Aptose Biosciences Inc (APTO) 2020 Q1 法說會逐字稿

Good afternoon. My name is Jimmy, and I will be your conference operator today. I would like to welcome everyone to the Aptose Biosciences conference call for the first quarter ended March 31, 2020. (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, Jimmy. Good afternoon and welcome to the Aptose Biosciences conference call to discuss financial and operational results for the first quarter ended March 31, 2020. I am Susan Pietropaolo, I'm communications representative for Aptose Biosciences. Joining me on the call today are Dr. William G. Rice, Chairman, President and CEO; Mr. Gregory Chow, Executive Vice President and Chief Financial Officer; Dr. Jotin Marango, Senior Vice President 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 achievements 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 first quarter ended March 31, 2020.

Although our prior conference call was not even 2 months ago, much has changed in our world since then. Before I update you on Aptose and what potential impact the COVID-19 could have on our business, if any, I'd like to express our heartfelt thanks to all health care workers, our compassion to those who are infected and our hope that all of you are safe and healthy. We are fortunate that Aptose is not experiencing the full force of headwinds that many other biotech companies are facing where several have halted or postponed clinical trials and others have experienced significant enrollment issues. This situation is unique to each company and to each molecule or treatment. Aptose, as you know, is developing CG-806 and APTO-253 to address unmet needs in hematologic cancers. Because patients with hematologic cancers tend to be quite ill, treatment of these patients is not elective. Consequently, our Phase I clinical trials are continuing to enroll despite recent events. An important consideration for clinical investigators and prospective patients is that to date, neither CG-806 nor APTO-253 has been myelosuppressive and importantly, during this pandemic, neither has induced immunosuppression. Many cancer therapies, both approved and under development, can cause immunosuppression, potentially elevating risk for patients in general, but even more so during this health care crisis.

Now let's first consider the potential impact of COVID-19 on CG-806 or just 806, as I'll call it. We have addressed and continue to address challenges that could cause disruption. We will call these crosswinds, if you will. But thus far, we have experienced no material delays in our ongoing B-cell malignancy trial. Our team proactively addressed these new challenges swiftly and appropriately, implementing safeguards and procedures to ensure the safety of our patients, clinicians and employees as the top priority and accommodate the potential challenges due to COVID 19. With 806, we are experiencing more crosswinds rather than headwinds, and that relates to the properties of 806. For example, 806 is orally administered. And we can ship bottles of capsules directly to the patients, thereby reducing the need for visits to clinical sites. We also had enabled remote monitoring, which again reduces patients' visits. Patients each receive an iPad, which allows them to upload data and observations in real time and also reduces the potential risk of exposure to COVID-19. This greatly reduces hospital or clinical site resources and the sites are appreciative. We also can reduce the number of site visits by not requiring all of the typical once-a-week blood draws, and by relying on local labs for additional safety monitoring. We are also in constant contact with our drug manufacturers to assess and proactively avoid potential supply chain disruptions. Thus far, we have not experienced any such disruptions, and our manufacturing of drug substance and drug product have actually accelerated.

One key adaptation is the fact that we now are placing greater focus on enrolling patients from specialty regional cancer centers rather than focusing on the large hospitals and academic institutions. This is because many of the large academic sites have emergency rooms and infectious disease units treating COVID-19 patients and face challenges to safely enroll patients in clinical trials. In contrast, most of the regional sites are not treating COVID-19 patients. They have both the bandwidth to enroll and the lower risk of infection to cancer patients coming into their clinics. Such an adaptation represents a rapid pivot that has served us well and based on our anticipated enrollment rate, we continue on track.

Regarding an update on 806 development, this is a distinct clinical asset compared to most other therapies that are commercialized or under development. Many of you have heard this before, but for those of you who haven't, 806 is much more than a typical FLT3 or BTK inhibitor as it not only inhibits wild-type and mutant forms of BTK and FLT3, it potently and simultaneously suppresses multiple oncogenic signaling pathways upon which cancer cells rely for survival and drug resistance. This singular compound targets the primary drivers of B-cell malignancies and acute myeloid leukemia, or AML, including BTK and FLT3, yet with the precision that avoids known targets that are often associated with toxicities. It is this unparalleled kinase-selectivity profile that sets 806 apart from other hematology drugs on the market or in development and what is contributing to much of the excitement surrounding the compound.

Now let's focus on our Phase I study of 806, the treatment of patients with B-cell cancers, including CLL and non-Hodgkin's lymphomas or just NHL. And today I'll speak about dose levels 1 through 4 that involve the administration of 150 milligrams, 300 milligrams, 450 milligrams and 600 milligrams BID, respectively. Since our last call, we successfully completed the third dose level with 450 milligrams. And on March 27, our Cohort Safety Review Committee unanimously supported the escalation to the fourth dose level with 600 milligrams. Also, we are pleased that the first patient dosed on this trial, who began at a dose level 1 receiving 150 milligrams, has completed 10 cycles at that dose level and now has been dose escalated to dose level 3 and receiving 450 milligrams per our protocol, and that patient is performing well. Following completion of dose level 3, we quickly commenced patient treatment on dose level 4 with 600 milligrams. To date, even at these higher doses, 806 continues to be well tolerated.

Now let's discuss a few details of the patients already enrolled in the study cohorts to date. The very first patient, as I said, is on study at 150 milligrams. This patient has CLL with an SLL phenotype. At that dose level, we achieved a steady state exposure level in the plasma of approximately 0.1 micromolar. This steady state represents the minimum level observed in the plasma over time. Importantly, we collected plasma from that patient and tested it in a plasma-inhibitory activity, or PIA, assay. With this PIA assay, we first collect the plasma from the patient, return it to our labs and place it on reporter cells. After a few hours, we use western blotting to determine if there is sufficient drug in the plasma to inhibit the phosphorylation of key biomarkers, including BTK, ERK, PDGFR-alpha and SYK, and that is spelled S-Y-K. We observed that once the patient achieved steady-state plasma levels of 806, the plasma inhibited all of these pharmacodynamic markers in the PIA assay, and that's with dose level 1. At the second dose level, we placed 1 CLL patient on study. With that CLL patient, we observed a rapid and dramatic lymphocytosis, indicating that a pharmacologically active exposure of 806 had been achieved as the cellular effect is classically ascribed as a response to the inhibition of BTK. Concurrently, we observed 100% inhibition of phosphorylation of BTK in the PBMCs from the patient's blood stream. Moreover, steady-state levels of 806 approached the 1 micromolar range. And the PIA assay revealed that levels of 806 in the plasma were capable of fully inhibiting the phosphorylation of BTK, SYK, ERK and PDGFR-alpha and the reporter cells.

