Moleculin Biotech, Inc. (MBRX): Pioneering a New Era in Acute Myeloid Leukemia Treatment

Published on March 12, 2025 | Ticker: MBRX

Moleculin Biotech, Inc. is a late-stage pharmaceutical company with a broad portfolio of drug candidates targeting hard-to-treat tumors and viruses. The company's lead asset, Annamycin, has shown promising results in the treatment of acute myeloid leukemia (AML), a highly aggressive and often fatal blood cancer.

Business Overview

Moleculin was organized as a Delaware corporation in July 2015, with the aim of advancing novel cancer drug candidates licensed from the University of Texas MD Anderson Cancer Center. These candidates include Annamycin, WP1066, and WP1122. The company's focus is on developing innovative therapies for unmet medical needs, with a particular emphasis on AML and other hard-to-treat cancers.

In 2019, Moleculin sublicensed its technologies to Animal Life Sciences, Inc. to enable research and commercialization for non-human use. The company faced challenges in 2020 when it received a subpoena from the SEC requesting information and documents related to the development of its COVID-19 drug candidate. Moleculin expensed approximately $1.4 million in related legal fees and expenses over the next few years as it responded to periodic further requests from the SEC staff.

Despite these challenges, Moleculin made significant progress with its drug candidates. In 2021, the company's WP1066 and WP1220 successfully completed Phase 1 clinical trials, demonstrating efficacy in their varied indications. The following year, Moleculin received Orphan Drug Designation from the FDA for Annamycin for the treatment of AML.

In 2023, Moleculin's lead program Annamycin completed a Phase 2 trial. The company held an End-of-Phase 1/2 meeting with the FDA, which provided guidance for moving Annamycin into a Phase 3 pivotal trial. Additionally, Moleculin announced new U.S. patents for Annamycin, extending its global exclusivity.

Since its inception, Moleculin has made significant progress in advancing its drug candidates through clinical trials. The company's lead molecule, Annamycin, is a next-generation anthracycline designed to be different from currently approved anthracyclines, which are limited in utility due to cardiotoxicity risks and susceptibility to multidrug resistance mechanisms. Annamycin has demonstrated efficacy in two of its Phase 1b/2 trials in subjects with AML and advanced soft tissue sarcoma.

In addition to Annamycin, Moleculin's portfolio includes the WP1066 portfolio, which includes compounds designed to inhibit p-STAT3 and stimulate a natural immune response to tumors, as well as the WP1122 portfolio, which contains compounds designed to exploit the potential uses of inhibitors of glycolysis, such as 2-deoxy-D-glucose (2-DG).

Financial Overview

Moleculin is a clinical-stage biopharmaceutical company, and as such, it has not yet generated any revenues from product sales. The company's financial statements reflect the typical expenses associated with drug development, including research and development, general and administrative, and depreciation and amortization.

Financials

For the fiscal year 2023, Moleculin reported:

Revenue: $0
Net Income: -$29.8 million
Operating Cash Flow: -$24.1 million
Free Cash Flow: -$24.2 million

For the third quarter of 2024, the company reported:

Revenue: $0
Net Income: -$10.6 million
Operating Cash Flow: Not available
Free Cash Flow: Not available

As of September 30, 2024, Moleculin reported a net loss of $19.88 million for the nine-month period, compared to a net loss of $19.50 million for the same period in the prior year. Research and development expenses increased slightly to $13.27 million, up from $12.86 million in the prior year period, reflecting ongoing costs for clinical trials and sponsored research. General and administrative expenses decreased to $6.63 million from $7.76 million, driven by lower regulatory and legal fees.

Liquidity

The company's cash and cash equivalents as of September 30, 2024, stood at $9.40 million, which is expected to fund its planned operations into the first quarter of 2025. Moleculin will need to raise significant additional funding, estimated at approximately $15 million, to support the MIRACLE trial and its operations into the third quarter of 2025.

Additional financial metrics include:

Debt/Equity Ratio: 0.0216
Current Ratio: 2.08
Quick Ratio: 2.08

It's important to note that Moleculin's financial performance is heavily influenced by its research and development activities, which are critical to the success of its drug candidates. The company's ability to raise additional capital to support its operations and clinical trials will be a key factor in its future growth and success.

Annamycin: A Potential Game-Changer in AML Treatment

Moleculin's lead drug candidate, Annamycin, has shown promising results in the treatment of AML, a highly aggressive and often fatal blood cancer. Annamycin is a next-generation anthracycline that has been designed to be different from currently approved anthracyclines, which are limited in utility due to cardiotoxicity risks and susceptibility to multidrug resistance mechanisms.

In the company's most recent Phase 1b/2 clinical trial (MB-106), Annamycin in combination with cytarabine (also known as Ara-C and referred to as AnnAraC) demonstrated a complete remission (CR) rate of 50% and a complete remission composite (CRc) rate of 60% in second-line AML subjects. This performance substantially exceeds the historical CR rate of around 17-18% for the standard of care, high-dose Ara-C (HiDAC), in this patient population.

