with a new formulation, following a high risk due to a manufacturing issue with the original formulation. For those of you who may be new to Aptose, APTO-253, or just 253 as I will call it, is the only known clinical-stage molecule that has the potential to directly target the MYC oncogene and inhibit MYC expression.

MYC dysregulation is a common driver in many malignancies, including acute myeloid leukemia, or AML, making an attractive therapeutic target. However, other therapies directed at MYC are limited by severe toxicities, drug resistance, myelosuppression and the difficulty in targeting the MYC protein itself.

Aptose researchers have reported the ability of 253 to induce apoptotic cell death and multiple blood cancer cell lines, including AML as well as in vitro synergy with various classes of conventional approved and investigational therapies for AML or myelodysplastic syndromes, or MDS.

We believe that 253 has the potential to benefit a large patient population across various therapeutic areas. In fact, during our last call, we discussed data that revealed a synthetic lethal interaction of 253 in cancer cells that are deficient in BRCA1 or BRCA2 function, causing these sales to be hypersensitive to 253 and suggesting potential solid tumor indications for 253. This is a compelling path for 253, but because MYC is well validated as a target in AML, and AML cells have exhibited a particular sensitivity to 253, our initial focus remains on AML.

As you are aware, we received allowance from the FDA to resume dosing of patients for 253 and the Phase Ib clinical trial in patients with relapsed or refractory hematologic malignancies, and we initiated screening for appropriate patients to place on the trial.

We overcame significant challenges to get to this point, and we're pleased to be back to the clinic setting and moving forward. The Phase Ib multicenter, open-label dose-escalation clinical trial of 253 is designed to assess the safety, tolerability, pharmacokinetics and pharmacodynamic responses and establish the recommended Phase II dose and efficacy of 253 as a single agent.

253 will be administered once weekly, over a 28-day cycle. The study is expected to enroll up to 20 patients with relapsed or refractory AML or high-risk MDS.

The study is designed to then transition to single agent expansion cohorts in AML and MDS, followed by combination studies. The protocol requires only 1 patient at each of the 2 lowest dose levels, and we explained at several investor conferences during October that we are very carefully selecting patients for the first 2 dose levels. Relapsed/refractory AML patients tend to be acutely sick, and we seek to complete those 2 lower dose levels with a favorable tolerability profile and with only 1 patient per dose level. We hope this meticulous approach will allow escalation to higher dose levels and may provide greater benefit to AML patients.

For this reason, a number of AML patients during the screening process were not enrolled in the trial because of their advanced disease. To clarify it further, if a dose-limiting toxicity is observed in a patient on dose level 1 or dose level 2, then the cohort may require expansion from 1 patient to 6 patients, and that could dramatically impact our time lines, even more than upfront delays in selecting an appropriate patient that is less likely to experience a DLT. In addition, while the dosing schedule for trial remains at 20, 40, 66 and 100 mgs per meter squared, similar to the original clinical protocol, the new 253 formulation has been shown in preclinical testing to deliver 3x the exposure level relative to the original formulation, and lower dose levels could allow efficacy, which of course, remains to be proven.

Up to 15 clinical centers are expected to participate in the Phase Ib trial, and we currently have 3 clinical sites initiated and were actively screening patients for the study. We'll continue to bring clinical sites online and expect 4 to 5 other sites to be initiated during November, and we still expect to fill the first 2 cohorts during 2018 and then expect to complete the dose escalation during 2019.

We are pleased to be back to the clinic with 253 and working with skilled clinical investigators, and we look forward to reporting our progress.

One final note regarding 253 and this highlights the importance of understanding the mechanism by action of the drug. Many B-cell malignancies are reported to over-express c-Myc and to depend upon MYC for survival. Consequently, we found that B-cell cancers cell lines as well as bone marrow samples from B-cell malignancy patients, such as CLL and AML, are surprisingly sensitive to 253, and we plan to explore amending our IND to include such patients in our phase I clinical trial.

Now let me turn to CG-806. Aptose's first-in-class pan-FLT3/pan-BTK multi-cluster kinase inhibitor.

806 is an oral agent for the treatment of patients with AML and certain B-cell malignancies. As such, 806 has the potential to address tremendous unmet needs in multibillion-dollar markets.

