Aptose Biosciences Inc (APTO) 2021 Q2 法說會逐字稿

Good afternoon. My name is Mary and I will be your conference operator today. I would like to welcome everyone to Aptose Biosciences conference call for second quarter ended June 30, 2021. (Operator Instructions) Thank you. As a reminder, this conference call may be recorded.

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

Thank you, Mary. Good afternoon and welcome to the Aptose Biosciences conference call to discuss financial and operational results for the first quarter ended June 30, 2021. Joining me on today's call are Dr. William G. Rice, Chairman, President and CEO; Dr. Jotin Marango, Senior Vice President, Chief Financial Officer and Chief Business Officer; and Dr. Rafael Bejar, Senior Vice President, Chief Medical 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 10-K and 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 second quarter ended June 30, 2021. The quarter is highlighted by the continued progress of our clinical trials, especially with the luxeptinib, or lux, in patients with acute myeloid leukemia or AML, and in patients with B-cell cancers. We continue to move through dose escalations and our Chief Medical Officer, Dr. Rafael Bejar, will bring you through that in a moment.

Because we have observed clinical activity in our early cohorts, our clinical sites are highly engaged, and we're pleased with the brisk patient flow to both our B-cell cancer and AML cancer trials.

Before I turn it over to Dr. Bejar, I'd just like to emphasize the continued need for therapies in these hematologic cancers. While there are a number of active drugs on the market and in development, responses are often insufficiently durable, and most patients will relapse or develop resistance. Luxeptinib is our oral, highly potent non-covalent inhibitor of the BTK and FLT3 driver kinases, and is like no other commercialized or drug under development. I'll remind you that lux is more than just a typical FLT3 or BTK inhibitor as it not only inhibits wild-type and mutant forms of BTK and FLT3, it selectively targets clusters of related kinases and suppresses the mutations that occur in AML and CLL cells that render such cells resistant to other agents, and it has been found remarkably safe and well tolerated to date. Thus far, lux has been shown clinically to target the primary drivers of B-cell malignancies and AML, including BTK and FLT3, yet with the precision that avoids known targets, such as TEC, EGFR and ErbB2 that are often associated with toxicities. This selectivity is what sets lux apart from other hematology drugs on the market or in development, and what makes it compelling.

I'll also remind you, and this is a point that sometimes gets lost, that the patients in both of our trials are relapsed and refractory patients who already have been treated with and failed by the best available therapies. So the progress we're observing in our ongoing clinical trials in these very difficult-to-treat patient populations is encouraging and we are hopeful that lux will prove to be valuable in our momentum of therapies for diversity of hematologic cancers.

With that, I'll ask Dr. Rafael Bejar, our Chief Medical Officer, to provide an overview of our clinical activities. Raf?

Thank you, Bill. Aptose has 3 ongoing clinical trials: 2 studies with our kinase inhibitor luxeptinib or lux, one in patients with acute myeloid leukemia or AML, and the other in patients with B-cell cancers, and the third trial with our MYC repressor APTO-253 in patients with AML and MDS.

Let's start with our B-cell cancer study. This includes chronic lymphocytic leukemia or CLL and non-Hodgkin's lymphoma or NHL who have failed or are intolerant to 2 or more lines of established therapies, including drugs such as ibrutinib, rituximab and venetoclax or for whom no other treatment options are available. Indeed, patients in our trial have previously received from 2 to 12 regimens that have failed them, which also may include failure of other investigational agents.

As we mentioned in our last call, we've completed 4 dose levels in our Phase I trial of luxeptinib and lux has been well tolerated in patients treated at 150 milligrams, 300 milligrams, 450 milligrams and 650 milligrams twice daily over multiple cycles. Of evaluable patients at these dose levels, 2/3 of them experienced dose-related reductions of lesion size or IGM measurements compared to baseline, demonstrating anti-tumor activity.

