Michael Wood - LifeSci Advisors William Rice - Chairman, President and CEO Gregory Chow - SVP and CFO.

Jotin Marango - ROTH Capital Partners John Newman - Canaccord Joe Pantginis - H.C. Wainwright.

Good afternoon. My name is Sabrina and I will be your conference operator today. I would like to welcome everyone to the Aptose Biosciences Conference Call for the Year-End and Fourth Quarter Ending December 31, 2017. [Operator Instructions] Thank you. As a reminder, this conference call maybe recorded. I would now like to introduce Mr.

Michael Wood of LifeSci Advisors. Please go ahead..

Thank you, Sabrina, and good afternoon everyone, and welcome to the Aptose Biosciences conference call to discuss financial and operational results for the year ending fourth quarter December 31, 2017. I am Michael Wood of LifeSci Advisors, the Investor Relations firm for Aptose. Joining me on the call today are Dr.

William Rice, Chairman, President and CEO of the Company, and Greg Chow, Senior VP and Chief Financial Officer. Before we proceed today, I would like to remind everyone that certain statements made during this call will include forward-looking statements within the meaning of the 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 those 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 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. So I will now turn the call over to Dr. Rice, Chairman, President and CEO of Aptose. Dr.

Rice, please go ahead..

Thank you, Michael. I'd like to welcome everyone to our call for the quarter and year ended December 31, 2017. It's been a very productive year for Aptose and we have much to update you on today, especially the status of CG'806 and APTO-253, our two products being developed for hematologic malignancies.

In addition we will discuss other initiatives, upcoming milestones and timelines. Following these updates, our CFO Mr. Greg Chow will review our quarterly financials and then we'll open the call for your question.

Let's begin with CG’806 or 806 as we call it, an oral first-in class pan-FLT3/pan-BTK multi-kinase inhibitor being developed for patients with AML and certain B-cell malignancies. And of course everyone wants to know how close we are in getting CG’806 into the clinic.

To begin, during 2017 we made a great deal of progress in addressing CMC formulation and safety matters needed for the first in human trials.

In our prior quarterly calls, we reported that we solved the synthetic route for the scale of manufacturer of API or drug substance and that we had manufactured a batch of highly purified and well characterized API sufficient to complete the rodent PK studies and the dose range finding studies.

I’m pleased to report that we have completed the dose range finding studies with 806 in rodents and dogs. And successfully dosed up to 1000 milligrams per kilogram per day which is generally accepted as the maximum feasible dose. Yet, we still did not reach exposure levels that cause toxicities even at this very high dose.

These data put to rest appears that from by some that 806 might cause some unexpected toxicity in dogs which are typically highly sensitive to toxicities. This was welcome news. However, as we began to perform longer-term dosing, we do expect to observe toxicities and we assume those will likely be related to bone marrow suppression.

We assume the toxicities will be related to bone marrow suppression because the targets that are hit by 806. Yet we still appear to have a robust therapeutic window in animals and we hope that trend continues into humans.

We continue to make good progress in manufacturing and now have prepared a 2.6 kilogram batch for the upcoming IND enabling GLP safety and pharmacokinetic studies in rodents and dogs. Those IND enabling studies are scheduled to begin during the second quarter of this year.

Plus we already have initiated manufacturer of the GMP batch that will be used for clinical trials. Further as I mentioned on our last call, we have advanced the scientific understanding of 806 such that we now have added confidence to submit an IND to cover trials in both AML and B-cell malignancies.

And we remain on track to submit an IND for both trials during the latter portion of this year and move into the clinic immediately thereafter. As a reminder, during the fourth quarter of 2017, we announced that the U.S. Food and Drug Administration or FDA granted orphan drug designation to CG’806 in AML.

The FDA's office of orphan drug products assigns orphan drug designation to support the development of compelling medicines for underserved patient population and this provides us with accelerator reviews for regulatory matters.

Having given you the anticipated timelines for moving 806 into the clinic now let me spend a few minutes to revisit why we’re so excited about this asset. AML is a devastating cancer of the blood and bone marrow and approximately one-third of patients have a mutation are referred to as ITD in the FLT3 receptor tyrosine kinase.

And the FLT3 ITD mutation is the key driver of the disease in these patients.

The recently approved FLT3 inhibitor midostaurin and other kinase inhibitors in development for AML have provided patient benefit but these agents remain embattled with drug resistance because mutations beyond the ITD that occur in the FLT3 tyrosine kinase domain and gatekeeper region.