Moreover, the median durability of remission for the CRc responses in the MB-106 trial has now exceeded 8 months and is still climbing. The company believes these results could potentially be a game-changer in the AML treatment landscape, as Annamycin may be able to fill a significant unmet need for more than half of AML patients.

Pivotal Phase 3 MIRACLE Trial: Accelerating Towards Approval

Building on the promising data from the MB-106 trial, Moleculin is now advancing Annamycin into a pivotal Phase 3 clinical trial, known as the MIRACLE (Moleculin Rr AML AnnAraC Clinical Evaluation) trial. This adaptive, global trial is designed to evaluate the efficacy and safety of Annamycin in combination with Ara-C (AnnAraC) in AML patients who are refractory to or relapsed after induction therapy (R/R AML).

The MIRACLE trial has an adaptive design, with the first 90 subjects randomized to receive HiDAC combined with either placebo, 190 mg/m2 of Annamycin, or 230 mg/m2 of Annamycin. This initial part of the trial is intended to establish the optimal dose of Annamycin for the second part of the study. The company expects to have the interim data from the first 75-90 subjects in mid-2026, which could potentially accelerate the approval timeline.

If the initial 90 patient data shows Annamycin is substantially outperforming HiDAC (e.g., 280% better), the independent data monitoring committee may determine it is unethical to continue the control arm, allowing them to convert Part B to a smaller single-arm study. This could potentially shorten the approval timeline by over a year and virtually eliminate any remaining efficacy-related approval risk.

Moleculin is actively engaged in the contracting and recruitment of sites for the MIRACLE trial, with a goal of initiating the first subject enrollment in the first quarter of 2025. The company aims to submit a rolling NDA for accelerated approval in the second half of 2028 based on the final primary efficacy data.

Expanding Annamycin's Potential Beyond AML

While Moleculin's primary focus is on the development of Annamycin for the treatment of AML, the company believes that the drug's potential goes beyond this indication. Annamycin has also shown promising results in the treatment of soft tissue sarcoma lung metastases, and the company is exploring its use in other types of cancer as well.

Additionally, Moleculin's other drug candidates, such as the WP1066 portfolio and the WP1122 portfolio, are also being developed for the treatment of a variety of hard-to-treat tumors and viruses. The WP1066 portfolio includes several compounds designed to inhibit certain transcription factors associated with tumor activity and stimulate the immune system's natural response to tumors. WP1066 and WP1220 have both successfully completed Phase 1 clinical trials in topical formulations for central nervous system tumors and skin cancers, respectively. In September 2024, the company announced the initiation of a Phase 2 investigator-initiated trial evaluating WP1066 in combination with radiation therapy for the treatment of glioblastoma.

The WP1122 portfolio contains compounds, including WP1122, WP1096, and WP1097, designed to exploit the potential uses of inhibitors of glycolysis. These compounds may provide an opportunity to cut off the energy supply of tumors by taking advantage of their high degree of dependence on glucose compared to healthy cells, as well as viruses that also depend on glycolysis and glycosylation. WP1122 has completed a Phase 1 clinical study in normal volunteers, establishing a recommended Phase 2 dose.

The company's diversified pipeline and its commitment to innovation in the field of oncology and virology make it an intriguing investment opportunity for investors interested in the biopharmaceutical sector.

Risks and Challenges

Like any biopharmaceutical company, Moleculin faces a number of risks and challenges that investors should be aware of. These include the inherent risks associated with drug development, such as the potential for clinical trial failures, regulatory hurdles, and competition from other therapies. The company's reliance on external funding and its limited revenue streams also pose financial risks that must be carefully considered.

Moreover, Moleculin's recent SEC investigation, which has resulted in increased legal and regulatory expenses, is an ongoing challenge that the company must navigate. In March 2022, the company received a subpoena from the SEC requesting information and documents, including materials related to certain individuals and entities, and materials related to the development of and statements regarding the company's COVID-19 drug candidate. The company has received, and expects to continue to receive, periodic further requests from the SEC staff with respect to this matter. The outcome of this investigation and its potential impact on the company's operations and reputation remain uncertain.

Conclusion

Moleculin Biotech, Inc. is a promising biopharmaceutical company that is at the forefront of developing innovative therapies for hard-to-treat cancers and viruses. The company's lead drug candidate, Annamycin, has shown impressive results in the treatment of AML, a highly aggressive and often fatal blood cancer. With the pivotal Phase 3 MIRACLE trial underway and the potential for early unblinding of data, Moleculin is poised to potentially disrupt the AML treatment landscape and deliver significant value to its shareholders.

While the company faces the inherent risks associated with drug development, its diversified pipeline, strong scientific foundation, and commitment to innovation make it an intriguing investment opportunity for investors willing to take on the associated risks. As Moleculin continues to advance its drug candidates through the clinical trial process, it will be crucial for investors to closely monitor the company's progress and the evolving AML treatment landscape.