Since our last update, we are well into the expanded 750 milligram dose cohort that is fully enrolled at this time. And as Dr. Rice mentioned, our recruitment has picked up nicely and we may expect to complete the 750 milligram dose level with the currently enrolled patients. Generally, as we've described before, we've observed encouraging on-target activity, including tumor reductions in both aggressive and indolent cancers.

In a corporate event held in conjunction with the European Hematology Association or EHA in early June, we reported some Phase I data highlighting our luxeptinib activity in B-cell malignancies. Intermediate dose levels as of June 7 had delivered all leading indicators of clinical activity, including target engagement with dose-dependent inhibition of phospho-BTK, treatment-related lymphocytosis in patients presenting with classic CLL, and tumor reductions across different B-cell malignancies including follicular lymphoma, chronic lymphocytic leukemia, small lymphocytic leukemia and Waldenstrom's macroglobulinemia, a type of non-Hodgkin lymphoma.

We've observed cases of clear reversal of aggressively growing disease upon intra-patient dose escalation and longer times on drug, suggesting that even aggressive disease may be successfully challenged with higher exposure levels and extended dosing duration of luxeptinib. SCG, PET/CT scans in one relapsed follicular lymphoma patient revealed lesion grows during treatment with luxeptinib at 450 milligrams BID for 7 cycles. Yet after dose escalation to 600 milligrams BID in cycle 8, lesion measurements demonstrated continuous reduction, and by cycle 15, day 1, the target lesion shrank by 43% when compared with peak tumor size. We continue to spotlight the case of this patient from the first half of this year as a reminder that moving to higher and longer exposures to luxeptinib, as we expect in the second half of this year, may successfully challenge relapse in refractory disease.

It's also important to point out that in the data reported during EHA, luxeptinib generally has been well tolerated in 22 relapsed/refractory B-cell cancer patients and dose escalations continue with no concerning drug-related safety trends to date. And so it is our intention, especially as we have begun to observe dose-dependent anti-tumor activity, to continue further dose escalation to the 900 milligram dose level for extended duration to tackle an increasingly treatment-refractory presenting population and to get as many patients as possible on these higher dose levels. For more specific information on the trial and the clinical sites that are enrolling patients, please visit clinicaltrials.gov.

Now let's turn to lux in AML. Acute myeloid leukemia or AML is a particularly difficult-to-treat hematologic cancer because lux potently suppresses FLT3 and additional oncogenic signaling pathways upon which AML cancers rely for survival and drug resistance. Treating AML patients has always been a priority for Aptose. As Bill mentioned, all of the patients in our AML trial have already been treated with and have been failed by the best currently available therapeutics which can include FLT3 inhibitors such as gilteritinib, midostaurin, crenolanib, quizartinib and sorafenib as well as venetoclax, other treatments and investigational drugs. So this is an extremely tough-to-treat patient population.

At our EHA corporate event in June, we reported promising anti-leukemic activity for luxeptinib. The first dose cohort receiving 450 milligrams BID delivered encouraging anti-leukemic activity in multiple patients, including a durable MRD-negative complete response in the FLT3-ITD AML patients who had relapsed after 2 allogeneic stem cell transplants, multiple lines of chemotherapy and prior FLT3 inhibitor therapy.

To date, we only have presented data on patients at the 450 milligram dose level. We also completed a 600 milligram dose level with some patients remaining on treatment at the 450 milligram and 600 milligram dose level, and we expect to complete the 750 milligram dose level with currently enrolled patients.

We are pleased that our sites are very engaged and that we have a vigorous flow of diverse patients. Also it's important to note that at these doses, we continue to find that lux is generally well tolerated with no toxicity signals or trends to date that we believe would prevent further dose escalation. This tolerability profile is critical because it is allowing us to reach the higher dose levels and will permit future use of luxeptinib in combination with other agents.

Finally I will mention that based on our clinical observations to date, data from our dose escalation studies are guiding the planning of our dose expansion studies to explore select disease genotypes under monotherapy and combination therapy programs. We expect to select an expansion dose and cohort strategy for AML around year-end. For more information on the AML trial and clinical sites that are recruiting patients, please visit clinicaltrials.gov.