Our compound 806 is the only known true pan-FLT3 inhibitor for AML meaning that it retains picomolar to lower nanomolar potency against all forms of FLT3 including the most clinically relevant mutant forms in AML that are associated with very poor prognosis and which rendered the disease resistant to other FLT3 inhibitors.

In preclinical studies, 806 has been shown to exert profound antileukemic effect against human and mirroring leukemia cell lines harboring the gamut of FLT3 mutations. Yet it is essential for us to impress upon you that 806 is more than a mere FLT3 inhibitor.

The potent inhibit clusters of related kinases that drive malignancies derived from the bone marrow compartment. Why is this important? Because even if all forms of FLT3 are inhibited that still is insufficient to control AML.

Other pathways including CSF1R, BTK, AKT, ERK, Aurora kinases, H3S10 and others exert prominence and rescue the malignant cells. However, 806 suppresses the FLT3 and these additional rescue pathways sufficiently that it can exert a broad range of killing across the diversity of AML cells and yet remain well-tolerated by animals.

Similarly, 806 suppresses wall type and mutant forms of BTK and other rescue pathways operative in B-cell cancer cells and thus the ability to kill a diverse set of B-cell malignancy cells.

Some of those exciting preclinical data were the subject of three poster presentations at ASH in December of 2017 presented in conjunction with our prestigious research partners the MD Anderson Cancer Center under Dr. Michael Andreeff and the Oregon Health & Science University, Knight Cancer Center under Dr. Brian Druker.

Data presented by MD Anderson’s researchers elucidated the unique ability of 806 to kill a broad range of AML cells by suppressing multiple pathways simultaneously to overcome resistance caused by bone marrow stromal cells and to act synergistically with other agents.

Specifically, 806 elucidates broad-spectrum killing of AML cells through its ability to suppress the FLT3 pathway, as well as the CSF1R, BTK, Aurora kinase, AKT, and ERK signaling pathways that are differentially operative in different AML cells.

Notably, 806 maintain the ability to kill AML cells in the presence of FLT3 ligand and bone marrow stromal cells and 806 demonstrated dose-dependent in vivo antitumor activity in a circulating model of AML. A separate poster presentation by MD Anderson further eliminated the antileukemic mechanism of 806.

In that study 806 demonstrated hypothesis or program cell death in AML patient’s samples by multiple mechanisms depending on the genetic background and pathway involvement in those cells and the ability to overcome resistance that is seen with other FLT3 inhibitors. 806 also sensitized AML cells to standard chemotherapy agents.

Together these data supported development of 806 for a diverse set of AML patients with FLT3 ITD, FLT3 ITD plus additional tyrosine kinase domain or gatekeeper mutations, as well as those with over expressed wall type FLT3. Separately data presented at ASH from the OHSU Knight Cancer Center under Dr.

Brian Druker evaluated the sensitivity of malignant cells derived from the bone marrow of hundreds of AML patients to 806 and a host of competitor FLT3 inhibitors Remarkably, 806 demonstrated broad potency against all subgroups of AML patient cells and was superior to midostaurin, quizartinib and other FLT3 inhibitors in development.

These data have been presented in the form of a heat map in our corporate presentations and the data illustrate the striking differentiation of 806 from other FLT3 inhibitors and underscore that 806 is more than just a FLT3 inhibitor.

As our mechanistic understanding of 806 grows, we are beginning to construct a framework of how single molecule can inhibit specific clusters of kinases and heterogeneous group of AML cells without observed toxicity in normal cells.

In addition to the ability of 806 to target FLT3 and act on a diverse set of AML cells, I want to reiterate here that 806 is also a noncovalent BTK inhibitor which kills various B-cell malignancy cell lines in vitro with approximately a 1000 fold greater potency than ibrutinib the current standard of care.

Based on studies performed by the team at Ohio State University, approximately half of all patients discontinued treatment with ibrutinib after 3.4 years with approximately 40% to 45% proving to be intolerant or refractory and approximately 5% to 10% being resistant to the treatment.

Yet ibrutinib has an estimated worldwide sales of multi billion dollars annually. So with the continued unmet medical need among the patients discontinuing ibrutinib comes significant market opportunity.

In addition to its greater potency than ibrutinib and directly killing B-cell cancer cells, 806 as a noncovalent BTK inhibitor retains full potency against the mutant form of BTK in which the Cysteine 481 residue is mutated to CERI and is resistant to go back around BTK inhibitors.