After evaluating data from dose level 2 with 300 milligrams, we moved to dose level 3 with 450 milligrams, at which we enrolled and completed the 28-day cycle with 2 follicular lymphoma patients and 1 SLL patient. As a result, we completed that dose level and collected the necessary data quickly and safely. Although we will not discuss the data quantitatively as those data are now embargoed for presentation at the EHA Conference in June, we can say that the drug was well tolerated, the steady-state PK levels were well behaved and in the circa 1 micromolar range and that the levels of 806 in the plasma inhibited the expected PD markers in the PIA assays. After successful completion of the 28-day cycle with those 3 patients at the third dose level with 450 milligrams, we then escalated to dose level 4, on which the patients would receive 600 milligrams. At this time, we continued to dose in this cohort, and 806 continues to be well tolerated. While we are quite pleased with the findings thus far for dose levels 3 and 4, we once again will remind you that we are unable to share embargoed findings from these dose levels until the EHA Conference.

Provided we successfully complete 28 (sic) [28-day] dosing of 3 patients at that 600 milligram dose level, we plan to dose escalate with 3 patients at 750 milligrams and then 900 milligrams to ultimately determine the recommended Phase II dose for patients with B-cell malignancies. Depending on the clinical activity in specific subgroups in this dose escalation phase, we may enroll up to 100 patients across 4 expansion studies. Our Chief Medical Officer, Dr. Rafael Bejar, recently presented a summary of data from patients on the first 2 dose levels during the AACR virtual forum. Note that the press release and corresponding slides are available on our website. The conference format was amended from live to virtual, and we were unable to deliver the live oral presentation that we originally had been granted. So we utilized the 5-minute virtual opportunity to summarize data from the first 2 cohorts for medical professionals and to indicate that we continue to dose escalate successfully.

As I noted earlier, we look forward to presenting a more complete picture of the pharmacokinetic and pharmacodynamic profile of the higher dose levels at the European Hematology Association, also known as EHA, meeting in June, which will also be a virtual meeting and at ASH later in the year. As of today, we have 21 U.S. sites open for training and enrolling patients for the study with additional sites scheduled to come on board. For more specific information on the B-cell malignancy trial and the clinical sites enrolling patients, please visit clinicaltrials.gov.

Now let's move on to the application of 806 patients with AML. We've spoken before about our rationale for the AML study and the KOL support behind it. So I'll update you briefly on the status of this planned study. 806 is the only BTK inhibitor that also possesses strong FLT3 inhibitory activity, giving a broad therapeutic potential across the hematology spectrum, including both lymphoid and myeloid malignancies. Based on our extensive preclinical work, it has always been our intent to treat AML patients with 806 in addition to the B-cell malignancies. As you may recall, back in 2017, we had applied for and were granted orphan drug designation for 806 by the FDA for the treatment of patients with AML. At first glance, AML appears to be a competitive market with recently approved drugs and others on the horizon. However, none of these approved agents offers cures in and among themselves. While current targeted therapies may initially show some clinical benefit, eventually most responders relapse and become refractory to such treatments. We, along with a growing number of investigators and industry experts, continue to believe that 806 is clearly distinct from other agents on the market and in development and it has the potential to serve as a transformational agent for multiple hematologic cancers, including AML, CLL and others.

So far the big question has been, what dose level will we recommend for the starting dose with AML patients? To answer this, we must consider the data in their totality that we have gleaned from our clinical study in patients with B-cell malignancies. We must choose a dose that: first, it's safe and well-tolerated in humans; that has achieved plasma exposure levels that we believe can inhibit phospho-FLT3 and other key kinases operative in AML that can kill AML cells; and that correlates with potent efficacy and animal models of AML. As I mentioned earlier all dose levels thus far up to 600 milligrams have been safe and well tolerated. So that takes care of the safety consideration. Also, already, we have observed what I will call circa 1 micromolar steady-state plasma levels at the 300 milligram and 450 milligram dose levels. That plasma exposure level inhibits phospho-FLT3 and other relevant targets in the PIA assay, and that plasma exposure level is in the same steady-state exposure range that led to AML cures in mice and without observed toxicities.

Overall, based on safety, pharmacokinetic and pharmacodynamic data from patients in the ongoing Phase Ia/b study in patients with B-cell malignancies, we now have identified what we believe can serve as a therapeutic starting dose for the treatment of AML patients. We're in the final stages of preparing the new IND for submission to the FDA to seek allowance to initiate the clinical study of 806 in relapsed and refractory AML patients. I want to point out that this is not the same as submitting an IND for a new agent that has never been in humans. This new IND for 806 will consolidate all preclinical data as well as the safety, tolerability, PK/PD and pharmacologic activity findings gathered to date in patients with B-cell malignancies. Thus, this requires more time to prepare than the first-in-human IND. But we are heartened by the data, and we look forward to submission of the findings to the FDA, and we hope to move into AML patients as soon as possible.

Finally, our clinical team has identified and is working closely with top-tier institutional sites and regional cancer treatment sites to initiate the new AML trial. All of the features that I mentioned about 806 before that it is oral, that is well tolerated and that we can remotely monitor patients make us optimistic that the FDA will allow our IND so that we may begin dosing AML patients at what we believe may be a therapeutic dose.

To wrap up on 806 with some additional precautionary measures because of COVID-19 arena, we have already made significant progress in 2020. We look forward to reporting on our progress on the ongoing Phase Ia/b study in CLL and B-cell malignancies as well as the prospective AML trial throughout the remainder of this year.