Now let me quickly bring you up-to-date on the status of APTO-253, our second clinical candidate currently in Phase I a/b trials for AML and MDS. Some of these data are reported in the poster presented at EHA. To remind you, APTO-253 is a MYC repressor and the MYC oncogene is a major driver of cancer cell proliferation, including hematologic cancers. MYC is one of the most coveted drug targets in cancer. However, there are substantial challenges that have impeded direct MYC targeted drug development and has been considered undruggable in the past. As a direct inhibitor of MYC transcription, APTO-253 represents a novel approach for targeting this oncogenic pathway.

Our MYC inhibitor APTO-253 currently is being tested in a Phase I a/b trial in relapsed/refractory AML and MDS patients. Currently, we're dosing patients at our sixth dose level of 210 milligrams per meter squared. In the ongoing Phase I a/b study in patients with relapsed/refractory AML and high-risk MDS, APTO-253 has been well tolerated in the patients treated at 20 milligrams, 40 milligrams, 66 milligrams, 100 milligrams and 150 milligrams per meter squared over multiple cycles. Thus far, there's no evidence of drug-related adverse events, and importantly, no evidence of myelosuppression.

In the peripheral blood of patients, APTO-253 monomer rapidly transforms to and co-exists with the mechanistically active iron-253 conjugate. And significantly higher concentrations of the iron conjugate are sustained for days, suggesting that further dose escalations may provide more sustained pressure on the MYC target gain and alter the biology of the tumor cells.

Collectively, the findings from the ongoing Phase I a/b study support continued dose escalation of APTO-253. The study is currently enrolling patients with AML and MDS at the sixth dose level of 210 milligrams per meter squared and several subsequent dose escalations are anticipated. Of note, we are expanding the trial to include other MYC driven hematologic cancers. Based on APTO-253's mechanism of action, we also plan to treat patients with Burkitt lymphoma and other B-cell malignancies that are driven by MYC rearrangements.

We are pleased by the progress across our clinical programs and that the safety and tolerability of both candidates, luxeptinib and APTO-253, are allowing dose escalation in all 3 of our ongoing trials. As we treat more patients at higher doses, we are generally having pharmacologic and pharmakinetic data that we hope to provide further updates at the ASH meeting later this year.

I will now turn the call over to Dr. Joti Marango, our Chief Financial Officer and Chief Business Officer, who will review financial results for the second quarter. Joti?

Thank you, Raf, and good afternoon, everyone. Let's now turn to the quarterly results. We ended the second quarter with approximately $103 million in cash, cash equivalents and investments. During the quarter, we utilized approximately $8.8 million of cash in operating activities, which were attributable to activities surrounding our pipeline candidates as well as general and administrative purposes. Based on current operations, cash on hand at June 30 provides the company with sufficient resources to fund all planned operations, including research and development, into the first half of 2023.

Moving on to the income statement. We had no revenues for the quarter. Research and development expenses were $9.8 million for the quarter and attributable to clinical trial costs for our pipeline candidates, manufacturing of drug products for our clinical trials, including continuing development on improving formulations of our pipeline candidates and personnel costs for headcount supporting clinical trials, manufacturing activities and research studies.

G&A expenses for the quarter was -- were $3.7 million, and our net loss for the quarter was $13.5 million or $0.15 per share. More detailed information can be found in our filings on EDGAR and SEDAR.

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

Thank you, Joti. As we open the call for questions, please feel free to pose a question to any of us, Dr. Marango, Dr. Behar or myself. Operator, if you could please introduce the first question.

(Operator Instructions) Your first question comes from the line of Ted Tenthoff from Piper Sandler.

So excited to hear about the progress with lux in AML and CLL. And I'm wondering, just looking back at the pre-clinical data, was there anything that you saw that might start to point towards upper level or dose-limiting toxicities to look for? And quick follow-up question if I may too for 253. Excited to see that data, really like that mechanism. Do you have plans to ultimately pursue that beyond hematologic malignancies?