806 is also being developed in a manner designed to derisk the molecule and rapidly seek clinical proof of concept in multiple hematologic malignancy indications.

Our preclinical work with 806 demonstrated: one, its superior potency and and breadth of activity on AML patient samples, relative to other FLT3 inhibitors; two, its superior ability to kill B-cell malignancy patient samples relative to ibrutinib, the current standard of care; and three, a favorable safety profile with the ability to eliminate tumors in animal models. We and our scientific advisers are particularly excited about 806 and believe it has the potential to service the transformational agent for multiple hematologic malignancies, including AML, CLL and others.

In our last call, we reviewed much of the science that was presented earlier in the year at AACR and the European Hematology Association, or EHA, meetings. Highlighting the differentiation of 806 from ibrutinib and other BTK inhibitors. As we mentioned, we considered covalent BTK inhibitors to reside in 1 bucket of agents, the various other non-covalent BTK inhibitors to reside in a second bucket of agents and then 806 to reside in a completely separate bucket.

806 is more than just a non-covalent BTK inhibitor, as it targets to wild type and mutant BTK driver kinesis as well as the operative rescue pathways, represented by FLT3, the AKT/mTOR, S6K Pathway, the histone 3 (Ser10), or H3S10, pathway and the ERK, MYC pathway.

In simplified terms, other drugs have -- may have the initial treatment effect on BTK driver pathways, but alterations and proteins or -- excuse me, of the B-cell receptor pathway or other rescue pathways emerge and cause drug resistance.

806 inhibits the wild type and mutant forms of BTK as well as multiple rescue pathways and this allows it to more effectively kill the cancer cells.

During our Cantor Fitzgerald presentation in October, we presented results from a preclinical murine study, that demonstrated the ability of 806 to eliminate tumors at doses that generated no observed toxicity. All of these presentations are available on our website and are all subject to another review of all of the existing data as exciting as we think they are. But we encourage to take a look if you haven't already. Suffice to say, while these are preclinical studies, the data continue to well differentiate 806 from other BTK and FLT3 inhibitors.

A safe and potent agent that inhibits all forms of BTK and all forms of FLT3 driver kinases as well as other key rescue pathways would address tremendous unmet needs for AML patients and for B-cell cancer patients, who are intolerant, refractory or resistant to other inhibitors. And we very much look forward to getting into patients with 806. So let we bring up-to-date on the status of 806, where we have some important developments.

Our development plan for 806, following allowance of an IND, is to begin treating immediately patients with B-cell malignancies that are resistant refractory or intolerant to ibrutinib or other covalent or non-covalent BTK inhibitors. In parallel, due to the favorable toxicity profile of 806 observed thus far, the plan includes a rapid single ascending dose, or SAD, pharmacokinetic study in healthy volunteers in order to identify a dose that would be expected to deliver a therapeutic exposure level of 806 in patients with AML, which is a sicker patient population than those with more chronic B-cell malignancies. This is an approach that was first suggested by the FDA after review of 806's clean safety profile.

Once that likely therapeutic dose is identified in healthy volunteers, and if the favorable safety profile holds up, Aptose plans to present the data to the FDA and seek to move that therapeutic dose directly into AML patients. Importantly, without the need to dose patients with lower dose levels that are likely subtherapeutic.

A healthy volunteer SAD study will provide several benefits to Aptose. It provides faster recruitment of patients, rapid dose escalation and rapid collection of PK data, using multiple doses of 806. It helps us to determine therapeutic dose, dose levels sooner. It accelerates the collection of human safety data, which is more complicated in sicker patients, and most importantly, it enables Aptose to start doses -- start dosing AML patients at potentially a therapeutic dose level.

On the other hand, additional preclinical safety tests are required before any drug is taken into healthy volunteer, whereas, such studies are not required before a drug is dosed in cancer patients. The study is required for healthy volunteers, including genotoxicity, mouse, CNS, mouse respiratory and dog cardiovascular safety studies, and those cannot be performed properly until the GLP toxicology studies have been completed and an understanding of the dose-related tolerances and toxicities are defined.