Thereby potently allowing 806 to be useful in the treatment of patients resistant to ibrutinib and other covalent BTK inhibitors. Plus 806 is well tolerated and maybe used to treat patients that cannot tolerate ibrutinib.

And finally 806 inhibits multiple rescue kinases and pathways that prove useful in treating the B-cell malignancy patients that are refractory to ibrutinib.

Together these properties may allow 806 to provide an important treatment option to many patients that discontinue ibrutinib or other covalent inhibitors due to resistance and tolerance or refractory disease. Also at ASH researchers from the OHSU Knight Cancer Center presented compelling findings on 806.

Through the Beat AML Initiative they evaluated the activity of 806 on various hematologic malignancy cell lines and from a diverse set of primary bone marrow specimens from patients with AML, CLL and other hematologic malignancies.

In this study 806 exhibited broad and potent activity against primary patient samples over a diverse range of hematologic malignancies subtypes including AML, CML, myelodysplastic syndrome, myeloproliferative neoplasms and acute lymphocytic leukemia.

For further detail on the ASH findings please see the presentations and corresponding press releases on our website. In summary, 806 has continued to reveal compelling preclinical results that are superior to other FLT3 or BTK inhibitors.

We and our research collaborators will be presenting new data at the upcoming AACR Annual Meeting in April and we look forward to sharing that with you. There is growing excitement surrounding the development of 806 and all of us are more than eager to see it in our clinical studies. So now let’s turn to APTO-253.

Aptose is small molecule inhibitor of c-Myc oncogene expression. And first let's discuss the path and timelines on which we plan to return 253 to clinical dosing.

During 2017 we successfully completed the formal root cause studies to determine the reason for the failed stability test of our GMP drug product manufactured at the end of 2016 and we demonstrated that correction of one particular step in the manufacturing process allowed us to manufacturer a soluble and stable drug products supply of 253.

Since our last call I’m happy to see we now have completed manufacture of a new GMP supply of the drug product sufficient for return to the clinic. We currently are performing stability, sterility and marked infusion studies, as well as animal bridging studies in order to submit our findings to the FDA to seek release of the clinical hold.

Our next step providing the ongoing studies with the drug product were successful is to submit our response to the FDA which we expect to happen in the second quarter because 253 has orphan designation and AML, we expect the FDA will respond quickly and we hope the CMC related clinical hold will be lifted so that we may resume dosing of patients soon.

As a reminder with 253 we do have an open Phase 1b trial in patients with AML or MDS and we expect a dozen or more sites to participate for both of those dose escalation and expansion phases of the trial.

A couple of these sites have secured early RFB approvals as soon as we get our clinical hold there will initiate screening patients immediately and hit the ground running. So we're hopeful of restarting the 253 clinical trials soon, and the physicians are eager to test the c-Myc inhibitor for the treatment of AML patients.

However, I have not and will not rush these studies and take the risk of an unforced error. We will be deliberate and careful in our efforts to return 253 to the clinic.

We and the clinical investigators are eager to have a non-myelosuppressive Myc inhibitor in the clinic for AML and we hope to return it to patient dosing as soon as possible and we will keep you posted. Because I have mentioned Myc several times, a bit of background here is required.

The c-Myc or just Myc proto-oncogene regulates cell growth proliferation and apotheosis in normal cells. However Myc often becomes over expressed in bone marrow derived cells leaving to hematologic cancers including AML and it has been notoriously difficult to inhibit the oncogenic actions of the Myc protein.

However 253 represents an entirely new approach for small molecule Myc inhibitor as it inhibits expression of the Myc gene. Because Myc is a key target in many malignancies, our research suggests that 253 may have a broader anticancer application across hematologic malignancies and certain solid tumor indications.

Some of that research was published in two abstracts at ASH and has been accepted for presentation at AACR and also has been accepted for publication in two peer review drugs. The goal of that research was to further clarify the mechanism of action of 253.

Indeed we have identified the target of 253 and learned how it inhibits expression of the Myc gene. It does not directly interact with the Myc protein but rather acts on the promoter region of the gene to inhibit the expression. These details will be provided in the upcoming publications.

Simultaneously, these publications will report the identification of synthetic lethal interactions that revealed a new indication for 253. In particular a solid tumor indication that is molecularly defined.