And now on to APTO-253 or just 253, our second clinical candidate and our first-in-class MYC inhibitor currently in the Phase Ia/b trial for patients with AML and MDS. As many of you know, the MYC oncogene is a major driver of cancer cell proliferation. In fact, its expression is estimated to be elevated in up to 70% of human cancers, including AML and MDS as well as solid tumors. Per our Phase I clinical protocol, 253 is being administered once weekly over a 28-day cycle at ascending doses in patients with relapsed or refractory AML or high-risk MDS until a maximum tolerated dose is reached. The study is designed to then transition as appropriate to single-agent expansion cohorts in AML and MDS. We have completed the 28 dosing in the -- 28-day dosing in the first 3 cohorts, the last being 3 patients on a 66 mg per meter square dose as well as 1 patient thus far in the fourth dosing cohort of 100 mg per meter square. 253 continues to be well tolerated with no myelosuppression, and we continue to observe MYC inhibition at all dose levels to date.

In this Phase Ia/b trial, we continue to learn a great deal about the molecule. We are encouraged that we continue to observe MYC inhibition, a historically difficult target to modify clinically. The trial continues to be open for enrollment, and we continue to learn what to expect clinically about 253 and are making decisions on how best to move forward with the molecule. We may consider dosing more than once a week. We are also pursuing preclinical studies in other cancer indications, including solid tumors. In addition, we are working on an oral formulation of the drug. Because 253 is administered to patients intravenously, which requires the need for hospital or clinical site resources to assist and monitor patients during each infusion, the COVID-19 environment may have an impact on future enrollment of patients. Because of the activity and safety we've noted thus far with 253, it remains a viable candidate in our pipeline, and we look forward to keeping you apprised of its progress.

I will now turn the call over to our Executive Vice President and Chief Financial Officer, Mr. Greg Chow, who will review the results of the quarter. Greg?

Thank you, Bill, and good afternoon, everyone. We ended the quarter with approximately $90 million in cash and cash equivalents and investments compared to $97 million at December 31, 2019. During the quarter, we utilized approximately $8.1 million of cash in operating activities compared with $4.9 million for the same quarter last year. The increase is attributable to increased activities surrounding 253 and 806 and general and administrative purposes.

Moving on to the income statement. We had no revenues for the quarter. Research and development expenses were $5.9 million for the quarter compared to $3.3 million for the same quarter last year. This increase was primarily again due to CG-806 activities, particularly the clinical trial which did not begin until Q2 of last year. G&A expenses for the quarter were $5.9 million compared to $2.3 million for the same quarter. This variance is primarily due to an increase in stock-based compensation. Finally, our net loss for the quarter was $11.5 million or $0.15 per share.

Before I turn the call back to Dr. Rice, I want to mention that we entered into a new at-the-market, or ATM, agreement for $75 million with Piper Sandler and Canaccord Genuity as co-agents. This ATM replaces the previous one we had with them last year, which we terminated in conjunction with the $74 million public offering in December. Although we have sufficient cash to fund our planned operations and R&D into 2022, we don't plan to utilize the ATM anytime in the near future. Having an ATM does provide a strategic and maximum flexibility in extending that runway.

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

Thank you, Greg. I'll remind everyone on the line that we also have with us Dr. Jotin Marango, our Chief Business Officer; and Dr. Rafael Bejar, our Chief Medical Officer. As we open the call for questions, feel free to post questions to any of us. Operator, if you could please introduce the first question.

First question comes from Tyler Van Buren with Piper Sandler.

Congrats on all the progress in such a short period of time. I guess the first question is, of course, on 806 and B-cell malignancies. With respect to dose level 3, can you just clarify that you stated that it was 1 microliter plasma exposure levels? And specifically, how consistent was that among the 3 patients? And then in dose level 4, is there anything you could say with respect to initial plasma exposure level?

All right. Tyler, thanks for coming on. With regard to dose level 3, it was -- we had achieved the, I'll call it, circa 1 micromolar plasma exposure levels. Some -- you have a little bit of chatter around the patients over time, somewhere a little bit below 1 micromolar, somewhere a little bit above. But yes, we -- it was -- the pharmacokinetics were very well behaved. They were all in that 1 micromolar range, and we were thrilled to see that, and it was very consistent among the 3 patients. In terms of dose level 4, again, we have to be careful with what we say. In terms of the patients that are on there, as I mentioned, it's been very well tolerated. We're very happy with what we're seeing in the patients that are on the study. But the -- any pharmacodynamic and pharmacologic parameters at this point, we'll have to wait for EHA. And perhaps Dr. Bejar may want to add a bit to that.

No. I think you did a great job characterizing the behavior of those patients in dose level 3. I have nothing to add there.

And I guess -- since you can't state the levels, I guess could you just say if you expect the increase in the plasma exposure to be linear throughout the dose cohorts or potentially be more exponential as we get into higher doses.

I really can't say at this point. We do not have the PK or PD steady-state levels from dose level 4 at this time. So it's very difficult to make any judgment on that. Dose level 1 and dose level 2 were only 1 patient. And so the one where we have the greatest confidence is dose level 3 where we have 3 patients and they were all within the expected range. So we'll be able to provide a bit more data on that as we get into EHA. But again, we just don't have the PK/PD data yet from dose level 4.

Understood. And on AML, you identified an initial dose but didn't state which dose it would be, whether dose level 3 or 4 or even potentially 2, as you refer to, with the 300 milligrams and 450 milligrams. So I guess is it possible that maybe you drop down and use dose level 2 as a starting dose? And when could we learn of what the starting dose is that you guys use in AML? And do we have to wait for IND approval?

What I will say is we are recommending a dose that is derived from a cohort that has been completed. We are still in dosing our cohort 4. So that narrows it down to the other cohorts. What I also would say is based on the exposure levels and the pharmacodynamic and pharmacologic activity that we saw in those 2 dose levels, either dose level 2 or dose level 3 could represent starting doses. I would feel comfortable with either of those. And so we are making the recommendation to the FDA based on all the -- totality of the data. And that's all being written up, and we're trying to get it in within a matter of weeks and submit it to the FDA.

And our next question comes from John Newman with Canaccord.

And congrats on all the progress. So Bill, I just wondered if you could give us a sense as to type of data and the cohorts that we might see at EHA. I know that you obviously can't talk too much about it, but just generally speaking, I wondered if you could just maybe describe a bit more as to just the type of information we might see there.

