Good afternoon. My name is Carmen, 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 ended December 31, 2020. At this time, all participants are in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer session.

[Operator Instructions] As a reminder, this conference call may be recorded. I would like to introduce Ms. Susan Pietropaolo. Please go ahead..

Thank you, Carmen. Good afternoon, and welcome to the Aptose Biosciences conference call to discuss financial and operational results for the year-end and fourth quarter ended December 31, 2020. I am Susan Pietropaolo, a 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 and 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 that are not guarantees of performance, and it is possible that actual results and performance could differ materially from these stated expectations.

They involve known and unknown risks, uncertainties, and assumptions that may cause actual results, performance, and achievement to differ materially from those expressed. To learn more about these risks and uncertainties, please read the risk factors set forth in Aptose's most recent annual report on Form 10-K and SEC and SEDAR filings.

All forward-looking statements made during this call speak only as of the date they are made. Aptose undertakes no obligation to revise or update the statements to reflect events or circumstances after the date of this call, except as required by law. I will now turn the call over to Dr. Rice, Chairman, President and CEO of Aptose Biosciences. Dr.

Rice?.

Thank you, Susan. I'd like to welcome everyone to our call for the year-end and fourth quarter ended December 31, 2020. Today, I want to highlight several matters. First, I want to express that CG-806 is delivering clinical signals that give us the confidence to begin the natural evolution of Aptose into the next stage of development.

Towards this vision, we previously recruited Rafael Bejar, MD, PhD, as our Chief Medical Officer, and now we have recruited additional skill sets to our senior leadership team.

George Melko, Pharm.D brings more than 20 years of senior regulatory experience to Aptose as Vice President of Regulatory Affairs; and Rob Killion, PhD, has been named to the newly established position of Vice President of Chemistry, Manufacture and Control or CMC.

George and Rob bring years of demonstrated leadership and they considerably strengthened our expanding CMC and regulatory functions at a critical time for Aptose. You can read all about their experience in the press release that we distributed last week.

Suffice to say, we are pleased that we attracted such quality talent to Aptose and we believe they will help us achieve that next level of maturation as a biotech company.

And just as we are welcoming George and Rob to the company, we watch the departure of a dear friend and a business partner with whom I have worked closely for the better part of the last decade. Most of you are likely aware that today we announced the resignation of our Executive Vice President and Chief Financial Officer, Mr.

Greg Chow, who is leaving Aptose to pursue a new opportunity at a pre-IPO biopharma company. Over several years, Greg and I worked closely together to grow and transform Aptose to a clinical stage company with two unique and exciting product candidates.

Greg is respected and beloved by all of us, and it has been an honor and a privilege to work side-by-side with Greg. This is the appropriate time in the evolution of Aptose and in Greg’s career for him to make this move. I am fully supportive of this career move at this time, and we are certain of his continued success.

Going forward, I will serve as the Chief Accounting Officer and Dr. Jotin Marango, our Chief Business Officer will assume Chief Financial Officer duties until a permanent CFO is announced.

Well, while I can spend more time appraising these individuals and emphasizing how much all of them either have done or will do for Aptose, we now need to move on to discuss other advancements. First, I wish to note our financial status.

During 2020, as a result of our progress and market conditions, we were able to appreciably strengthen our financial position, which gives us cash runway into the first half of 2023, allows us to accelerate our clinical programs and to significantly expand our drug substance and drug product manufacturing for CG-806.

Speaking of CG-806, let's address its generic nomenclature. As you likely saw in our press release today, the United States Adopted Name, or USAN Council recently adopted luxeptinib as the non-proprietary name for CG-806.

This is another step in the maturation of the drug and we will use luxeptinib for all future references, including scientific publications and corporate materials, and we will take the liberty of calling it lux for short.

In today's call, we will give you a quick recap as we look back to the highlights of 2020 for each of our clinical programs with a more general status update. Looking forward, as you know, we expect to present updated quantitative data around EHA in June and around ASH later this year. And so any updates today will be more qualitative in nature.

Also, despite the challenges COVID presented for so many people and businesses, Aptose executed on our three clinical trials, two studies with our kinase inhibitor luxeptinib, or lux, one in patients with acute myeloid leukemia, or AML; and the other in patients with B-cell cancers; and the third trial with our MYC inhibitor, APTO-253, in patients with AML and MDS.

Now I will ask Dr. Rafael Bejar, our Chief Medical Officer to provide a recap of our clinical activities for luxeptinib.