We learned that 253 exhibits synthetic lethality comparable to the FDA approved targeted therapy olaparib the path inhibitor in cells deficient with BRCA1 and/or BRCA2 function.

The ability of 253 to exploit homologous recombination deficiency is of particular interest because unlike olaparib and other drugs for which loss of DNA repair functions results in hypersensitivity, APTO-253 does not produce myelosuppression even at the maximum tolerated dose.

This is all interesting stuff and opens the door to other potential indications for 253, but as we've shown AML cells exhibit a particular sensitivity to 253 and that is our first focus for the molecule. I like to now talk about the third program in our pipeline represented by APL-581.

Earlier this month we announced that we had entered into a global license deal with OHM oncology, a subsidiary of Laxai Avanti Life Sciences of India to develop APL-581 or related molecules. The 581 molecule is one part of Aptose's dual action BET bromodomain and kinase inhibitor program.

The deal provides almost global rights for the development, manufacture and commercialization of 581, as well as related molecules from Aptose's BET bromodomain protein and kinase inhibitor program. Aptose will retain reacquisition rights to certain molecules while OHM will have the rights to develop and sublicense all other molecules.

The agreement provides Aptose with nominal upfront payment but we’re eligible to receive up to $125 million in milestone payments and significant royalties if approved. As you may recall, APL-581 evolve from earlier work with LALS to develop lead molecules for dual action BET kinase inhibitor program.

Inhibitors of BET bromodomain protein represent an interesting class of epigenetic drugs being pursued by several pharmaceutical companies because of their ability to regulate the expression of the Myc oncogene.

However, simple BET bromodomain inhibitors tend to be unacceptably toxic so we sort to engineer an additional kinase inhibitory activity and to the molecule. That effort led to APL-581 as a priority molecule.

We are encouraged by this transaction as it finds a home for a non-core asset and has the potential to bring new agents to patients and meaningful non-diluted funding for Aptose in the future. Moreover it provides an additional means to target Myc driven oncogenic processes in cancer cells.

We have come far in one year and look towards more important milestones during 2018. More importantly we’ve advanced our pipeline such that this year we plan to return 253 to the ongoing Phase 1b trial in AML and NDS patients and we plan to submit an IND for 806 to support trials in AML and B-cell malignancies.

And we're looking forward to reporting back to you on both of those programs. I now will turn the call over to our Chief Financial Officer, Greg Chow who will review results of the quarter..

Thank you, Bill. Before I move on to the financials, please note that as of December 31, 2017 we changed our reporting currency from Canadian dollars to U.S. dollars. We ended December 31, 2017 with US$11.4 million or CAD$13.6 million and cash and cash equivalents in investments compared to US$7.9 million or CAD$10.7 million at December 31, 2016.

During the quarter, we utilized approximately 2.9 million of cash in our operating activities compared with 2.5 million during the three months ended December 31, 2016.

Through the use of our ATM facility with Cowen, which expired in December 2017 and our committed equity facility with Aspire Capital we have extended our current cash runway and cash on hand to the middle of 2019. Moving on to the income statement, we had no revenues for the quarter.

Research and development expenses were $2.1 million for the quarter compared to $1.9 million for the three months ended December 31, 2016. Total R&D cost increased due to increased 806 program cost and were offset by lower spend on 253 program cost and the cancellation of the LALS and Moffitt collaboration.

General and administrative expense for the quarter were $1.3 million compared to $1.1 million for the three months ended December 31, 2016. The increase over the comparable quarter is mainly due to higher salary expenses due to increased headcount to prepare to potential return of 253 back to the clinic.

Finally our net loss for the quarter was $3.3 million or $0.12 per share compared to a loss of $3 million or $0.23 per share in the three months ended December 31, 2016. I will now turn the call back over to Dr. Rice.

Bill?.

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

[Operator Instructions] And our first question will come from the line of Jotin Marango with ROTH Capital Partners. Your line is now open..

I have one for each of your program. So first with 253, in your ASH presentation couple of months ago you reinforced the idea that this is a Myc inhibitor which has been the indirect target of a lot of bromodomain inhibitors of which there are a few including the one that you just out-licensed 581.

So what do you see as a potential advantages of 253 in Myc control versus all the bromodomain inhibitors out there?.

Let’s answer that one first before we go to the 806 program and hi Joti, it’s good to hear from you. For the bromodomain inhibitors, I think most of us are aware that the bromodomain proteins are on every active gene throughout your genome.