Let's start with the first question on luxeptinib and the pre-clinical data associated with any -- pointing to any potential DLTs. What I can say is that lux was extraordinarily well tolerated in all the pre-clinical studies, whether it be in mouse, rodent or dogs. In the GLP tox, what we did observe, and this is -- all of our studies up until that point were once-a-day dosing in all the animal models and we had great anti-tumor activity, but we had not seen any toxicity associated with the model -- with lux in those models. We therefore went into the GLP tox and decided to dose twice a day because we were trying to drive toxicity in the GLP tox studies in both the rodents and the dogs. Even with that, going up to the maximum feasible dose in both species, we saw no effects on the rodents. But at the dogs, after 20 days of twice a day dosing, we did see a very slight reduction in neutrophil count. It was not considered sufficient to be adverse, so it was not listed as an adverse event. But it gave us the signal that at the very highest doses, there may be a trend towards some of the neutrophil reductions, and that's what we are -- we'll continue to look for in the clinical trial. So in a moment, I'll ask Dr. Bejar if he wants to add to that.

But also you mentioned 253, the APTO-253, our MYC repressor. We agree with you, it is exciting to say -- to find a molecule that actually can inhibit MYC. We have seen MYC inhibition in patients. But at this point, we have not seen any overtoxicity. Beyond this, as we continue to dose escalate through the heme malignancies, we did start with AML and MDS. We are now also including the B-cell malignancies that are associated with MYC rearrangements, and Dr. Bejar may want to add to that in just a moment. But we also would like to look beyond the heme malignancies and possibly go towards some of the solid tumors.

A good example is that in non-human studies of pancreatic cancer, it's been shown that even transient reductions in MYC will highly sensitize those tumors to your classic chemotherapy. And that's a real need in the pancreatic cancers in humans. And so once we get to a dose in humans of which we believe we can show consistent, transit or even prolonged inhibition of MYC expression, we'd like to be able to move that into possibly the dose -- into the drug combination studies and some of those solid tumors, and look for the combined effect of drugs with chemotherapies, pancreatic cancers and possibly other solid tumors. So did that answer your questions? And perhaps I can ask Dr. Bejar to add. Ted?

Very thoroughly, yes. And I guess one quick follow-up. So if we're not looking for or we may not see dose-limiting tox, are there markers, including even maybe just a plateauing of effect, that we would look for, for dose selection or how do you think about that in the good position that you're in?

So I'll start on that, then I'll ask Dr. Bajar to expand on it. So as -- one of the things that we look for is are we achieving exposure levels in humans as we dose escalate to inhibit the target kinases. The most -- one way to do that, the accepted way is to take the plasma from the patients, bring it back to laboratory, place it on reporter cells and then ask after treating the cells with the drug, did you have enough drug exposure there in the plasma to inhibit the pathways. And we have some very nice inhibition of the phospho-FLT3, the SIC, PDGFR-alpha, CSF1R, ERK, AKT pathways as we continue to dose escalate further and so as we get to the 750 milligrams dose level. And we hope to get even greater exposure and greater hammering of some of those key oncogenic pathways as we dose escalate. So that's what we look for in terms of biomarkers. And so I'm going to ask Dr. Bejar also to expand on this a bit and to tell you how we're thinking about selecting that dose going forward for expansions.

Sure. Thanks, Bill. I think your point about the PIA assay as the way you just described is really important. But I think that's a necessary, but not sufficient, test to see if you're at the right dose. And if we don't see inhibition in that assay, then we certainly need to go higher. But we designed the AML study in particular to start with the dose level that already shows inhibition of phospho-FLT3 at the lowest dose level in that study. So we're seeing that already. I think -- like I said, I think it's not sufficient, it's necessary. We need to see other activity as well before we decide that we're at the right dose level. And fortunately, toxicity permitting rate, we'll continue to dose escalate and push into these higher dose levels to observe that. Now ultimately, given the variability of AML patients, some that may have sensitizing mutations, some that may have more resistant mutations, it may not be one dose level that applies to all comers and we'll have to continue to dose escalate to explore that. But we're in a good position, as you mentioned, where the toxicity profile is allowing us to do that.