Raf?.

Thank you, Bill. During 2020, we completed fourth dose levels in our Phase I trial of luxeptinib B-cell malignancies, including chronic lymphocytic leukemia, or CLL and non-Hodgkin’s lymphomas, or NHL, who have failed or intolerant to current therapies.

We first presented early clinical data, demonstrating favorable on target pharmacologic activity and steady-state pharmacokinetics and patients, increasing plasma exposure with increased dose levels with sustained steady-state trough levels above two micromolar in the ongoing cohort 5 in which patients are receiving 750 milligrams of lux twice daily.

Progressive evolution of leading indicators of pharmacologic and clinical activity to date, including modest tumor reductions in different tumor types, such as CLL and SLL and follicular lymphoma, and that luxeptinib is well tolerated in patients at 150 milligrams, 300 milligrams, 450 milligrams and 600 milligrams twice a day over multiple cycles.

You will recall that during ASH in December and earlier this year, we highlighted a follicular lymphoma patient, who began to experience reductions in tumor size after escalation of their dose from 450 milligrams to 600 milligrams twice daily.

That patient continues now on study for more than a year and has been – has seen continued reduction over multiple scans. A portion of these data from the B-cell cancer trial are summarized in the corporate presentation on our website.

And we look forward to presenting subsequent data and details of these findings and others with B-cell cancer patients around EHA, the European Hematology Association meeting in June. And I will note that the EHA abstracts we submitted were placeholders based on data we had available at the time of the submission this past December.

The posters we present at EHA will include updated data. The good news is that dosing has continued with no concerning drug-related safety trends to-date, including in the expanded 750 milligram dose cohort.

Of importance, we have now seen consistent or concerning suppression of bone marrow function as myelosuppression is the dose-limiting toxicities for the majority of therapeutic agent. As a result of the safety and tolerability to-date, we are continuing to treat newly enrolled patients at the 750 milligram dose level.

For more specific information on the B-cell malignancy trial and the clinical sites that are enrolling patients, please visit clinicaltrials.gov. Now on to a discussion of the application of luxeptinib in AML.

Luxeptinib is the only known clinical agent that potently inhibits both FLT3 and BTK giving a broad therapeutic potential across the spectrum of lymphoid and myeloid hematologic malignancies. And in October, we were grateful that the FDA allowed us to initiate a Phase I trial luxeptinib in patients with AML.

As I am sure many of you are aware, despite recent advances in the targeted treatment of AML, the majority of patients will relapse or remain refractory to current therapies, including gilteritinib, midostaurin and venetoclax and there remains a tremendous unmet need for new therapies.

As a reminder, luxeptinib not only inhibits the wild-type and mutant forms of FLT3 and BTK. It also suppresses other select clusters of kinases that drive oncogenic signaling pathways that are operative in AML, including the FLT3, PDGFR-alpha, CSF1R, Akt, RAS, ERK, STAT and Syk pathways.

Yet it avoids off-target activity that might contribute to toxicity without clinical benefit.

The FDA allowed us to initiate dosing in AML trial with a 450 milligram twice daily dose based on data from our Phase IA/b B-cell trial, which showed that the 450 milligram dose level was safe, well tolerated in achieving plasma exposure levels that inhibited phospho-FLT3 activity, which is a key driver of AML.

As we’ve reported, we rapidly enrolled patients on study drug, including both AML patients with the FLT3-ITD mutation, as well as patients with wild-type FLT3, and found that initial PK data were consistent with exposures observed at the 450 milligram dose level in CLL and NHL patients.

The trial design is the traditional three-plus-three dose escalation, but it also allows us to enroll more than the minimum three patients at a dose if appropriate, allowing us to explore the safety and activity of lux in additional AML patients as we dose escalate.

At the first dose level of 450 milligrams BID, we observed exposures leading to meaningful inhibition of multiple oncogenic driver kinases by plasma inhibitory assay or PIA assay, as well as encouraging anti-leukemic activity, including a patient with a marrow complete response who remains on study after multiple cycles with no apparent safety signals.

Aptose has completed the 450 milligram BID dose cohort, and has escalated to the 600 milligram BID dose level.

Also I am happy to report that in the ongoing AML trial, we continue to find that lux is generally well tolerated with no toxicity signals or trends to-date that we believe would prevent dose escalation, and we look forward to reporting to you further on our AML trial around EHA.