And the reason that we are able to see an early inhibition of c-Myc is that you get super enhancers that form along the mid gene and certain hemalignancies and when you hit with a bromodomain inhibitor than those super enhancers fall apart first and then you get inhibition of c-Myc.

However, then bromodomain inhibitors begin hitting all the other bromodomain proteins on all of the active genes and that's why you tend to see a high level of toxicity with the general bromodomain inhibitors.

With our other program the 581, we were aware of the toxicities with just a bromodomain inhibitor that’s why we also wanted to introduce the ability of the molecule also inhibit kinase such that you can likely reduce the effects on the bromodomain and hit a kinase and have dual action inhibitor.

I saw where another program like that was just published in PNAS just very recently in the past month. But getting back to 253, so we are not inhibiting the bromodomain proteins. We’re not directly c-Myc either. So we’re acting on a three-dimensional DNA structure and the promoter region of the Myc gene.

We stabilize that and it turns off the c-Myc gene. So we clearly see that we’re inhibiting the expression of the gene and depletion of the c-Myc protein and the cells and we’re able to do this under circumstances that do not give us myelosuppression in animals or in humans.

So we see that as the main advantage is that we are able to turn off C-Myc by hitting the gene not the bromodomains and not the C-Myc proteins and cells and to do so with a molecule that is very well tolerated. So how about the 806 question now..

So on a 806 you mentioned that you see no toxs in dogs up to doses of 1 gram or is it 1 gram per kilogram do I have that right?.

Yes..

So and then that's drags me as high which is great. Then the question is so, how do you run a tight Phase 1 in oncology with a molecule and you expect to be effective but not at all toxic on single dose.

I guess do you expect the FDA to potential cut you slack in starting high and then moving fast through bigger set in dosing, how do you go with the risk of being stuck in a conservative, but then really long 3 plus 3 titration?.

Couple of ways to answer that. First of all thus far we’ve seen no toxicity and it was 1 gram per kilo per day. We even dosed twice daily to try to push the exposures and to try to get toxicities. So, and we even used mice rather than rats because mice have higher exposures, plasma exposures than rat and we still saw no tox.

At the very highest dose levels of 1 gram per kilo per day in dogs, we are putting so much drug down the throat so the dogs that effectively - they did have emesis at highest dose level and a couple of med and intermediate dose. However, there were no toxic effects it was just a tolerance of the amount of the drug you’re putting down the throat.

Now those dose range finding studies only last for five days, so very soon we’re beginning the IND enabling tox studies. Those are 28-day dosing of animals again twice a day mice and dogs and over the longer-term dosing, we do fully expect to see some toxicities emerging in animals.

And in fact, we’re hopeful that we do and again we suspect it's going to be bone marrow suppression, but those are the data. We’re able to achieve levels that clearly inhibit the tumor growth and can eradicate - eliminate tumors in animals without the toxicities.

We’re hopeful that we see toxicity in the IND enabling studies and with that than we will be able to affect a starting dose, but it also may turn out that the dose levels in the animals that are tolerated are so high and we actually be starting yet more of a therapeutic dose in humans soon thereafter may not be at the first level, but I think the lower dose levels may be therapeutic..

And the next question will come from the line of John Newman with Canaccord. Your line is now open..

Bill the first question that I had was just wondered if you could remind us the differences that you've seen between 806 in ibrutinib just in terms of the way each one of those compounds effect cells that are cancer.

I believe you previously said that 806 can actually kill the B-cells and I’m wondering what happens with ibrutinib, is the ibrutinib kill the B-cells do you see something else just curious there?.

So I glossed over that during the presentation day because I was going on other activities. Interesting question so - we’ve looked at I think nine different B-cell malignancy cell lines. We’ve treated each of those with increasing concentrations of ibrutinib or with 806.

When you treat with ibrutinib, if you look at just inhibition of BTK you’ll see that you completely inhibit the BTK below 10 nanomolar in all those cells. However, you don't kill the cells until you get up to 10 micromolar. So it's a general toxicity to the cells. So it shows that just by inhibiting BTK in those cells does not directly kill the cells.

However, if you treat with 806 what we see is nanomolar killing of the cells, so on average we’re about 1500 that’s 1,500 times more potent in directly killing the cells than is ibrutinib. That’s because we do inhibit BTK, as well as the C41S mutant form BTK. But on top of that we’re affecting other pathways I mentioned those.