All right. John, thanks for coming on. So we've been very consistent about this, and we want to make sure everyone understands our guidance. Our guidance is that we plan to present safety, PK and PD data, pharmacodynamic data from cohorts 1 through cohorts 4 at EHA. I believe the required submission date for abstracts to be uploaded is the 27th of the month of May. So we're trying to collect as much data as we can at this time, especially as far as we can through cohort 4, get those data cleaned, evaluate them and then get them integrated into the posters. If additional data come through after that May 27th date, between that and the time that we present at EHA, then we would likely have to include that -- such data there in a press release. But those are the types of data. We're telling people don't expect to see response data. We're just now getting into the higher dose levels. We're getting into the right patient types that we want to see and firstly get responses, but it does take time. We're seeing everything that we're hoping to see at this point, but it can take a couple of months before you start seeing responses in these chronic B-cell malignancy patients once you achieve these higher dose responses.

Perhaps Greg and Jotin, you might want to add -- okay, go ahead.

Sorry. And just one additional question which is, could you just remind us -- the way that the CG-806 study was designed, could you just remind us of the timing that the patients were on a specific dose before the next cohort enrolled. What I'm trying to get at here is just the amount of follow-up time between the dose escalation, I think, is relatively short. And I just wonder if you could explain that to people.

Yes. So for instance, cohort 3, we had to place 3 patients on that study. All of them had to complete the -- safely and successfully complete a full cycle, which is 28 days. Now if you could enroll all 3 patients on day 1, then it would only be effectively a month of dosing. And then it takes weeks to collect all the data from the clinical site, monitor the data, ensure the data are accurate, that's PK/PD safety data, present those data then to the CSRC, clinical safety review committee. It can be several weeks after you complete the dosing that is clinically sizable, then you have the data presented to the CSRC, then they have to vote to move up to the next dose level. So that gives you a sense. And if you could get all 3 patients on it day 1, that clearly would accelerate the time lines, but that's just not the way it happens. In these dose escalation trials, you may get 1 immediately, it may be a week or 2 before the next one, a week or 2 before the next one. We actually look at many patients, but they have to fit the entry criteria and not be excluded because of the other data. There are often patients that we see that we'd like to bring on, but they have to be excluded because of their disease status. So that just gives you a sense of what it takes.

And the other thing I'm sure you're trying to get is how many scans will we have on some of these patients. And we'll try to provide a little bit more guidance on that as we get closer toward EHA. Some of these patients that have been on for a long time, patient 1, as I said, completed 10 cohorts -- I mean, excuse me, 10 cycles at the first dose level, they've now moved up to dose level 3. And it's going to be squeaking to try to get a scan in there, we will try. But there's no guarantee we can get a scan in considering the COVID environment before EHA, we will try. The same is true from dose level 3 and dose level 4. Hopefully, we can squeak a couple in before that, but there's no guarantee, considering the COVID environment that we'll actually be able to get all those scans. I can vow to you we will do everything possible to do so and to then be able to represent those data at EHA.

Let me see if any of the other teammates want to add anything to that. Greg, Jotin, Rafael? All right.

No, it's good.

I guess, not.

And our next question comes from Gregory Renza with RBC Capital Markets.

Congratulations on the progress, and glad to hear that all is well with you and the team in this environment. Bill and team, just connected to the environment, and I appreciate the color on teeing up expectations coming into EHA into June. I'm just curious if you would have the ability to at least touch on or anticipate some of those expectations as the 806 trial progresses for the back half of the year and as you talk about getting to dose levels where we would perhaps see responses and looking at what has been a disciplined disclosure plan, how you think about this environment affecting or maybe even invigorating given what the color you've provided on and how you're sort of crosswinding and weathering the impact here about how disclosures could look at the back half of the year with respect to the trial.

All right, Greg, we'll do. Yes, first of all, it reminds me, so I can see all you guys sitting in New York City, we're all thinking about you, hope everybody is safe there. Regarding the expectations, as I just described for EHA, we've been consistent all along with what we expect to be able to present at EHA on that in June. It's coming up very soon. But as we get into the second half of the year, we expect to be able to present additional data, especially at ASH, at the end of the year. We hope by then that we would have had the correct types of patients on the higher doses long enough to see responses. Again, we're seeing everything that we hope for at this point except that we need to have the patients on longer to start seeing those responses. And again, we hope to be able to present true responses at the ASH later this year. And you've seen this with other covalent, non-covalent BTK inhibitors, it just takes time. Especially for these deeply relapsed refractory patients, it takes time for them to show responses. Even if you were to get lymphocytosis earlier on, it still takes time for the scans to show. And you only scan the patients every 2 cycles, so that's 2 months apart, and only then are you able to tell whether or not they truly have a response.

So that speaks to the B-cell malignancy trial for the AML. As I mentioned, we want to get that trial up and running as soon as possible. We've been able to collect all the data that we need from the ongoing B-cell malignancy trial. All of those data are being now cleaned and put into the new IND for the AML study, the prospective AML study. We want to get that, get it submitted to the FDA as soon as we can. Again, we have the 30-day turnaround because we have orphan drug designation. We hope that in today's environment that the FDA will be able to turn it around in 30 days. I commend the FDA, they have a lot on their plate, but they've actually done a tremendous job. We've been in contact with them on other activities, progress reports, annual reports, and so we've been -- protocol amendments. So we've been very pleased with the turnaround time, but there's just no guarantee going forward. We will get that study up and running as soon as possible. And you have to remember that AML patients, that's an acute disease. If you have truly a therapeutic dose that hits FLT3, we would expect to start seeing some effects within the first month of dosing. And hopefully, by the second month, you start to see some, what you can consider to be, responses in the bone marrow as well as the peripheral blood.

So that speaks to the second half of the year, what we'd be able to -- hope to be able to present in multiple patients with AML toward the end of the year at ASH. Keep your fingers crossed that we'll be able to get everything through the FDA. We're working with a variety of clinical sites, major institutions as well as, we said, the regional sites. We want to get those patients on. And again, as soon as we start dosing, we believe it will be a therapeutically active dose and there should be 3 patients at that dose level.