For more information on the AML trial and clinical sites that are recruiting patients, please visit clinicaltrials.gov. Now we'll move to APTO-253. During 2020, we progressed our clinical trial with APTO-253 are somewhat under the radar MYC inhibitor being tested in a Phase Ia/b trial in relapsed or refractory AML and MDS patients.

While we are still determining the correct development pathway for APTO-253, we remain intrigued with its potential. As you know, the MYC oncogene is a major driver of cancer cell proliferation, including hematologic cancers.

The development of a safe MYC inhibitor in cancer has eluded research for years and MYC inhibition remains of interest to the pharmaceutical industry. Interestingly, as we may have mentioned to you before, a study published in 2020 demonstrated that even a transient reduction of MYC expression sensitizes tumors to chemotherapy treatment.

During our ASH review, we reported that we had escalated dosing to the fifth dose level of 150 milligrams per meter square. These observations were reported then remain valid today, including continued safety and tolerability and continued dose-related exposure.

Most importantly, we continue to observe MYC repression, an indicator of activity will suggest future potential for broad anti-cancer activity. We are pleased by such indicators of activity from both luxeptinib and APTO-253, and then safety and tolerability of both candidates are allowing dose escalation, all three of our ongoing trials.

As we treat more patients at higher doses, we are generating additional pharmacokinetic and pharmacologic data that we look forward to providing updates at EHA and ASH meetings this year. I will now turn the call over to Mr. Greg Chow, who will review financial results for the year and fourth quarter.

Greg?.

Thank you, Raf, and good afternoon, everyone. We ended December 31, 2020 with approximately $122 million in cash, cash equivalents and investments compared to $133 million at September 30, 2020 and $98 million at December 31, 2019.

During the quarter, we use approximately $10.4 million of cash in operating activities, which were attributable to increased activities surrounding luxeptinib and 253 and for general and administrative purposes. Moving on to the income statement. We had no revenues for the fourth quarter or the year ended December 31, 2020.

Research and development expenses were $9 million for the quarter and $29.3 million for the year. G&A expenses for the quarter were $5.8 million for the quarter and $26.5 million for the year. Our net loss was $14.7 million for the quarter and $55.2 million or $0.67 per share for the year.

More detailed information can be found in our filings on EDGAR and SEDAR. Before I turn it over to Bill, I want to add a couple of things on a personal note. I have thoroughly enjoyed my time at Aptose over the past eight years. I want to especially thank Bill for the opportunity as well as the Board support both in challenging and good times.

I think there are two occasions when it is considered ideal to leave a company.

The first is the obvious one when a company is acquired and the team naturally disperses, and the other one is when a company is in the best financial and operational condition has ever been, which is where Aptose is today with three dose escalating clinical trials and more than two years of cash runway. I am not just saying this for optics.

I remain very confident about the programs at Aptose and the growing team under Bill, Jotin and Raf’s continued leadership. And I strongly believe it is Aptose position to execute on this strategy and to deliver on its promise to develop innovative therapies for patients that have failed all currently available drugs. Thank you, everyone.

It's been pleasure speaking to all of you out there on these calls. And with that, I'll turn it over to Bill. Thanks..

All right. Thank you so much, Greg. I'll remind everyone that on the line we also have with us, Dr. Jotin Marango and Dr. Rafael Bejar. As we open the call for questions, feel free to pose a question to any of us. Operator, if you could please introduce the first question..

Thank you. [Operator Instructions] Our first question comes from Tyler Van Buren with Piper Sandler..

Hey guys. Good afternoon, and Greg, best of luck in your future endeavor. I guess I have a couple. I get the first one is on the CLL, NHL study. You mentioned that, that follicular lymphoma patient that dose escalate from 450 to 600 continued to experience reductions on subsequent scans.

So could you help us understand those reductions? Is it kind of greater than that 27% that we saw maximum at ASH? Or in general, has that maximum tumor reduction gone up from that level? Maybe even qualitatively, can you state that? And then the second question is the AML complete response is very exciting.

I'm assuming it's not that patient at ASH that had the reduction down to a 10% blast count since that patient kind of started to trend upwards after that. I just want to confirm that that is indeed a new patient. Thank you..

Hi, Tyler. Thanks for the questions. So I'll start on these questions and then I'll ask Dr. Bejar if he wants to jump in.

Regarding the follicular lymphoma patient, what we have described and we will continue to describe qualitatively for now is that this patient has continued to observe decreases in tumor size upon serial biopsies – or serial scans, so we are very happy with what we're seeing with that patient, and we will provide the absolute quantitative data at EHA.