Next question comes from Gregory Renza from RBC.

This is Yiting Wang for Greg. I was wondering if you could provide more color around the dose-dependent anti-tumor activity that was mentioned in the press release just now? And what is your latest thinking around dose escalation beyond the 900 mg dose level?

So again, I'll start on it, then I'll ask Dr. Bejar to provide a bit more color around it, as you asked for. So as we have -- especially in the B-cell malignancy patients, as we have continued to dose escalate at some of the lower dose levels, we are seeing some of the -- what we call the markers or the indicators of activity, inhibition of BTK, induction of on-target lymphocytosis and some levels of tumor inhibition. But as we went to higher and higher doses, we started seeing greater levels of tumor inhibition and in particular, in patients often when we would see -- we would start out at one dose and then we would expand or increase them to a higher dose level. So I'll ask Dr. Bejar to step in at that point and talk about what we've seen there.

Yes. I think your example, though, is exactly the one that we're referring to where you have a patient that starts at a lower dose level, does not see the kind of activity you would hope to see in that one dose, increasing the dose, then begins to see improvements. And as we've gone to higher dose levels, we've also seen higher exposures. So we're hopeful that that will translate into greater activity. We have seen the phenomenon that we described at the EHA meeting where some patients will initially come on study and we'll see initial tumor growth. And then in a couple of these examples, patients were allowed to dose escalate and actually have seen some reduction in that tumor growth in that peak, whether it be below baseline or not. It suggests that there is some activity as we get to those higher dose levels. I think it's a good motivator. We're continuing to dose escalate and see if we can get greater exposures in individuals and therefore have greater likelihood of response.

Yes. So that -- so let me play off that because she had also asked about possibly increasing beyond the 900 milligrams dose level. So we're at the 750 milligrams now. We have plans to go to the 900 milligrams dose level thereafter. We hope that we get increased exposure as we go to the higher dose levels and we also hope it continues to be tolerated well. If we see that the pharmacokinetics exposures continue to increase, it's tolerated well, we would seek to increase beyond the 900 milligrams dose level. If the PK is plateauing off or if we see some safety signals, that may take us in a different direction. Did that answer your question?

Yes, that did. And I just have a quick follow-up, if I may, on the PIA assay. I was wondering, based on the data so far, what's your expectation around the serum level that will be needed to inhibit FLT3 with resistant mutations and where does that translate in terms of dose levels?

What's interesting is Dr. Bejar just mentioned just a moment ago how diverse these patients are with AML. And we've actually presented some of the data with the PIA assay looking at FLT3. And it is clear, when you get to 0.5 micromolar, you're inhibiting essentially all of the activity of the FLT3, in particular when you have the FLT3-ITD. But in these patients, FLT3 is only part of what's driving these tumors. So you have the FLT3 as well as a number of other tumors. So it is essential for us to show that we're inhibiting the FLT3 activity. But we also want to get as high as we possibly can to hit as many pathways as possible. So we want to achieve the highest exposure levels that are tolerated in the humans to try to hit the pathways as much as you can. And trying to think what else. And then as we look to wild-type, typically, it takes a little bit more drug to inhibit the wild-type FLT3, but we are seeing inhibition of that too.

We have a PI assay. I think we're the only company that does this. We look at -- we have 2 different cell -- reporter cells: one is FLT3 wild-type, one in FLT3-ITD. And we've already shown that we also inhibit the wild-type FLT3 at sub micromolar levels, and we do so very effectively. But again, you need to inhibit the other receptors at the cell service, PDGFR-alpha, CSF1R track, as well as some of the internal kinases, the 6 -- S-Y-K, SYK, as well as maybe the ERKs and some of the Auroras and some of the others. So we need more drug or -- we always want to try to get more drug in as much as will be tolerated. Dr. Bejar, do you want to add to that?

