Good morning ladies and gentlemen. Welcome to the Bio-Path Holdings Third Quarter 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. Following the formal remarks, we will open the call up for your questions. I would now like to turn the call over to Kerry Conlin of Stern Investor Relations. Please proceed..

Thank you, operator. Welcome to the Bio-Path Holdings conference call and webcast to review the company’s third quarter 2019 earnings results and to provide an update on recent pipeline and corporate developments. Earlier, we issued a press release which outlines the topics that we plan to discuss on today’s call.

The release is available at biopathholdings.com. With me today from Bio-Path are President and CEO, Peter Nielsen and Vice President of Finance and Accounting, Anthony Price. Before we begin the call, I would like to remind you that today’s discussion will contain forward-looking statements that involve risks and uncertainties.

These risks and uncertainties are outlined in today’s press release and in the company’s recent filings with the Securities and Exchange Commission, which we urge you to read. Our actual results may differ materially from what is discussed on today’s call. With that, I will now turn the call over to Bio-Path’s CEO, Peter Nielsen..

Thanks Kerry. Good morning, everyone and thank you for joining us today. Throughout the third quarter, we continue to execute on our clinical development plans across our DNAbilize platform on innovative RNAi nanoparticle therapeutics.

As I will describe in more detail later in the call, we have continued treating patients and are nearing completion of the safety portion of the Phase 2 clinical study with prexigebersen in combination with decitabine. The study contains two cohorts of patients.

The first in untreated acute myeloid leukemia or AML and high-risk myelodysplastic syndrome or MDS patients; and the second cohort in refractory relapsed AML and high-risk MDS patients. Going forward, we plan to add venetoclax to evaluate the efficacy of the triple combination of prexigebersen, decitabine and venetoclax in both cohorts of patients.

I will begin my discussion with a review of our platform technology. As you know, the DNAbilize platform in our proprietary anti-sense RNAi nanoparticle technology, which we use for the creation of nucleic acid therapeutics.

DNAbilize therapeutics integrate with the cellular membrane, because of their unique structure allowing the anti-sense drug to be delivered to the diseased cells with high uptake into the cell via incorporation into the lipid layers. There has been no evidence of toxicity associated with our technology.

We are extremely enthusiastic about the potential of our DNAbilize platform for developing novel treatments for patients suffering from disease with high unmet medical need. Let’s review the progress we have made advancing our lead product candidate prexigebersen. Prexigebersen is being studied in a Phase 2 clinical trial for the treatment of AML.

As a reminder, this trial is a multi-center study that originally studied prexigebersen in combination with low-dose cytarabine or LDAC in de novo patients with previously untreated AML who are not otherwise eligible for standard or high intensity chemotherapy regimens or who have elected a low intensity regimen.

The trial was open-label with a two-stage design to assess the safety profile, pharmacokinetics, pharmacodynamics and efficacy of prexigebersen. The primary endpoint of the study was complete remission, including patients who achieved incomplete hematologic recovery and complete remission within complete platelet recovery.

Secondary endpoints assess the safety and efficacy of prexigebersen, including overall survival, time to response, duration of response and adverse events as evaluated by physical examination findings, vital signs and clinical laboratory tests. In April 2018, we presented exciting interim results from our Phase 2 study.

And during the first quarter of 2019, we were pleased to report additional analysis from the study.

In our original interim analysis from the ongoing Phase 2 study, our results showed that 47% of the evaluable patients showed some form of response to the combination treatment, including four patients with complete remission or 24%, and four patients with stable disease, including one patient who had achieved a leukemia free status and one patient who had significantly reduced bone marrow blasts.

As you may recall, during the first quarter of 2019, we announced updated interim results from the study.

The updated interim results showed that the efficacy profile had improved to where 11% or 65% of the 17 evaluable patients had a response, including 5 or 29% who achieved complete response, including 1 CRI and 1 morphologic leukemia free state and 6 stable disease responses, including 2 patients who had greater than 50% reduction in bone marrow blasts.

Importantly, through investigation by the principle investigators, it was observed that 68% of these patients were secondary AML patients, an extremely difficult class to treat.

These updated interim data from Stage 1 of our Phase 2 study of prexigebersen in de novo AML patients only increased our confidence in the safety and efficacy profile of prexigebersen and underscore its potential to treat AML patients.

The complete response rate for LDAC treatment alone for this class of patients in this study was benchmarked at 7% to 13%, whereas prexigebersen treatment with LDAC showed a 29% CR rate with a highly favorable safety profile.

The recent approval of the frontline therapy venetoclax provides an opportunity for combining prexigebersen with the combination of venetoclax was decided in for the treatment of de novo AML patients. We have said before we view prexigebersen as an ideal combination candidate with frontline therapy.

Our aim is to match prexigebersen with the leading frontline therapies to improve treatment options for patients. As the treatment landscape evolves, we will continue to respond to those advances. The plans for our registration directed clinical development program for prexigebersen as a treatment for AML reflects those changes.

Firstly, we have amended the existing Stage 2 clinical trial, the key change in the amended Phase 2 study is the inclusion of patients with high-risk myelodysplastic syndrome or MDS and refractory relapsed AML patients.

The restructured Phase 2 clinical trial now has two cohorts of patients, the first being the untreated AML patients as existed in the pre-amended trial, but with the addition of high-risk MDS patients and second cohort comprised of refractory relapsed AML patients and high-risk MDS patients.