In a moment, Dr. Bejar may want to add to that. Regarding the AML patient, you are correct that the complete response was observed in a completely separate AML patient because as you indicated that that earlier patient that saw dramatic reductions from 93% down to 10% in terms of their peripheral blood blast.

Those blasts did begin to rise because they had persistent clones at that exposure level, and that patient did go off of our study. This is a completely different patient and again, we are very happy with what we've seen. Dr.

Bejar, do you want to add anything to that?.

No. I think that's an accurate assessment of those two patients..

Great. Thanks for taking the questions..

Our next question comes from Gregory Renza with RBC Capital Markets..

Hey, Bill and team congratulations on all the progress, and Greg, to you, I wish you all the best in your future endeavors, and thanks for taking the questions guys. And Bill, just to follow-up and certainly, respecting the qualitative approach to characterizing what your findings are today.

I'm just curious, on the AML CR that you're disclosing today.

Just curious if you could perhaps maybe provide some context around how it fits in your expectations of the activity that you're seeing? And then namely on this dose level, perhaps on the speed at which it occurred and how perhaps, it actually translates to the dose upward and the activity that you're expecting to see from those as well? And then, Bill, I'm just throwing my last question here.

Perhaps, if you could have the ability to just set some of those expectations on what type of quantitative data you think could be teed up for mid-year disclosure, perhaps – on both the AML trial as far as patients as well as on the B-cell trial. Thank you very much for taking the question..

All right. Thanks, Greg. That was a clot the question, very clever. Okay. So in terms of the expectations of what we've seen at the 450 milligram dose in AML, let's step back in time, you will recall that we initiated studies with luxeptinib in patients with the B-cell malignancies because we felt as though these patients are not quite as sick.

We were starting at lower dose levels. We wanted to continue to dose escalate. And also because we expected the drug to be safe and we expected it would take higher concentrations exposure levels to truly see responses in the B-cell malignancy patients. And that's somewhat borne out.

We're starting to see that at the 600 milligram, 750 milligram dose level. You'll also recall that as we went through that trial, we watched at each dose. What we felt would be the appropriate dose then to transition over to AML. We chose 450 milligrams because as Dr.

Bejar said, we in the PIA assay, we inhibited FLT3 and other pathways, it was safe, well tolerated. And we felt as though that was the lowest dose that could show clinical activity in AML patients. So we transitioned into 450, and we've been telling everybody all along that we believed this drug is active.

So these data today truly show that, that this drug is an active drug. And so we show that we've proven that even at the 450 milligram dose level or starting dose level, we have seen a CR. Now that will not be the case for every patient at the 450 milligram dose level because some patients will require additional exposures.

They'll have various other pathways that are operative. And so as we continue to dose escalate, we hope to see additional responses in the clinic. But the big news is that this patient, they continue on study, they've had no safety signals as we've seen, and we've seen a CR, and we'll leave it at that for the quantitative data on this patient.

In terms of when we get to EHA mid-year, we plan on providing all available data on all patients at every dose level at that time, both clinical status, in effect, all available data on the patients that have been sourced verified to date. Dr. Bejar, did you want to add to that or Dr.

Marango?.

Yes. Just to reiterate what you said, Bill, the goal of the disclosure today is to highlight the activity of the drug and as we gather more information, we'll make a more complete picture that we’ll set out at EHA..

Thank you. Does Dr.

Marango have anything to add to that one?.

No. Well said, yes, Raf. Thank you. Nothing to add..

Thank you. All right. Thanks so much, Greg..

Thank you..

Thank you. Our next question comes from Alethia Young with Cantor Fitzgerald..

Hi. This is Emily on for Alethia. Thanks for taking our questions. I was wondering about the patient that you previously said at ASH had a case of hypertension, and it was possibly related to study drug.

Are there any updates on that patient? And do you still believe that that was kind of a one-off case? And then maybe could you possibly discuss your next development plan as you're kind of getting towards the rest of the Phase I data? Thank you..

All right. So – thank you, Emily. I'll address those. So we feel as though we’ve put to bed the patient that, that was on the B-cell malignancy trial at the 750 milligram BID dose level. This is a patient that we observed Grade 4 hypertension, and they had only been on the drug, I think they had completed four days.

So at that time, that is quite a remarkable finding. And so it raises your antenna, is there something wrong? So what you have to do then is take your time, go back review the data. When we've done that we realized this patient had been on multiple cycles, prior cycles of ibrutinib, which can lead to new onset of hypertension.