One other thing that I would add, I forgot to mention earlier, we do have a protocol amendment for our B-cell malignancy trial that will allow us to backfill patients into earlier dose levels, if we choose to do so. A good case where you might want to do that is when you've completed 1 dose level of the 3 patients, you're waiting to collect the data and get the CSRC to move up to the next dose level. So before you can move patients up to that next dose level, we might consider backfilling some on the prior levels. And also, we'll try to keep moving patients up to the highest dose level we can. So for instance, we moved up the patient 1 up to dose level 3. When we complete dose level 4, assuming we complete it and it's safe, we want to move up all patients on dose level 1 and dose level 3 to dose level 4. So those are the types of activities throughout the rest of the year. And thanks for being there for us, Greg. Appreciate it, all of you.

Thanks, Bill. And one more question, if I may. Just as far as COVID-19 potential impacts, I'm just curious if you could remind us, you had mentioned in the past, healthy volunteer trial maybe to characterize PK/PD more fully. I'm just curious if there's -- how that fits in if there's any impacts we should be thinking there? And what you gleaned from that, how important that is as an input to the overall program?

That's actually an interesting question. So we described these as crosswinds rather than headwinds. I think it was Greg Chow that came up with the analogy. And with the COVID-19 out there, what it means is there's so many additional challenges we have to address. So we're still able to fly the plane, it may be just been in a little few different changes in direction to get where we need to go, but we're still maintaining on our original time line and plan. And as opposed to a headwind, that really pushes you and holds you back. So at this point, we don't see the COVID-19 necessarily, at least, at this point, dramatically influencing any of our time lines. We're still on plan.

In terms of the healthy volunteer study, we were originally considering doing that study so that we could get additional PK data. But as we were putting that together, we realized we were getting plenty of the PK data, both from the B-cell malignancy trial as well as the upcoming AML trial. We should be able to get all the PK/PD data that we need. And so there is not the need to perform an additional healthy volunteer trial. It doesn't really add anything additionally to us at this time. We believe we can get all the data that we need from the current trials. Does that answer your questions adequately?

Yes. Sure, it does. Super helpful. Thanks Bill, and congrats again on the progress.

And our next question comes from Matt Biegler with Oppenheimer.

My congrats as well on the progress. Bill, for the EHA dataset, what are some of the other important biomarkers in addition to phospho-BTK and evidence of lymphocytosis that you think we should be paying attention to?

Well, the lymphocytosis is, you would only expect to see that in some CLL patients. So for instance, if you have a CLL patient that comes in with a reasonable load of malignant cells in the bloodstream, then when you start treating with an active BTK inhibitor, you could expect to see lymphocytosis. So that is something that we definitely are watching for, you should watch for that around the EHA time frame. As for the responses, again, to get a response, you have to look at the scans, and the timing of that is very close, we're going to do all we can, we hope to be able to see responses. But again, don't expect that at EHA. What else we would look for is in -- well, but let me back up. So we talked about lymphocytosis. You don't expect that to see those in the other types of patients, so follicular lymphoma patients, DLBCL patients, maybe even in Richter's. So you don't necessarily expect to see lymphocytosis in those or even the SLL patients because of the load in the peripheral blood, but we would hope to see it from the CLL patients. That's why it was important for us to get a CLL patient on very early, that was dose level 2. And then also in these current dose levels and going forward, it's important for us to get those types of patients going forward so that we can show you these types of activity.

We also want to be able, in particular, to collect PBMCs, again from CLL patients. Why? Because if you're trying to collect PBMCs from patients that have follicular lymphoma and some of these other lymphomas, you don't necessarily get a picture of what's going on in the malignant cells. But if you have CLL patients that have the reasonable load of CLL cells and you dose the patients, you very often can pick up enough of the signal you can see inhibition of phospho-BTK using an ELISA assay. And that is in the PBMCs, and we actually showed that in dose level 4 demonstrating it's pharmacologically active. We also have been able to demonstrate that we inhibit these other -- we talk about our drug inhibiting multiple key kinases in these key oncogenic pathways. So of course, we talk about SYK, S-Y-K, and BTK. And down -- then in downstream of BTK, you want to look at ERK. We've been able to show we inhibit those fully in the dose level so far. PDGFR-alpha is another one that we want to see. It's a cell surface receptor, and we want to make sure that we see that we're turning it off as well as some of the intracellular kinases in that PIA assay. And we've been able to show that, as I mentioned, in dose levels 1, 2 and 3.

One of the other things that you should look for, but we haven't spoken about it yet that much, is phospho-FLT3. In order for us to move into AML, we have to confidently say that we believe in this PIA assay that we can inhibit phospho-FLT3. So that gives you a sense we've seen that. And I'll just say we've seen inhibition of phospho-FLT3 in our PIA assay, that gives us confidence that we can inhibit. Not only is it phospho-FLT3, it's also wild-type phospho-FLT3 that we're able to turn off and that's even more difficult than the FLT3-ITD. So that gives you a sense of what we're having to look for, not only the safety, the PK levels, but the PK levels will show those data. And what we know is that the levels we are already achieving is above the levels that we're required to get complete cures in animal models of AML. So all of this in its totality gives us the confidence to move forward. And those are the types of data we'll be able to present. And thanks for coming on. You too are in New York and hope you too are safe. Thanks for joining.

Our next question comes from Jason McCarthy with Maxim Group.

This is actually Naureen, on for Jason. So I guess I have a sort of a devil's advocate type of question regarding your PIA assay in the CG-806 study in CLL. Is there any concern that the degree of BTK inhibition that you're seeing that it shows 100% inhibition, say, isn't exactly indicative of clinical activity in the body that it may not capture levels of BTK inhibition throughout the body? I guess I'm actually asking because if you look at one competing BTK drug, that's a bit more advanced, which showed complete inhibition at early doses and yet up to now, they haven't quite -- it hasn't quite translated into clinical activity. So I guess my question conversely is how confident are you in the clinical applicability of this assay?