Now that we have completed the GLP toxicology studies and found 806 to be very well tolerated, we made the decision to remove the molecule through the healthy volunteer path to AML patients and to perform the additional safety studies. Let me emphasize, this study is feasible and preferred, because 806 is so well tolerated, it is not the result of any safety concerns from the GLP toxicology studies.

So while the healthy volunteer study and some of the additional safety studies it requires have moved our IND filing into early 2019. We concur with the approach first brought to us by the FDA, this includes starting the trial by taking 806 directly into B-cell cancer patients, and in parallel, performing a healthy volunteer SAD study to identify a potential therapeutic dose for the acutely AML patients and then taking that potential therapeutic dose directly into AML patients. This approach spares the acutely ill AML patients from taking a subtherapeutic dose, it significantly de-risks 806, and allows us to potentially see proof of concept from an -- from the AML trial earlier, even potentially leading to immediate responses in AML patients. And we are well underway in our IND preparation efforts.

As a reminder, in animal efficacy studies, we demonstrated that once-daily oral dosing with 10 mgs per kg delivered strong antitumor activity, while in GLP toxic studies, we performed twice daily dosing in an effort to drive toxicity. We have completed the standard GLP toxicology studies and expect to receive the formal report soon.

Dosing of 300 mg per kg twice daily in mice and 120 mg per kg twice daily in dogs were well tolerated and produced no demonstrable toxicities. The dosing limitation was literally the massive amount of drug being consumed and leading to the loss of appetite or emesis in the animal species.

Importantly, these well-tolerated doses appear to be considerably above the therapeutic doses, and we are encouraged by therapeutic windows that we have seen thus far.

Ultimately, we expect bone marrow suppression to become the dose-limiting toxicity with higher dose levels. Also, we now have completed additional CNS and respiratory safety studies in mice as well as the Ames genotoxicity study and all of these studies were clean. Currently, we are conducting the cardiovascular safety study in dogs.

Preliminary observations continue to confirm the favorable safety profile of 806. We certainly are eager to collect all of the data to demonstrate stability of our 2 dose strength capsules for the clinical supply to file our IND and to get this drug candidate into the clinic as soon as possible.

So now let's address ASH in the upcoming -- and an upcoming KOL event. Our research for partners will be presenting some additional 806 data at this year's ASH meeting, the American Society of Hematology 60th Annual Meeting, this is being held December 1 through 4 this year in San Diego. On November 1, 2018, we announced that new preclinical data will be presented in 2 separate poster presentations at ASH. The OHSU Knight Cancer Institute and Aptose will present data in 1 poster, and the team of The University of Texas MD Anderson Cancer Center will present data in a separate poster. These presentations will highlight several key findings. First, in collaboration with MD Anderson, orally administered 806, demonstrated efficacy in a patient drives xenograft, or PDX study, in which the bone marrow cells from a patient with AML having dual ITD and D835 mutations in FLT3 were implanted into a mouse.

The dual FLT3 mutant form of AML represents a very difficult-to-treat population, and the PDX model suggest that 806 may be useful in treating such patients. Second, in collaboration with OHSU Knight Cancer Center, studies of 806 and 124 samples of freshly isolated bone marrow from CLL patients, demonstrate that 806 exerted broader activity and greater [CLL potency] than ibrutinib.

In addition, in studies of 806 on AML patient bone marrow samples, we recently identified a previously undiscovered sensitivity in a subpopulation of patients with a particular mutation, and we plan to disclose that genetically defined subpopulation at the ASH meeting. In that poster, Aptose also plans to include high-level data from preclinical GLP toxicology studies, that demonstrate orally administered 806 is a well-tolerated molecule.

Separately, on Monday of this week, November 5, we announced that in December, Dr. Brian Druker, who is the chair of our Scientific Advisory Board, has agreed to host our first-ever KOL event and share his perspectives on the needs of hematologic malignancies and answer questions on how he believes 806 may best serve their needs. That KOL event will be held on the 12th of December in New York and will also be webcast.

As many of you know, Dr. Druker is best known for his role in developing Gleevec for patients with chronic myeloid leukemia, or CML, and he holds numerous investigators awards. We have often held up the quality of Aptose's distinguished researchers and advisers and Dr. Druker is among this elite team. We're very pleased to have such strong KOL and leadership support, and have Dr. Druker present and share our enthusiasm about 806 with you, so please mark that KOL event on your calendar.