Yes. I'll point out that it's tempting to look at a drug like lux and call it a FLT3 inhibitor. I mean that is an accurate description of what it does, but it does so many other things that I think are relevant to its activity that we have to take those into account. And you asked specifically about the inhibition of the resistance mutations that, for example, could arise in the setting of prior treatment with another agent. One of those resistance mutations are -- can be the mutations that occur in the tyrosine kinase domain. Certain FLT3 inhibitors that are out there don't target that very effectively. And we know from pre-clinical data that luxeptinib is very effective at targeting those kinds of mutations that could arise in setting a resistance. The other mutation that can arise is a gatekeeper mutation, F691L, and our pre-clinical data again suggests that we have low nanomolar activity against that mutation also. We haven't had the opportunity to explore that using the PIA assay specifically, but we believe that we are well above the concentrations that should be able to do that in that type of in-vitro assay.

Next question comes from the line of John Newman from Canaccord.

Just had a question on the type of patients that you're now enrolling for luxeptinib in the AML study, specifically at the 750 milligrams cohort. Just curious if you're looking to enrich for FLT3 here, for example, or if you're taking all patients. And also wondering if you're getting any patients with prior successful transplants? And if you can talk a little bit about how much follow-up you might have on this cohort as we reach the end of 2021?

All right. So the types of patients -- well, we have not disclosed the types of patients definitively that are on the 750 milligrams dose level. But I'll remind you, it is an all-comer in which we have both FLT3 wild-type and FLT3 mutated patients. It is clear that we have shown activity already against the FLT3-ITD mutant patients. We clearly want to get additional patients (inaudible) on the study to be able to prove that we can have activity against multiple FLT3-ITD patients. Because again every one of those represent a different patient, a different -- almost a different disease because they have such a wide diversity of other mutations and they've been treated with different drugs coming into that. At the same time, we absolutely want to have FLT3 wild-type patients. And when I say that, okay, it may be wild-type FLT3, it may be overexpressed wild-type FLT3, but again you have all these other mutations in there that gives rise to the disease. So we want to provide balance and we've talked about that all the way through. We clearly want to have the FLT3 mutated as well as wild-type patients.

In terms of patients that have received successful transplants, we highlight 1 patient in particular. It's the patient in which we reported the complete response, the MRD-negative complete response. That patient had had 2 successful transplant and then relapsed after several years after this successful transplant. So perhaps Dr. Bejar would like to add a bit more to that to talk about the data coming.

Yes. We do allow patients that have had prior transplants on study and then have subsequently relapsed, and several of our patients have met those criteria. We do also try to balance our cohorts to include wild-type and FLT3 mutant patients with sites selecting the patients that they believe are more likely to respond to help us with that. So we are not trying to limit enrollment in any way. We want to get a clean picture for both wild-type and FLT3 mutant patients as we make decisions about how they're going to expansion.

And then you asked about how much follow-up we'll have by year-end. You can gauge from when we have announced progress in the study, how many -- how much time it will be from that point. And as we mentioned, we believe that we'll be able to complete the 750 milligrams dose escalation quote for AML with the patients that we currently have enrolled.

Next question comes from the line of Alethia Young from Cantor Fitzgerald.

This is Emily on for Alethia. I'm curious if you have any updates on potential combination approaches for AML. Do you plan to maybe add combination cohorts in the dose expansion portion of the Phase I study? And if so, what agents would you potentially consider? And then I'm also curious as you said that you would have the dose expansion strategy by year-end, how does the 900 mg BID dose cohort fit into that? Do you think you could potentially enroll that by the end of the year? Or if not, what are your thoughts about that?