Great question because you are preaching to the choir. I've addressed this on many occasions. Inhibition of phospho-BTK indicates that you are hitting -- your drug is pharmacologically active, and you are hitting a key component. But inhibition of BTK does not kill the CLL cells. It just changes the homing device. So BTK is responsible for maintaining those cells in the lymphoid tissues, the lymph nodes, the spleen, and it keeps them there. When you inhibit BTK, that changes the homing so that the cells now leave those lymphoid tissues, going into the peripheral blood where they have a tendency to die. And if you maintain that activity over long term, then the patients tend to respond. But the BTK inhibitor itself is not killing the cells directly. So other companies, you've seen this, at lower dose levels, they will see inhibition of phospho-BTK. And it may take 2 or 3 or even 4 dose levels above that until they start seeing responses. Particularly in these relapsed/refractory patients, these deep failure patients, why is that? Well, it's because BTK is not enough. Just inhibiting BTK in those patients is not enough. They have other pathways, other kinase pathways that are activated, additional mutations.

So one of our competitors, yes. I think at dose level 4, they had complete inhibition of BTK, but it was dose level 7 or so before they actually showed responses. They had to continue increasing their dose levels to begin hitting those other kinases before they started seeing responses. So your skepticism is very -- it's bounded in reality, and I agree with you. The difference here is we can already tell you, we're not just hitting BTK, we're also inhibiting those other kinases. So some of the other molecules were more potent against BTK and less potent against the other kinases, so they really had to dose escalate to inhibit the other ones. Ours has much more of a similar activity profile in the picomolar, low nanomolar range against these key kinases that we're inhibiting. I mentioned FLT3, BTK, PDGFR-alpha, ERK, SYK, all of these. We're inhibiting all of these at these dose levels. So that should give us more confidence as we show that we inhibit these multiple kinases that should translate into efficacy. It's more difficult to predict that in B-cell malignancies, but based on the science and the medical observations to date, we should be able to see responses over time. And we do know that in AML if you have an active inhibitor in FLT3 that is known, it is sufficient to get responses. It is not sufficient over time to maintain responses. You need to hit other kinases and also the different mutant forms of FLT3. But if you have an active FLT3 inhibitor, it is confirmed that you can get responses in these patients. Perhaps Dr. Bejar or Dr. Marango want to add to that.

Yes. Thank you, Bill, and thank you, Naureen, for the question. Bill captured very well the application and the coverage of these targets by PIA kinase activity. The one thing I was going to add is perhaps just highlight again some of the differences between the indications when you apply this assay in CLL versus AML, and specifically in AML, which is the direction now that we have ahead of us later this year, inhibition of FLT3 in this assay is a surrogate for clinical activity. And we have actually seen this in previous drug trials and PIA assays that have been published from midostaurin and gilteritinib back from the Phase I of gilteritinib, where all that seemed to be required in the same patient was just about an 85% or more inhibition of FLT3 activity, and those were the patients that then would respond. So as Dr. Rice said, it is sufficient for a response, that FLT3 inhibition. And that is in contrast then to BTK in CLL where BTK is necessary, but not entirely sufficient. You need to hit these other kinases, which coincidentally we do. And I know we also have one of the myeloid disease experts on the call, Dr. Bejar. So I'll also pass it to him if he has any extra thoughts.

I also think the other important point to make is that when we're doing these PIA assays, we're using a reporter cell line in the laboratory. The cell line doesn't mimic the tissue architecture and the supporting cells that are around it. So you're right, it is actually easier to inhibit those markers in these artificial cell line reporters than it is in the patient. But we also have the ability to take cells from the patient, whether they be normal peripheral blood mononuclear cells and look to see if the activity of these pathways is inhibited by the level of drug that's in their plasma. So we -- that's additional data that we're collecting on the study that hopefully will give us a better insight about what these drugs are actually doing mechanistically in patients. And I agree with Dr. Marango's point about AML that AML seems to be more straightforward in terms of its susceptibility or its addiction to that activated oncogene. And when you inhibit FLT3 activity, you see more rapid cell death, which is why we see more rapid responses in that patient population. But as Dr. Rice mentioned, that's not sufficient that there are mechanisms of escape that either are immunogenic or have to do with gene expression regulation that can quickly come into play. So you need to have a little broader activity against other potential salvage pathways in order to have a lasting result in that patient population.

That's really helpful from all of you. I just have one more follow-up question. You mentioned that there's 1 patient from dose level 1 that was -- that's reportedly been moved up to third dose level. I guess for my own sake, how would you count this patient now as part of only the first cohort or would you count this patient as part of both the first and third? And perhaps, can you talk about the rationale for moving him or her up to the third dose?

The answer is yes. They will be considered part of 1 and part of 3. So I'm going to ask Dr. Bejar to address why you would want to have move them up to the higher dose levels?

Sure. So getting back to the same point that Dr. Rice was making with your prior question. We think that it's important to hit not just BTK, but the other enzymes that are potentially compensatory for loss of BTK activity. And we know that we're going to have different sensitivities of these different enzymes to different levels of the drug. So a patient that's on a dose of 150 milligrams twice a day, for example, where we show inhibition of BTK, may need higher doses in order to achieve inhibition of other compensatory pathways. So if the drug is deemed safe at that higher dose level, I think we improve the likelihood that a patient might have a beneficial outcome if we're able to dose escalate them to that level. So the motivation to do that is to help increase their chances of having a good outcome. It does also give us an opportunity to learn more about PK and PD activity in that patient. And ultimately, this is something that the patient also is interested in doing in the hopes of achieving a better response.

So I think a good example of that is 1 of our competitor companies, they got purchased by another large company this past year, they moved up patients from the lower dose levels up to, I believe, 65 milligrams and the 75 milligram patients down to 65 milligram. So they selected a dose level at which they felt was efficacious and nontoxic. And at that point, I believe -- I maybe not fully correct, but I do believe that is the only dose level at which they demonstrated PRs, the responses in the B-cell malignancy patients. So again, even if they're on lower dose levels, doing well, hitting certain kinases, move them up to those higher dose levels because the burden is upon us to make sure that we're giving these patients the best chance to respond and to do so safely. And you need to give them as much drug as you can as long as it's safe and well tolerated. I'll end it there.

Our next question comes from Matthew Cross with JonesTrading.