Let me now quickly touch on a few additional news highlights from the quarter. In September, we added to our patent estate with the issue of the European patent for CG-806. The grinded patent claims various compounds, including the 806 compound, pharmaceutical compositions, comprising the 806 compound and uses for the treatment for various diseases including cancer. The patent adds to the previous issued 806 patents in the U.S. and Japan as is expected to provide protection until the end of 2033.

In addition, this year 806 received a patent allowance in China, and this represents an important market into the future for 806. We also welcomed Ms. Carol Ashe to our Board of Directors. Ms. Ashe is an accomplished executive leader with more than 25 years of experience in the pharmaceutical and biotech industry, and she currently serves as a Chief Business Officer for the New York Genome Center, we're happy to be working with her.

I will now turn the call over to our Chief Financial Officer, Mr. Greg Chow, who will review results from the quarter.

Thank you, Bill, and good morning, everyone. We ended the quarter with $15.6 million in cash, cash covenants and investments compared to $18.5 million at June 30, 2018. Subsequent to the September 30, 2018, we raised approximately $3.6 million (sic) [$3.7 million] in the At-The-Market facility with Cantor Fitzgerald, a further $1.5 million through the common stock (sic) [share purchase agreement] with Aspire Capital. Today, we have more than $19 million in cash equivalents and investments, which provides more than 12 months of cash runway.

During the quarter, we utilized approximately $4.5 million of cash in our operating activities compared to $2.1 million for the third quarter in 2017. This increase in cash use was due to increased activity surrounding 253 and 806 during the recent quarter.

Moving on to the income statement, we had no revenues for the quarter. Research and development expenses were $3.6 million compared to $1.4 million for the same quarter in 2017, this increase is primarily due to increased 806 development activities, which included the GLP animal tox studies in rodents and dogs as well as the GMP manufactured API and drug supply to be used in those GLP animal toxicity studies and the clinic.

continuing development on improving GMP formulation for 806 and 253 and increased salaries related to increased headcount in clinical operations to prepare for the return of 253 to the clinic.

G&A expenses for the quarter were $2 million compared to $1.3 million for the third quarter in 2017. This increase was primarily due to an increase in stock-based compensation; and increases in administrative costs, such as Investor Relations, technology, travel and office-based expansions supporting the growth in the company's operations.

Finally, our net loss for the quarter was $5.5 million or $0.16 per share compared to $2.6 million or $0.11 per share for the third quarter in 2017.

I would now turn the call back over to Dr. Rice. Bill?

Thank you, Greg. I'd like to open the call for questions. Operator, if you could please introduce the first question.

(Operator Instructions) Our first question comes from Jotin Marango with Roth Capital.

So I think the dose titration in health is before going into AML is actually a really good idea that will probably save time. When it comes to the dosing in B cell tumors, which I understand would continue in parallel, by now, it's couple of companies that are dosing second-gen BTK inhibitors in B cell tumors. By second-gen, I mean reversible. So based on what we know from these, about their assays and the preliminary clinical data but also being aware of the time when you will enter this narrative in the clinic, what do you think is important to keep in mind as you contemplate positioning this study? Sort of is it an indication approach, a basket approach, a mutation-specific approach? Sort of any thoughts on that?