We also know that this patient actually began new onset hypertension before they ever went on 806. Upon screening, that was, what, two weeks before they went on our drug. They developed Grade 1 hypertension and that was new onset.

The day that they began on our drug, that morning, they had Grade 2 onset, do it had already progressed before they ever even received our drug. Two days later, they were already in Grade 3, four day – and two further days, they’re in Grade 4. So they already had the new onset in the aggressive hypertension.

The other two factors is that we went back and we looked at the exposure levels in this patient.

We're not even convinced that they were taking truly all of the drug because the exposure levels in the plasma of their drug was at least six-fold less than all the other patients on the trial at that stage even at the three or four-day dose at that time point in the trial. So they had very little drug in their system.

We also then reviewed all cases, all patients of either hypertension, hypotension, any cardiovascular events, we found no correlation of drug exposure with any of those.

So in our view, we understand all the physicians at that time said, it was possibly related, but we don't believe that it's truly related to our drug, and we have seen no such trends since then. So in a moment, I’ll ask Dr. Bejar, if he wants to add to that. And then, I think you asked about the next development milestones that we present.

So again, the next major release of data will be at EHA in June. We plan to provide data on, again, all the patients, all the data available on the AML trial at all dose levels, and the same will be true for the B-cell malignancy trial. And so that will include the 750 milligram dose level. Dr.

Bejar, did you want to add anything to that?.

I would just reiterate the point that you made about the exposure and the short duration of treatment. And the pre-existing hypertension altogether made us look hard to see if there were any other instances like that.

And looking at all our other patients in both the AML and the B-cell malignancy trial, we have not seen any association with change in blood pressure even in patients who come into our study with a history of hypertension.

So I'm very comfortable that this is a one-off as you described it in your question that this is not a true recurrent safety signal. And we’re glad that we took the time to analyze that carefully to understand that better..

But that's a really good point. We did take the time. Everybody – I know everyone wanted just to get patients back on immediately, but we took the time to make sure we understood it, and that gave the clinicians on the trial much greater comfort. I'll also ask Dr.

Marango, if he wanted to add any comments regarding the next development plans going forward..

Yes. Thank you, Bill. And thank you for the question. I'll echo some of the thoughts that Bill mentioned and Raf described previously. Our studies right now, all these dose escalation, they are designed to really test broadly and you've seen the enrollment criteria. We are taking all comers.

So it's really upon us to try to test different types of patients, different types of genotypes as we go through the dose escalation, keep a diverse group out there that we are testing for efficacy and safety because that's the only way that we are going to try to understand the value of the drug going forward.

So once we have data from a diverse group, right, that will show us not only how to best position the next few cohorts be the expansion of Phase II, but it's also going to give us hints on the breadth of the value here. And that's really the strategy that we're following right now, and this is something we've mentioned in the past. Thank you..

I just want to add one thing to that. So just to remind everyone, these are deep relapsed/refractory patients, and these patients have AEs and SAEs all the time. It's very difficult for often for the physicians to really tease that out.

Is it drug-related, is it not? Is it related to a prior drug that they have? And so anytime this happens, we have to step back and make certain that we understand what's going on and then also maintain fidelity to our protocol. If the protocol says, well, okay, that happened so you must refer to it as a DLT, and you must expand.

We will abide by the protocol and we will then take advantage of that to get more patients on that dose level and gain more data. So I'll leave it at that, and I thank you for the question.

Operator?.

Thank you. Next question comes from John Newman with Canaccord..

Hi, guys. Thanks for taking my question and congrats on the progress here. Exciting to see more evidence of activity. Just had a couple of questions.

The first one is not sure if you can comment on the number of cycles the AML patient had before they saw the CR, or if you can comment exactly if you can tell us whether it was a small number or large number? And also just curious across all the patients that you've treated with CG-806 for AML, have you generally seen blast reductions in most of them? And then the last question is do you expect to have marrow samples for all of the AML patients going forward and also perhaps when we see the data at EHA? Thanks..

All right. John. Well, I'll give you a little something. So it was greater than one cycle and the patient continues on study now safely, but all the quantitative data on that patient will be presented at EHA.

In terms of blast reductions, again, such a diversity of patients, we'll provide all the data on all the patients at EHA, but we've noted with several patients, we have seen blast reductions, but I'm not going to go into all the quantitative data around each patient.