So if you look at all those different cell lines of B-cell malignancies they all use different pathways at different levels some of those that are important BTK, AKT, CSF1R, FLT3, BTK the H3S10. So our drug is able to affect multiple pathways there which leads to directly killing the cells.

It also leads to a phenomenon known as [indiscernible] which then transitions over to apoptotic cell death. So that what occurs with our molecule or as that does not occur with ibrutinib. If you look at ibrutinib in vivo, much of its effects are through the bone marrow.

It has the effects on the stromal cells in the bone marrow you inhibit BTK, BLK and ITK. They didn't signal the malignant cells in the bone marrow and you get killing through that mechanism. But there is not as much direct killing of the cells by ibrutinib.

We believe our drug will have still have those same effects in the bone marrow but we can also directly kill the cells. So we're hopeful that our drug can be the best-in-class noncovalent BTK inhibitor out there.

Does that sufficiently answer your question?.

Yes thank you. I wondered if I could ask one more if you - you mentioned that you will eventually be moving into the clinic with 806 in both B-cell malignancies as well as AML. And I’m wondering in terms of the B-cell malignancies will you start out targeting a broad group of B-cell malignancies or will you start looking specifically at CLL..

When you said eventually into the clinic that’s what it feels like for us. But we expect that to be the IND this year and head into the clinic. Now if you look at other companies that are developing BTK inhibitors, they may focus on CLL or they may focus on just the mutant patients with the mutant form of BTK.

We’re going to go after all the patients that are discontinuing ibrutinib whether they be CLL, MCL, DLBCL whatever the patients are, anyone that is discontinued ibrutinib or any other covalent inhibitor.

Why? Again because our drug doesn't care if there is cysteine or serine in the active site, so we retain activity against the mutant form and we believe we can go after those patients.

Secondly, because we hit these other pathways, we believe we can go after all the patients that are refractory to ibrutinib so if you look quite a number of the patients who are discontinuing the ibrutinib, we're actually refractory to the drug which means their tumor never responded.

We're hopeful that those will respond to our drug because of the different pathways that we hit and the fact that we directly kill the cells. And then finally when it comes to tolerance, many of the patients that discontinue ibrutinib a percentage of those are due to intolerance the side effects.

Many of those are driven by the fact that ibrutinib and some of those other covalent BTK inhibitors they’ll inhibit TEC which is a kinase TEC or they’ll inhibit EGFR or they’ll inhibit ErbB2 and ErbB4 and those are driving the key toxicity associated with ibrutinib 806 does not inhibit any of those kinases.

So again we believe we’re going to be able to treat patients that are resistant, refractory or intolerant. So we’re not going to fractionate out the patients coming in. We would want to take all B-cell malignancy patients regardless of the indication, regardless if they’re resistant or not and to put those into the dose escalating Phase 1.

We think that will allow us to dose escalate the patients faster and give us a better chance to see activity in humans. And thank you John for the questions..

And the next question will come from the line of Joe Pantginis with H.C. Wainwright. Your line is now open..

So for 806 I just want to verify for the IND enabling studies can you add some color with regards to the animal models that you talked about already.

So it sounds like you don't plan on going past the 1 gram dose in dogs and you're just looking to increase the duration to 28 days is that correct?.

So again we’re going into mice because you get high exposures we’re doing twice daily dosing to try to push the toxicities in the animals models. So we already know that we can go in mice up to 1000 mgs per kg per day and there are no observed toxicities that was for five days.

So yes we’re going to go to that high level and that’s again considered the maximum feasible dose it’s an enormous amount of drug, but we plan to go to those doses and then have two dose levels below that in the mice. In the dogs, I don't believe the plan now is not to take it up to 1000 mgs per kg per day because they will not tolerate that level.

You will see emesis, so we're going to be proposing to the FDA that we use three lower dose levels but still dose levels that we believe the animals - the dogs will tolerate. They will achieve high blood levels and then hopefully we will see some toxicity over 28 days.

But again, twice a day dosing there so that we can push the exposures both the C-Myc's and the AUCs that achieve per day.

Does that answer your question?.

It certainly does, thank you. And then just switching to 253, can you remind us when hopefully 253 gets back to the clinic, what doses you can restart at.

If I recall I think you don't necessarily have to go back to the initial doses is that true?.