Jotin, thanks for the question. So there's quite a bit to unpack in that question. But yes, we keep an eye on the other, I'll call it, the competitor molecules that are going through the clinic, especially these -- the BTK inhibitors for CLL as well as the other B cell malignancies. So we position our compound, as we mentioned, as -- it's in a completely different bucket than the covalent or the non-covalent BTK inhibitors. The covalent -- we know that the covalent inhibitors, they lead to the mutations that give drug resistance, and that's why -- that's what spawned the next generation -- that second generation of BTK inhibitors that are non-covalent. Those -- typically, those molecules are going after the patients who have failed the covalent inhibitors. So -- and they're reviewing the biomarkers you talked about, also BTK, CCL3 as various biomarkers and they're watching for efficacy. We also see that it can be difficult to accrue the patients, but I think that has picked up. I think they're beginning to see -- as they get into higher levels, they're beginning to see benefit, reductions in the markers, of also BTK and CCL3, and we actually hope they're going to be showing benefit. But again, we are hopeful that those molecules will do well, but we are positioning ours quite differently. We believe that we can go after the patients that have failed the covalent or the non-covalent BTK inhibitors because we inhibit not only all forms of BTK but also those other -- what we call the rescue pathways. And what we see is, in the various cells, you can take a variety of B cell malignancy cells in cell culture, you can treat them with these other drugs. And what you can see is the emergence of these other pathways that rise up to rescue the cells. And we're able to hit enough of those pathways to kill the cells quite effectively. So we think we are completely different molecule. We're able to go after, we believe, all of the B cell malignancies that are -- well, I shouldn't say all the B cell malignancies, but those patients who were relapsed or refractory to either the covalent or the non-covalent inhibitors. We've seen great activity against all the different forms of B cell malignancies that we've looked at from patient isolates, except for the multiple myeloma. So that positions us well for broader B cell malignancies, both the leukemias and the lymphomas. Does that adequately answer your question? Or are there other particular aspects that you would like to hear?

Yes. No, that's good. Maybe as an extension of that, I have 2 questions about the ASH abstract. So the first one, which maybe sound related to what we just spoke about, one of the abstracts is the comparison of 806 and ibrutinib, and you presented some data from this previously. It may have been ASCO or EHA So today, I think, or yesterday, BeiGene has started dosing in a global Phase III of zanubrutinib head to head versus ibrutinib in CLL. So I'm curious if you have any comparative data between 806 and ibrutinib or if we are even able compare them apples to apples based on biochemical assays to the extent that, that is appropriate.

So we have direct -- data where we've compared directly to ibrutinib but not the other covalent BTK inhibitors. So as you mentioned, in the poster, we presented some of data earlier, but it's going to be a more robust presentation at ASH this year, where we show clear superiority in killing the cells of 806 over ibrutinib. It's often 100 to 1,000x more potent in directly killing those cells. Again, it's because we hit BTK as well as the other pathways. I suspect we would have the same comparison regarding the other covalent BTK inhibitors, but we don't have any data on it at this time to directly address that.

Got it. And the other abstract, which, when I read it last week, I thought it was very interesting. It shows this synergy in action between FLT3 and BTK in myeloid models. As I think back at that initial slide that every AML study puts up at ASH, BTK doesn't really feature prominently in that map of gatekeeper in driver of mutation in AML. There's been a couple of presentations out there about BTK tackling in AML models, and we've seen only 1 study with ibrutinib in AML by Jorge Cortes, which didn't show anything. I think it was monotherapy. And combo is low-intensity treatment. What do you think went on there in that study, sort of using ibrutinib and not seeing much? Do you think it was a question of patient selection or maybe it should have been a combo or a biomarker selection? Do you have any views on that?

Look, when we take a variety of AML cells, every cell uses a different set of pathways. So we look at all the pathways that we can in all the different cell lines or in the patient samples. And in many of the samples, we do see that the BTK pathway is active, and we can clearly see that our drug is turning off the BTK in those cells. But if you only inhibit BTK in AML cells, it doesn't really effectively kill them. If you look at the concentrations, in all those publications, of ibrutinib, it was typically 5 to 10 micromolar levels that were required to kill the AML cells. At that level, that's just general toxicity. You have to remember that ibrutinib inhibits the BTK down in the 2 to 3 nanomolar range, but if you're not killing the cells to a 5 to 10 micromolar, it's just general toxicity. So I think BTK does -- can and does play a role in some AML cells, but just inhibiting BTK alone is insufficient to kill the cells. And as you said, it would require combination effect, and that's why we think our drug works so well. It's the FLT3, the BTK and the other pathways knocking multiple legs out from under the table.

Our next question comes from Joe Pantginis with H.C. Wainwright.

Wanted to ask a question. If you could provide a little more color on 253 screening in the relapsed/refractory AML population. You did mention, obviously, that there have been some screening failures because the patients were just too sick or too acute. So in the relapsed/refractory group, what's the optimal screening win, if you will, while still -- before you hit the too-sick status?