Good to hear from you and appreciate you addressing some of the key questions out there about EHA and the CG-806 AML program with this call. Just a few questions from me. I guess, first of all, being -- I'm glad that you were very clear here about kind of the expectations for EHA and ASH. I just wanted to drill in a little bit about -- related to that comment you made in your introductory remarks about kind of an expectation of a reduction in blood draws as a result of the COVID situation. So I was curious to get kind of a little bit more insight into how that reduction in blood draws that may have already have started and going forward may impact the PK evaluations at EHA and ASH, given that you've stressed, particularly at EHA, PK/PD and safety will kind of be the most important things to look at, just how that may impact the data flow for that -- for those events.

All right. Thanks, Matt. This is Bill again. So what we wanted to make certain is that we're collecting all of the blood samples that really tell us the picture of what's going on. A good example is we've shown previously that by day 8, all the patients achieved steady state. So we would want to make certain that we get all the dose -- all the blood samples throughout day 1, the beginning of day 2 and then day 8, so that we understand the initial pharmacokinetics on day 1 as well as then hitting the steady state. We then have been collecting at day 8, 15, 22 and then at the end of the cycle, cycle 2, day 1, which is think of it as day 29. So that gives us all the steady state. But what we've decided is, well, we can miss maybe a couple of those in between. For instance, day 15, we can live without that, or even day 22 if we had to. So we're trying to minimize the burden on the patients, on them coming back into the site. We're trying to make it so that if possible, we can go out and have someone draw the blood remotely or they can go to other sites to have them drawn if they can't get into a clinical trial. But we're certain that we can have an understanding of the steady-state pharmacokinetics of these patients, which is what we really want to know. It's that minimum dose -- minimum exposure level that's critical to achieve and maintain to continue pressure on these kinases in the patients. So those are the main points. We're still collecting the samples for the PBMCs on day 1. We're going to actually try to collect those at -- also at later times, so we can get a better read on what's going on in the phospho-BTK and the PBMCs. So we may -- we believe we're going to be able to provide all the needed data to correlate PK/PD relationships. Did that adequately answer your question?

Yes. It did. Bill, that's great insight. And glad it sounds logical to me as far as the handling of it prior to these upcoming readouts. I guess I had kind of a 2-part question then as a follow-up on AML and that program beginning. I know we're early days and this is still a discussion with the FDA, but just trying to get a little bit of more color around your expectations of what you're putting forward to the agency. I guess, 2 parts, like I said here; one, wondering if you're going to intend to focus on patients or -- from an inclusion standpoint or maybe just from a stratification standpoint, enrolling patients based on FLT3 mutation, particular FLT3 mutations therein. I know you've shown evidence across the board within FLT3. But it is there -- is there an intent to focus on AML patients broadly in the dose escalation portion or to focus on these FLT3 mutants, whichever forms those may be. And then the second part was for AML, in particular, you've been very prudent, I think, to not begin testing in patients until you have a dose you would expect to be, to some degree, efficacious. But because of that, I'm sure you're also eager to begin testing in combination with venetoclax where I know you've shown preclinical synergies, maybe other agents. So just curious what you hope to kind of see from the CG-806 monotherapy and initial dose escalation prior to moving to into combination testing to really drive it at best outcomes as we're kind of beginning to speculate about what we may see from the initial dose escalation.

All right. Let's see if I can get through all of those.

Happy to repeat everything if I need to.

No, no, that's okay. So for the first part, you want to know what types of AML patients we want to bring on this trial. So in effect, we are mutation agnostic, so we're not going to differentiate among the patients based on the genetic background of the patients. We effectively want to have all-comers. Having said that, we'd love to be able to get some FLT3-ITD patients on early because those likely would be by far the most responsive very quickly. So that's something that we would hope to get on at the early dose levels or early cohorts among the first 3 patients we would try. But we're also eager to show that this drug should be active against those patients as well as patients that have wild-type FLT3, various other mutations in FLT3, patients who have p53 mutations, RAS mutations, all these types of patients. In particular, ones that are now resistant to other FLT3 inhibitors, we'd like to get those on. Now it may be that we try to push some of those to the higher dose levels where we think it maybe -- it'll be more effective, but we just have to see how effective it is at the entry dose level here.

But yes, to answer your question, we want to put value on the molecule as soon as we can, get it in what we believe are some of the most sensitive patients. But we are going to go after all these patient populations within that study. In terms of -- we've spoken that we want to test this drug in patients with AML, with MDS, single agent and in combination. In order to try to get this study going as quickly as we can, we are going to focus immediately on AML patients and single agent. Once we get that lined up, then we would likely come back and expand to MDS patients because we believe our drug can be active there. And then also to then begin also the combination studies. So what I'm going to do is I'm going to ask Dr. Bejar to address those and give some of his thoughts on that because he's also the expert on MDS.

Yes. Thanks, Bill. As usual, you've already answered the question and leave me to follow up. So he's exactly right, it's -- we do have an intent to look at the activity of CG-806 in myeloid malignancies beyond AML and MDS, in particular, given that the relationship of its biology to AML in general. And in the short term, we want to get the AML study up and running, do the dose escalation, understand how they started performing in a patient population and then go and expand to other indications, including MDS and consider combinations with drugs like venetoclax, for example, where we have strong preclinical data that we shared before. I think it certainly is a population that has need. And as far as tyrosine kinase inhibition in MDS goes, this would be a novel use. This is not something that is currently considered part of the standard of care, so really expand the treatment options for that patient population as well.

Perhaps you can talk about the titration of venetoclax into AML patients versus CLL patients and why we would like to go into AML patients first with a combo.

Right. Unlike in CLL where venetoclax has very potent single-agent activity and can become a little bit more difficult to combine with other active agents due to the risk of tumor lysis syndrome and things of that nature, you have to be a little more cautious in that patient population. In AML, venetoclax has very modest or marginal single-agent activity. It really has only shown significant benefit when combined with other agents like hypomethylating agents. And in that patient population, we don't see the same risk. It tends to be much safer and easier to dose in combination, especially if you're combining it with a drug that doesn't have overlapping toxicities. So as you know, venetoclax has the propensity to lower blood counts, particularly neutrophils. So far, we have not seen any evidence of that with CG-806 in our B-cell patient population. So we're hopeful that, that kind of combination would allow us to very safely and quickly understand how to put the 2 drugs together in AML patients.