We will make a proposal to the FDA and the FDA will determine those dose levels but what I would expect right now and our team, we would actually prefer to go back to those original dose levels and here's why.

The new formulation actually gives us 3X exposure levels over the prior formulations whom we've tested this three different times in animal models. So we're getting increased exposure level, so we believe that if we start at the original dose which is 20 mgs per meter squared that’s effectively giving us exposure of what was 60.

We go to 66 and 100 meters mgs per meter squared and you start getting 3X dose levels there, than we think we’re going to get significant exposure levels and most likely start at the original dosing levels. So that would be our plan. The other thing is we’re going to be dosing once weekly rather than twice-weekly which we did in the past.

We believe this is - the patients will like this better. We believe the exposure levels will be more significant and so that gives you a sense of how we plan on doing this. But to answer to you directly, we expect to go back to the original dose level but with much higher exposure levels in the patients because of the formulation..

And with the studies on the new formulation, you mentioned several different things that you're doing right now the stability, sterility, marked infusion.

Have you moved yet beyond the step where the problem occurred in patients? I think it was obviously the marked infusion part that you might be able to see that or is that still pending?.

So all those studies are ongoing but what I can tell you the new drug product that we've been producing has been performing beautifully in the marked infusion study thus far. Some of the studies that we have to perform - these are all the standard studies that you perform for any drug that goes into the clinic.

Some of those have been completed already and they've worked out beautifully. We've used to have a couple of that have to be completed, finish up the reports and then get that to the FDA as soon as possible.

So thus far we've had no showstoppers and we're very happy with the drug product so far but again there's no guarantee that everything is going to be perfect.

There's no guarantee that FDA will allow to go back in but based on what we see now, we feel really good about the drug product that we've made and it really looks superior to our earlier drug products and the fact that we hope we can get back into the clinic soon..

[Operator Instructions] And the next question will come from the line of Mark Breidenbach with Oppenheimer. Your line is now open..

It's Matt on for Mark. Sounds like you've got an existing year ahead. Had a couple of questions on 806, firstly around your clinical strategy for the asset.

Are you planning separate Phase 1 trials or do you think you can enroll both AML and B-cell patients under one protocol? And secondly, it's actually kind of tag one to John's prior question but do you include - do you plan to include follicular lymphoma in that bucket of B-cell malignancy that you plan to enroll especially considering the synergies that you showed preclinically with BCL-2 inhibitors?.

So, first of all for the IND and the clinical trials, we do plan to submit a single IND under - that covers hematologic malignancies that will cover AMLs, as well as the BML cell malignancies in any of the other hemalignancies that we deem viable leader. However, we're going to perform two separate Phase 1 dose escalating studies.

One in AML and one in B-Cell malignancies. The one in AML we plan to have all-comers AML patients because of the broad activity that we have there. And that will allow us to dose escalate faster with the patients because we’re not fragmenting the patient's taking one-third of that are FLT3 ITD.

And so we hope to be able to dose escalate on that quickly and again all-comers in the AML. The B-Cell malignancy trial, again I mentioned that we’re going to take all patients who have discontinued the ibrutinib or other covalent inhibitors and hopefully that will allow us to dose escalate faster.

The reason we separate these into two separate trials is that the inclusion and exclusion criteria are different for these patients. Very often AML patients are coming to these - that loves to factor refractory patients, these are really sick patients and you have different [indiscernible].

So, a single IND two separate Phase 1b dose escalating trials. In terms of follicular lymphoma, again that's compelling argument but we're trying to collect data on that one now. So we understand the rationale and especially some of the combination data that we've seen.

We believe that maybe a pathway for us but we're trying to collect additional data to justify that at this time enough..

Thank you. And I’m showing no further questions. I would now like to turn the call back over to Dr. Rice for any closing remarks..

Well, everyone thank you for joining us today. At Aptose we are advancing highly differentiated molecules that may feel great unmet medical needs and hematologic malignancies. I am so pleased what we've accomplished during this past year and where we are today.

There are many employees and collaborators to thank for their diligence and their efforts in helping us get to this juncture. We also thank our stockholders for your substantial support.

Having said this, we still have much to accomplish and we look forward to 2018 with steady news flow and look forward to communicating with you on the progress with both 806 and for 253. I also want to mention that we presented at four investor conferences earlier this month and those recent webcast are accessible on our website at aptose.com.

Operator, would you please conclude the conference call and I want to thank everyone again and have a wonderful evening..

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