We presented a bit of data on two patients thus far, and we'll do the others at EHA both for this dose level and for the next dose level. That's another thing I did want to emphasize here is the CSRC met, and it was unanimous to move up to the 600 milligram dose level unanimously. And we’re already enrolled patients on that dose level.

In terms of marrow samples that comes down to the clinical sites. We always try to get multiple – a series of bone marrow biopsies from patients throughout the treatment. Perhaps I'll let Dr. Bejar address that a bit further to marrow..

Yes. So to answer your question about the bone marrow samples, we are collecting them both at screening and then longitudinally during the course of the study..

Great. Thank you..

And all the data that we have, we present at EHA. Thank you. Thanks, John. Appreciate the questions..

Sure..

Thanks. Our next question comes from Matt Biegler with Oppenheimer..

Hey, congrats guys. Greg, I'm super sad to see you go, but way to leave with a bang.

Can you maybe just clarify for us what exactly a marrow complete responses? Would that be considered a complete response with incomplete recovery per the WHO criteria? And also if I can try to squeeze in one more question on the patient, can you tell us if this was an ITD or a wild-type patient? Thanks..

All right. So this was a true CR. We included marrow in there just because we knew people would ask, well, are you getting reductions in peripheral blood? Are you getting really, truly getting reductions in the marrow? So we included that term marrow complete response. That was it. In terms of the status of the patient, we have not disclosed that.

We will provide all that data also at EHA. Perhaps Dr. Bejar wanted to possibly add to that..

Yes. Just exactly the same point that you made Bill. I think marrow CR can be confusing, who the real and experts are when they ask you about the European response criteria. This patient had a CR that shouldn't be qualified as marrow-only..

Got it..

Thank you. And thanks Matt for the questions. And it helps us to clarify. Thank you..

Our next question comes from Matthew Cross with Alliance Global Partners..

Hi, guys. Thanks for taking a couple of questions from me. And yes, the same for me, first off, best wishes to Greg on his next adventures. He will be missed. So I guess, as the Phase I for lux continues, I had kind of a two-part question and then a quick follow-up.

First off was as now we're starting to see some evidence of kind of the single-agent response activity, at least in AML, I'm curious, what degree of single-agent activity you feel like you need to see before beginning combinations in either trial of lux? Certainly the direction that CLL as a focus or AML will probably inevitably go.

The second part of that question was do you expect that you'll continue to enroll higher dose cohorts beyond the 900 milligram BID and escalate until considerable talks or DLT before combining, again for both the B-cell and AML trials? And then I'll pop back for follow-up..

All right. Hey, Matt. Thanks for calling in. A couple of questions there. The single-agent response in AML, so we have seen that one. It's important for us to show as many single-agent responses we can in AML.

We also want to understand what are the subpopulations of AML that are most sensitive to this drug, and that can then help guide our clinical trial going forward, expansions and subsequent studies there – thereafter. In terms of combinations, of course, we will perform combination studies.

The FDA wants to see that, big pharma wants to see that, we will do that. But it was absolutely important for us to first demonstrate single-agent activity to prove the drug is active because we start talking about combos before then, then everybody thinks, oh, well, your drug is not active. So we will pursue combination studies.

I'm not going to give you the exact timeline of that. We're not going to talk about the drugs we're going to – we'll combine with. We already have plans for that. But we'll talk about the timing and the combination drugs a little bit later.

In terms of enrolling patients possibly beyond the 900 milligrams, again, we said in the B-cell malignancy trial where it's 750 milligrams BID. Currently, we hope to show that in patients that it is safe, that's what it has been, but we have to complete a full cycle of six patients that are valuable.

If that is true, we will move up to the 900 milligram because we have seen a significant increase in exposure levels between the 650 milligram – between the 600 milligram and the 750 milligram dose level. Now when we introduced the 900 milligram dose level, assuming we do, we will look at the pharmacokinetics.

If once again, we see a significant increase in the exposure levels and it's well tolerated, then we would possibly expand beyond the 900 milligrams. But if you're starting to plateau or if you're starting see any dose limiting toxicity, then you would probably cap it off at the 900 or the 750. I'll ask Dr.

Bejar if he would like to add anything to that regarding both the combos and the 900 milligrams..

Again, I think you summarize it nicely. So for the exposure level and that’s the key point that we need to see what we see in patients at 900 milligrams. If the exposures don't seem to be climbing anymore, it wouldn't make sense to try to push the dose much beyond that, especially if we're running into any toxicity issues.