Joe, thanks for coming on so early and asking a question. So this one has been a challenge. The reason is -- again, we only have to have 1 patient at each of the lower-dose levels, and we want to make sure we're trying to do everything we can to get patients with a reasonable performance status on those 2 dose levels. Those are potentially subtherapeutic levels. We want to get 1 patient on and not have to expand out to 6 patients. So any time you're screening for these AML patients, you set certain criteria -- entry criteria. And what we've said is they have to have a 2-month life expectancy to get on to these levels. And that's not easy for these patients because when patients -- you have remember, the relapsed/refractory AML patients have failed effectively every other therapy out there. They are the most resistant patients to drug therapy. Their life expectancy is very short. And even from the time that they wash out from a prior clinical trial to the time they can get into our trial, very often these patients will die, they'll go into hospice. And it's very difficult to find patients with a reasonable performance status. I'm much more comfortable putting those very ill patients on the higher-dose levels because we think we'll see efficacy at those levels. But we're reluctant to put one of those on the very lowest dose levels because, if we don't get through that first cycle, the 28-day cycle, and if we have DLTs there and we have to expand out to 6 patients, then that can dramatically extend our time frame. And so we're willing to take this delay upfront to try to get the best possible patients to those dose levels. What's interesting, we've talked to a lot of other companies developing AML drugs over the years, and we all called that early part of the clinical trial the valley of death for all of us. We're just sitting there, treating patients subtherapeutically. All we're getting is the toxicities associated with these very ill patients. You see the DLTs, you have to expand out to 6 and just your time frame just gets extended so much. So we think it's actually more ethical, this pathway that we're taking. We think it's more expeditious and will help us to increase the dose levels earlier and faster. But it's painful sitting here and going through this. So what's interesting is we're only doing 1 patient in each of those dose levels in this study, and it's kind of the same reason we're looking at not doing any subtherapeutic dosing with 806 later. So it's the same mentality, well-tolerated drugs, very few patients at these dose levels that are subtherapeutic so that you can get into the therapeutic levels. So that's our take on it, and its -- again, it's very painful as we wait to find some of these patients. But we literally have, I think, about 3 of these patients that we are ready to put on the study, and suddenly, they didn't show up. They went into hospice. That's how sick these patients are, and we just have to be careful.

(Operator Instructions) And now have a question from Matthew Bilter (sic) [Matthew Biegler] with Oppenheimer.

It's Matt Biegler. That was a good try. So Bill, maybe if you could just give us a little bit more detail on the dose escalation phase for 806. So in the healthy volunteer portion, how long do you have to wait before you can dose the next patient? And then just to clarify, in the parallel ongoing cohort in B cell malignancies, is that employing the more traditional 3 plus 3 dosing kind of style? And then also, how long would you have to wait to move on to the next dosing cohorts in the B cell malignancy portion?