So again, we'll tag team. This one I'll start out. In terms of the combination approaches, we absolutely want to pursue combination approaches. We've shown this drug has activity as a single agent. We want to prove that in expansions with specific -- either genotypic or phenotypically defined patients. That is as a single agent monotherapy, we're pursuing that. But in parallel, we do plan to perform drug combination studies. We haven't disclosed exactly which ones that we're going to pursue yet. We will continue to collect data throughout the remainder of this year with the current study, the patient populations, and then see which types of combinations would be appropriate in particular patient populations. By that, I may say, it may be relapsed refractory, more first line. Depending on what we see in the patient types that we look at, we will choose the drug combinations appropriately.

And then in terms of the 900 milligrams, how does that fit into the process? Well, again, we're going into the 900 milligrams. If it is tolerated well for getting greater exposure, then we will continue to dose escalate. That will then impact the timing of the expansion cohorts. We may decide to move on with the 750 milligrams, 900 milligrams or possibly a higher dose level. We will follow the data, which is what we always do, and try to make rational decisions, and then provide you with additional information toward the year-end. Dr. Bejar, any additional?

Nothing additional to your comment about the 900 milligrams cohort. I think that that's accurate. With regard to combinations, we want to be able to combine with other agents because we think that the future of the treatment of AML will be in combination just as it has been for other hematologic malignancies where they have several therapeutic options available like multiple myeloma for example. And I think one of the keys to that is to have a drug that doesn't bring added toxicity to the table so that you're able to combine more cleanly than another agent, not necessarily exacerbate toxicity and be able to push the doses that are likely to be therapeutic for those.

Next question comes from the line of Matthew Cross from Alliance Global Partners.

I think you kind of laid out well the rationale for dosing higher in both of these trials now that we're getting up to 750 milligrams and potentially going on to 900 milligrams it sounds like. I was curious how much of a priority you feel it is also to either backfill or dose escalate to the dose levels where we've seen pretty substantial exposure to the 600 milligrams and 750 milligrams dosages, and whether that differs based on the indication we're talking about. And the kind of the second part, similarly as we're getting higher up into dosage here, I guess you were talking about in the pre-clinical setting moving from QD to BID. I was curious if we're moving into potentially 900 milligrams by, if not the end of this year, then probably early next, and you're giving I guess 750 milligrams, about 5 pills twice a day, 900 would be 6 twice a day. I was curious if you could speak to whether pill burden has been a problem at all for these patients or if there's a way to circumvent that? I believe there were some maybe transient commentary about formulation work. So I was just curious to get some insight there as you're dosing higher.

So let me start with talking about as we dose escalate the pill burden. So yes, you are correct. In the past, we have mentioned formulation development activities, but we really haven't said that much about it except that we continue to pursue it. At 750 milligrams, we do have 5 capsules twice a day. At 900 milligrams, it will be 6 capsules twice today. So we would look to reduce that pill burden and there are a couple of ways that we can do that. But one of the things that we are doing is, as with most drugs in Phase I and Phase II, efforts continue then to improve the formulation as you move towards the later-stage development as well as commercialization.

And we are often asked about the potential for new formulations for lux, given that our formulation does require administration of such high doses. We have been developing a new oral formulation that we believe may significantly improve absorption of lux. The new formulation has been successful in non-human models to date. It's very encouraging. We're actually preparing it for GMP manufacturing stability, we're testing in preparation for advancement to the clinic. What I would say is we're happy with what we're seeing. We're happy with what we've seen in animal models, multiple animal models to date. As I said, we are moving it forward towards GMP manufacturer. But I'll also remind you that the manufacturing stability, regulatory risks, still remain. There are no guarantees that this will actually work in humans, that we will show improved properties. But we feel like it's getting to the stage now that we're going to actually talk about it a bit. I appreciate you asking the question.

So it is promising. It may reduce the pill burden. It may reduce the amount -- the milligrams that we have to give each day to humans. And so we're keeping our fingers crossed. Everything looks good thus far, but we're not quite there yet and we hope to get it into humans as soon as we can. So good question. Okay. So what was the follow-up?