As far as the combinations go, I think that is the direction that AML is headed as a field. And I think it would make sense to do that, but it'll be very important to understand the safety of the drug in the single-agent and before we start combining with other agents that have known toxicity..

Thank you, Raf. Matt, it sounds like you had one additional question..

Yes. Thanks, Bill and Raf on both those fronts. Just a quick follow-up, whether we can get some kind of, again, maybe qualitative update.

I know the focus or certainly some of the big exciting news is around AML, but pressing a little bit more on the B-cell study, I was curious to get a little bit of an update on whether efforts to enroll CLL patients, which I guess we're now going to have a focus going forward at these higher dose levels.

If that had been, begun to bear some fruit with the lux Phase I and whether you're seeing that have any kind of material impact on the trials enrollment rate? Is you're kind of stratifying for that particular CLL cell type?.

Okay. So it’s actually a very good question. So we're at the 750 milligram dose level, and it appears to be well tolerated whereas we're achieving the PK levels that we expect, and we want to continue to dose escalate through that level.

So we want to get patients on, they have to be reasonable patients that we believe can actually complete the 28-day cycle. So we are not going to focus exclusively on CLL patients. We will continue to enroll CLL patients, but we all know that they're becoming a bit more rare. They're staying on other drugs a little bit longer now, but they are failing.

So as those patients fail, and we just heard this from one of our investigators recently, they're excited about putting some of the patients on our drug that have failed some of those other experimental drugs that you mentioned that I will not name. So what we need to do is continue to dose escalate.

We will include CLL, but we've also seen activity now in a follicular lymphoma patients. So there are so many lymphoma patients and types of diseases within lymphoma that still need new medications. So we plan to continue to place those patients on study, look for activity there, and then hopefully, we can show broad activity in lymphomas.

And then likely in or – and then try to pursue this patient population that’s failing all other drugs in the CLL population that once they fail the other drugs, they need a new drug that can inhibit BTK wild-type and mutant form of BTK, but a lot of other pathways too. We believe we can serve that population.

But again, it takes a lot of drug and you have to hit quite a few pathways. So that's why we need to continue to dose escalate for that CLL population and they will come along, but it will be slow with the CLL, and then also focus in parallel on the lymphoma patients.

So it's like driving, if you start down one lane and the traffic stops, you don't sit there and whine and cry, you change lanes and move on. And so we will continue in the lane with CLL as the best we can, and we'll move into the other lanes and try to get the lymphoma patients on there too. Dr.

Bejar, any addition to that?.

I’d echo with what Jotin said earlier that one of our goals of this study is to really understand the breadth and activity of the drug. You don't want to limit ourselves to any one indication at this moment.

So we will take the opportunity to address all comers as we can and move more quickly with dose escalation to get to that point where we can expand..

Much more succinctly and eloquently said. Thank you..

Great. And thank you to you both for helping kind of let me know how you guys are going to be navigating traffic going forward on these kind of trial, and thanks for letting me squeezing another one. Appreciate it..

All right. Thanks..

Thank you. Our next question comes from Soumit Roy with JonesTrading..

Hi, everyone. Congratulations on this building, validating data, and I will add my best wishes to Greg also on his future endeavors. It's good to see the deep mechanistic hypothesis coming to fruition with translating into clinical activity. One question is because you have such a broad targeting range with lux.

Do you – what worries you the most, the hematological recovery? Are you turning this marrow into plastic marrow? Is that a concern of what's the time range you think is comfortable where you can – you feel this is – that's not a big concern.

And another is what's your strategy to enroll a little earlier line patient, would you have to wait until you can combine it with [indiscernible] or venetoclax or some kind of agent? Or you can see your investigators be able to bring in at least third-line patients rather than waiting for very late lines?.

All right. Soumit, thanks for the question. So I'll answer this in a couple of ways then I'll turn it over to Dr. Bejar to talk about the second question there. So you talked about what do we want to see with the duration, the length of activity. Again, AML patients, you hope to get them to a CR. That is a significant milestone.

We hope that this drug can hit multiple pathways and provide real assistance to these patients. But in AML, you're never certain about what the future is going to bring in AML. And so if we can clearly demonstrate single-agent activity, try to get as much benefit to these patients as possible to get the CRs, then there are additional avenues.

You not be able to get them to a transplant. You might – and this also sets you then up for the combination trials going forward. So I don't want to get into the exact timeline that you would be requiring in an AML patient. In the B-cell malignancy patients, you would expect to see a longer duration of benefit.