Okay. So let's -- well, thanks for coming on Matt Biegler with the correct pronunciation of your name. Okay. So to the trials. So again, what I'm going to say here is our best guess because we still have to present all of this to the FDA in our IND application. So that's the caveat. Going into the B cell malignancy patients. What we would propose is even at the -- in those patients just to do 1 patient. This drug is so well tolerated. We would propose to do 1 patient at each of the lowest dose levels, at least 2 of the lower-dose levels. And then possibly, once you see a DLT, then you go 3 by 3 after that. So that would help us dose escalate quickly, and it would also minimize the number of patients that are getting exposed to a potentially subtherapeutic dose. Even though these are more chronically diseased patients and not necessarily dying day 1 like the AML patients, you still want to be ethical with these patients. You want to minimize the number of patients treated. So that's what we will be proposing to the FDA. I'm not going to speak to our starting dose now because we're still working through that. But we believe the dose level that we're going to be -- that we'll be starting at and we'll be proposing to the FDA is actually going to be a significant exposure. But again, we believe it's very safe. So that's the B cell malignancy patient population. Then in parallel, we want to do the healthy volunteer study. So in a study like that -- and again, I'm going to talk about what we're proposing to the FDA and then they have to agree to this. But typically, in these single ascending dose studies, the SAD studies, you give -- you might take, let's say, 6 patients at the lowest dose levels, and you give 1 dose and then you follow the PK over the period of a week. You might take 4 patients on your drug and 2 patients on placebo. And even in these healthy volunteers, you need to do a placebo because if something happens, you need to know was it due to your drug or is it due to the excipients. So typically, we would expect it will take about 2 weeks in total before we go from one dose level up to the next one and then give -- again, a single dose, collect the PK and then after -- 2 weeks after dosing that level, go up to the next one. So we're predicting we might do 4 to 6 dose levels, 2 weeks in between each. So you can do the math, and you can see a study like that would take several months to complete. But during that period, we will be collecting all of these data. You can get these patients on immediately. It's not like AML patients. So you can enroll these patients at Phase I sites, all of them simultaneously at a particular dose level, both on drug and placebo, collect the data and the PK real time. And then once we get to a dose level that we think is therapeutic, we may continue dose escalating a bit in those patients -- excuse me, in those healthy volunteers just to collect additional data. But, once we reach that therapeutic dose level, then we present that to the FDA to go directly in the AML patients. And again, this -- those several months where we're in this healthy volunteers, that would save us so much time in the AML trial because we're not getting all the negative data from these very ill patients and the risk of having to expand out those dose levels there. And we believe we can actually achieve proof of concept in the clinic, either out of the same time frame or even earlier going this path, in the AML patients. Did that answer your question?

Yes, that makes a lot of sense. It seems like it should be an expedited strategy as well. So maybe if I could also just sneak one quick question on 253 now that the Phase III (sic) [Phase I] is up and running. So we know that MYC...

Phase I. Yes, Phase I, yes.

Oh sorry, yes. So we know that MYC is pretty widely relied on by cells for -- all cells for growth and differentiation. And I'm just wondering if you could walk us through some of your findings from preclinical studies that give you confidence that 253 has a safe therapeutic window.

Yes. So it really comes down to -- any time you're trying to kill a malignant cell versus a normal cell, you're hitting targets that are in normal cells. But it really comes down to, the cancer cells, where they have altered the various signaling pathways, they become dependent on particular proteins. In this case, MYC is a -- it is a key transcription factor. Yes, it's required in normal cells, but you can easily disrupt the expression of MYC in normal cells, and then they recover, they're fine. So normal cells can go through that all the time. But if you have a sudden reduction in MYC in a malignant cell, those cells going -- it induces apoptotic cell death, and it's because there's a dependency upon the MYC for maintenance of the signaling pathways and viability. So in preclinical studies, this 253 was remarkably well tolerated. And ultimately, we didn't see bone marrow suppression in the animal models. We haven't seen it in humans in the past. So we -- again, very well tolerated. We know that we can even take on normal PBMCs from normal healthy volunteers, we can treat with 253. The MYC is inhibited, but the cell didn't die. So the MYC is able to recover. So it really comes down to the dependency. And just like Dr. Druker, he developed a drug that hits the BCR–ABL. In reality, it's only hitting the ABL kinase, the ABL kinase is in normal cells, but there's a dependency on that ABL kinase once you get the BCR–ABL in those cells in CML. So again, it comes down -- it's the same thing. It's just the dependency -- you're targeting the dependency.

Okay. Well, one -- I'm sorry, did I say several weeks or several months for the dose levels? So as we go in the dose levels in the healthy volunteer, it's a couple of weeks in between each dose level, not months. But the full study would take several months because...

Yes. You said it would be several weeks.

Okay. All right. I just want to be certain. Okay, thanks. I want to make sure I didn't misspeak on that one. Okay, thanks.

And I'm showing no further questions at this time. I would like to turn the call back to Dr. Rice for closing remarks.

All right. Well, thank you, everyone, for joining us this morning. We'd like to thank our shareholders and analysts for your continuous support of Aptose and also our employees for the hard work and innovation. We look forward to speaking to you again soon, reporting on our progress and seeing many of you at ASH in just a couple of weeks. Please note our recent webcast and presentations could be found on our website at www.aptose.com.

Thank you again. Have a great day, everyone. Bye-bye.

Ladies and gentlemen, thank you for participating in today's conference. This concludes today's program. You may all disconnect. Everyone, have a great day.