I can take the backfill question.

Okay. Please do.

You mentioned about backfilling and then further dose escalating patients. I think backfilling provides us with several advantages. One, just fairly straightforward advantage is that it can be frustrating to enroll patients to a Phase I study in dose escalation if there are a limited number of slots. Patients can't wait necessarily until the next dose cohort is open. So having a mechanism to put a patient on study in a backfill when the dose escalation cohort is closed is often welcomed by sites and continues to favor ongoing site engagement. But from our standpoint where we're trying to learn more about the safety and efficacy of the drug, it gives us the opportunity to explore more patients and to get at some of that diversity of AML by putting patients with different genotypes or phenotypes on study than we might otherwise be able to do during dose escalation. So it is an opportunity to learn more about the agent and then get more patients on. So we think it's a win-win. It's really positive for us understanding the drug. It's positive for patients who would like to get on study and it's positive for the sites who are sometimes frustrated with the pace of dose -- one dose -- Phase I dose escalation study.

We have time for one more question. Matt Biegler from Oppenheimer.

Want to ask you a multipart question on the evolving treatment, landscape in CLL, and maybe how that's affecting demographics in your Phase I trial. Specifically, are you noticing any uptick or are you getting any patients with prior non-covalent BTK exposure? And I wanted to hear your thoughts, a follow-up on emerging resistance mechanisms to the non-covalent class as a whole and whether you think lux might be able to show some effectiveness here?

All right. Again, I'll start and then we'll ask Dr. Bejar to come in. So in terms of the evolving landscape in CLL, you ask, in particular, if we're seeing patients that are getting treated with non-covalent BTK inhibitors. And the answer is, yes, we're seeing patients that have been treated with effectively every type of treatment out there, that -- and they failed those and then they come to us. So it is -- many of these are very heavily pre-treated patients, whether it's the covalent BTKs, non-covalent BTK inhibitors, venetoclax, rituximab, PI3K inhibitors, EI, EIO, and Dr. Bejar can talk a little bit about more of that. But let me just mention very quickly. In terms of resistance that we're beginning to see in a lot of these patients, yes, of course, you will get some patients coming forward that have mutations in BTK, but those are actually quite rare. Most of them that we're seeing emerge now are in the RAF and the PPT3 pathways. So we think that is an area that's keen for us, because once you start getting the RAF, the PPD3 mutations, most other drugs you don't see activity, or you lose sufficient activity that you just cannot achieve those exposure levels in the blood stream. We've actually done studies. Dr. Brian Druker did studies with various cells that have RAF and PPD3 mutations, and they maintain sensitivity for lux. So we're hoping that as patients fail the other types of molecules out there and the vast array of other molecules, that it's actually driving the [malignant] (added by company after the call) cells towards sensitivity to our drug. But again, these are very experienced patients. Dr. Bejar, would you please add?

Yes. That's correct. I think that we are seeing patients that have had that kind of prior exposure in some of our sites. I don't think we entirely understand what the patterns are going to be for them, but obviously, the patterns of resistance we've seen for ibrutinib aren't just the mutations of the enzyme itself, BTK. They also include other pathways like PLC, Gamma 2 and so on. So, unclear to me if non-covalent inhibitors will have superior activity in those cases where the BTK molecule itself isn't mutated. But they themselves may induce other mutations of BTK, and we'll have to explore with regard to the activity of our drug. I think it's too early to know yet.

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

Well, I want to thank everyone for joining us this afternoon. It's a very exciting stage here with Aptose development. None of this would be possible without the dedication of our employees, investigators, and more importantly, the patients who are helping advance our important work. We're also very appreciative of our shareholders and the research analysts, and we thank you for your continued support. We look forward to keeping you all apprised of our progress in the second half of the year. And I want to thank you, and have a wonderful evening.

Thank you, ladies and gentlemen. That concludes today's conference. You may all disconnect and have a wonderful day.