So perhaps I can turn that back over to Dr. Bejar and he can add to your questions..

Yes. So nothing really to add, which you just mentioned, I think that's accurate that for AML patients, we hope to see good responses. But it will be certainly different than it will – then in the B-cell study. I think we have the advantage of doing these studies in parallel.

So we can learn not only about the activity of the drug, but we can also learn about it safety in different contexts. So you asked specifically about concerns, including myelosuppression and so on by being able to test patients who have relatively normal marrow function, but may have a lymphoma or otherwise we get a sense of that.

And I'd say that we haven't seen any concerning signals there. So I think that we have the potential for being safe without being overly myelosuppressive with CG-806. And then to your question about being able to move into earlier lines of therapy. That is a great point. And of course, we would very much like to do that.

The patient interests come first, so they need to exhaust all those therapies that are likely to demonstrate benefit. But given the diversity of AML and the different populations that get it, not everyone has the same options available to them.

Obviously, older unfit patients don't have, for example, an approved regimen that contains a FLT3 inhibitor if they're not receiving induction chemotherapy in the frontline. So whether they do that on study or not, there really is nothing approved for them in that setting.

So that might be an opportunity to bring a drug like luxeptinib closer to frontline. But I think that the direction that AML is moving ease in combination. So I think your assumption there is likely correct that to do so it'll have to be in combination with other agents..

Yes. And we would identify that dose before we went toward….

Okay. Thank you so much, and congratulations again..

Thank you..

Thank you. And we have time for one more question – question from Jason McCarthy with Maxim Group..

Hey, everyone. It's Dave on the line for Jason. Thanks for taking my question. So as you mentioned on the presentation, the mechanism of action of CG-806 lends itself to a wide range of indications.

So with that in mind, I was just wondering if you're currently looking at any other hematologic malignancies to pursue in the near future?.

So yes we are. So what we try to do is base it on hard science. One, is we understand the targets that are hit by this molecule. We try to then identify which pathways are impacted by those kinases and in what diseases, and then begin to explore those both first preclinical and then clinically. So yes, we are doing that and we will continue.

And it's really great to see that this molecule in the clinic is now still being well tolerated. We're beginning to see single agent activity that helps us think how do we expand. So we always have – so I talked earlier about how we – it's – the drug is now giving us confidence to move to that next stage.

And that's part of what you're seeing is now that you start seeing single-agent activity, you have all these plans, you can now begin to implement them. So that's a little bit of a long-winded path. But does Dr.

Bejar want to add anything to that?.

I think the only other consideration is that different genotypes in the myeloid malignancy universe may have different sensitivity to a drug. So I think we're doing the right thing by exploring AML first.

It's that the area with greatest need and perhaps the greatest sensitivity, and as we get to higher dose levels, we're able to explore other indications that might be a more appropriate time to consider them..

Great. Guys, thanks for the additional color..

Thanks, Dave. And before we hang up, I would like to say one additional thing. I think most everybody out there, they know how close Greg and I have been working through this company for a long time. And I heard from a couple of people very quickly and it's as if they wanted me to be upset, they were shocked that I was not upset, but I'm not.

I am so happy for Greg. I'm proud of him. We will continue to interact, and this is a metaphor that he's going to hate. But I have kids, my oldest daughter when she went off to college, I knew I wouldn't see her everyday. I get to talk to her everyday. I knew I would miss her deeply, I guess what I got to talk to her.

And I was so proud of her, I got to see what she was going to do in her next phase. Greg is going into his next phase. He's going to go into a company I think that can deliver IPOs. And I'm so happy for him and I just wanted everybody to hear that. So our company will not miss a beat. We'll be fine. Greg will be fine. And I just had to say that. Thank you..

And we have no further questions in the queue, sir..

All right. Well, since there are no further questions, I'll just thank everyone for joining the session this afternoon. 2020 was quite a year, focused on advancing our two, and I'll call them well tolerated hematology compounds in the clinic.

We're pleased that we're now beginning to see meaningful clinical activity and we greatly appreciate, and I mean this, all of our employees, I hope they're listening today, our investigators on the clinical trials, but most of all, it's the patients. I mean, these patients take a risk to come on to these clinical trials.

They continue to help us advance this important work. We also thank our shareholders and analysts for your support, staying with us. We look forward to keeping you apprised of our progress. Thank you everyone. Have a wonderful evening. With that, bye-bye..

And thank you, ladies and gentlemen. This concludes today's conference. You may all disconnect and have a wonderful day..