Thank you. And then we could apply that to what we've learned in AML patients to the B-cell malignancies for the combination. I would also ask Dr. Marango, if he has any additional input in terms of the selection of patients for the AML trial.

Yes. Thank you, Bill, and thank you, Matt, for the question. As you heard about, at this point, 2 or about 3 months ago, we held a symposium around AML in New York City where we discussed a lot of the issues open in this relapsed/refractory population, a lot of the activity that we've seen preclinically from this drug and how we are thinking about this drug, but also how some of the experts in the field are thinking about it. And it's exactly discussions like that and feedback like that, which was in the open, that are also driving our positioning and our strategy. And so as Dr. Rice and Bejar mentioned, there are some sort of lower-hanging fruit populations out there, sort of unaddressed sort of clinical need within FLT3 patients that had received FLT3 inhibitors before. They are relapsing, so resistance, intolerance, patients with very problematic mutations, p53, RAS. So all of these should be able to be captured in this Phase I study and then pragmatically could then lead to separate investigations. As you know, the most traditional path for an agent like this is typically a staged approach, right, the targeted agents in hematology. So you start as monotherapy in relapsed/refractory disease, disease subsets that could be resistant or intolerant to other therapies, these present all fast development path to accelerated approval, let's call it stage 1. And then following closely, not quite in parallel, but potentially a few steps behind, you can have stage 2, which would be expansions towards combinations and then expansion towards the frontline. And in many hematology indications, including CLL and AML, these 2 actually go hand-in-hand, right, combination and then move towards the frontline. And this type of path would apply both to CLL, B-cell tumors as well as AML. And that is something that you're likely to see here.

Thank you.

Great. No. That's super helpful. And I appreciate you guys all chiming in there with some input. I think it's very cogent to describe the differences that you may see with combining with venetoclax in these 2 different indications and the path forward and then even kind of looking very much ahead maybe but to put to frontline usage. So really appreciate all the insight and stay safe guys.

Thank you. You too.

And our next question comes from Joe Pantginis with H.C. Wainwright.

This is Pasquale from the line of Joe. A few questions from me on the 252 trial. So basically, are you looking at specific MYC associated genes in the plasma of these patients?

I'm sorry, it was difficult to -- are we looking at specific genes in the patients? Is that what you're saying?

Are you looking at specific MYC associated genes in the plasma of these patients?

In the -- I'm not sure I fully understand your question. So we are collecting PBMCs from these patients. We're measuring the expression levels of MYC as well as a variety of other genes. So the gene expression by genome-based assays. Yes, we are doing that in these patients. We haven't reported out all the other genes that we're looking at, primarily MYC, because it doesn't -- MYC, but yes, we are looking at a number of genes in the PBMCs expression levels.

And these genes are associated with MYC pathway. Is that correct?

Some are, some are not. Yes. So some of these you expect might be altered if you inhibit MYC, but there are also other genes that we're interested in, yes.

Yes. So my second question is, is there a specific MYC signature associated with the defined AML genetic entity? So basically, in other words, what would be the optimal 253 AML target population?

Actually, I think MYC is known to be overexpressed in many different subgroups of AML patients. I think what we would look for, hopefully, is patients who are overexpressing MYC. So as we've looked in cell lines that are overexpressing MYC, both in AML as well as other heme malignancy and even in solid tumors, those that are over expressing MYC tend to be more sensitive to the drug. That's one of the reasons we've talked about probably expanding out into other malignancies. Right now with COVID, it's difficult to expand. We're trying to maintain the AML trough, but we may want to expand into Burkitt's lymphoma. That is one that is known to be driven by MYC. There are also other indications that are heavily MYC driven. So that's most likely where ultimately we might look to focus in patients to respond to this. I hope that answered your question.

Yes. So basically -- yes. Go ahead. Go ahead.

I don't know if Dr. Bejar wants to add anything to that AML and MDS.

I would just say that we're collecting samples to be able to answer those questions. We haven't predefined a mixed signature that we're looking for in this patient population in order to decide who might be responsive. But we definitely want to capture that in the patients that we do treat, so that if there is such a signal that we'll be able to understand it and characterize it.

Yes. That's great. So another -- well, we don't know what's going to happen when you just knock down MYC. So all the other drugs that are in the path that have been designed to inhibit MYC have been quite toxic. So it's not known yet, at least clinically, what will happen if you can selectively knock down MYC and safely to do so. So we're looking -- we're eager to find that out, okay?

Yes. That's very helpful. Is there a way to select for patients with MYC overexpression?

With what expression, I'm sorry?

With MYC overexpression. I was wondering if going forward, you're thinking at a way of selecting like biomarker-specific patients using MYC.

So the best one to look at there is literally MYC expression itself. We're able to do that very quickly in the PBMCs. So one of those, as I said earlier, was Burkitt's lymphoma. Now that we know this is a MYC inhibitor, we'd want to look at those types of patients and hopefully select those. With AML, let us collect some data in patients. Let us see if the MYC inhibition correlates with sensitivity and with clinical activity over time as we get into the higher dose levels. I'd like to think that would be -- that's true, but I do not yet have data to support that. So we'll have to collect the data.

Thank you. And I'm showing no further questions in the queue at this time. I'd like to turn the call back to Dr. Rice for closing remarks.

All right. Well, I want to thank everyone for joining us, in fact, this afternoon. And I particularly want to say thank you for all the insightful, thoughtful questions that came to us. Although we have much work ahead of us, we're gratified with our progress of our 2 clinical programs, both 253 and 806, and that we've been able to recruit new patients and escalate the dosing in our clinical trials even in these difficult times. I particularly want to thank our clinical team, our investigators, our patients for their help in this important work. We appreciate the support of our shareholders and the analysts that are on this call. We look forward to keeping you updated on our progress. We hope to see you at EHA, although it's going to be virtual. We want to thank everyone, and have a great evening and be safe. Thank you very much.

Thank you. Ladies and gentlemen, that concludes today's conference call. You may all disconnect, and have a wonderful day.