The amended Phase 2 study is evaluating the safety of prexigebersen in combination with decitabine in both cohorts of patients at a dose of 60 milligram per square meter in combination with decitabine.

The study is evaluating patients for a study assessment of prexigebersen and decitabine with a goal of determining the combination to be safe in at least 6 evaluable patients. Once completed, we plan to modify testing of both cohorts of patients to add venetoclax to the prexigebersen, decitabine combination treatment.

Once we have completed the 6-patient safety assessment of prexigebersen, decitabine, venetoclax combination, the efficacy segment of this trial can commence.

It is anticipated that each cohort will include an interim assessment of 19 evaluable patients that would assess whether the treatment efficacy or the combination of prexigebersen, decitabine, venetoclax exceeds the efficacy of current standard of care therapy with statistical significance.

Upon such favorable data, Bio-Path would petition the U.S Food and Drug Administration or the FDA for accelerated approval. The efficacy segment of the trial is expected to be conducted at up to 10 clinical sites in the United States.

Moving forward, the company intends to evaluate potential clinical sites in Europe with an emphasis on patient accruals. Overall, these transformational steps will result in two registration directed cohorts of our Phase 2 clinical trial in AML.

Both cohorts will study prexigebersen plus decitabine plus venetoclax, one for untreated AML and MDS, the other for relapsed refractory AML and MDS.

Before turning to our additional programs, I would like to briefly touch on our plan Phase 1 clinical trial of prexigebersen patients with advanced solid tumors, including ovarian and uterine pancreatic and hormone refractory breast cancer.

This trial is expected to be conducted at several leading cancer centers and is planned initially to evaluate safety and efficacy of prexigebersen starting with ovarian and endometrial cancer.

Patients diagnosed with recurrent ovarian and endometrial cancer often have poor outcomes and is our hope that prexigebersen may provide the clinical benefit for such patients. We are finalizing our IND and expect to begin this study in 2020. Next, let’s review the preclinical data for our third drug candidate BP1003, which targets the STAT3 protein.

We are studying BP1003 for treatment of pancreatic in patient derived tumor model. Previous models have shown the drug to successfully penetrate pancreatic tumors and enhance the efficacy of standard frontline treatments.

The results from our preclinical studies of BP1003 were highlighted in a poster presentation at the American Association of Cancer Research Annual Meeting or the AACR in Atlanta in April. We are excited to be targeting STAT3 for a number of reasons.

Signal transduction and activator transcription-3 or STAT3 though typically inactive in normal cells is aberrantly active in cancer cells. The abilities of tumor cells to proliferate uncontrollably, resist apoptosis or cell death, induce vascular formation and invade distant organs are well-recognized hallmarks of cancer.

STAT3 is a regulator of the genes involved in these cancer processes. More recently, the capability of tumors to evade immune surveillance and avoid destruction by the immune system has also gained significant acceptance in the cancer research field.

STAT3, which is a point of convergence for many oncologic pathways, has emerged as a critical mediator of tumor immune evasion at multiple levels. Activation of STAT3 has been found in many types of cancers, including non-small cell lung cancer, AML and pancreatic ductal adenocarcinoma.

Activation of STAT3 correlates with poor clinical outcome, high-grade disease and metastasis and has been linked with resistance to chemotherapy, including gemcitabine considered a standard of care agent for advanced pancreatic cancer. Therefore, inhibition of STAT3 in combination with chemotherapy is expected to produce enhanced clinical benefit.

The poster at AACR highlighted four anti-sense oligo sequences directly against STAT3 messenger RNA identified by Bio-Path and manufactured using DNAbilize anti-sense RNAi nanoparticle technology.

Cell viability tests and western blots were conducted to determine the inhibitory effects of liposome incorporated STAT3 antisense oligo on non-small cell lung cancer in AML cells.

An ex vivo live tissue sensitivity assay was performed with a panel of 20 pancreatic ductal carcinoma patient-derived xenografts to study the overall activity of BP1003 alone and in combination with gemcitabine. Using previously defined criteria, tissue slice viability inhibition greater than 30% with a P value less than .05 was a response.

For validation of ex vivo results, pancreatic cancer patient xenografts of tumor bearing mice were administered BP1003 and gemcitabine twice a week for 28 days. Tumor volumes were monitored for up to 49 days.

In the tissue sensitivity assay, BP1003 at a dose of 10 micromolars significantly inhibited the tissue slice viability in 9 out of 18 pancreatic cancer derived xenografts by more than 30%. The combination of BP1003 in gemcitabine further enhanced ex vivo efficacy of BP1003 in a subset of patient-derived xenografts.

As the in vivo study with pancreatic cancer patient-derived xenograft models, a combination of BP1003 and gemcitabine caused tumor regression during the 28-day drug treatment period. This anticancer activity was maintained for another 20 days even when drug treatment had ceased.

These very encouraging data were well-received earlier this year in AACR, where we had a very universally enthusiastic response from the audience.

We are particularly excited to launch this program as it will be our first in human validation of this cutting-edge therapy in an especially challenging cancer indication that has limited treatment options.

In addition, BP1003 was selected as the most potent liposome-incorporated STAT3 antisense sequence in decreasing non-small cell lung cancer cell viability. Further validation in AML cells demonstrated that BP1003 inhibited cell viability in STAT3 protein expression.

We are excited by these preclinical data and would be tackling some solid tumors with our proprietary technology platform. We look forward to our IND enabling studies for BP1003 in 2020 with a goal to enter first in human trials with this very promising product candidate next year.

Finally, we have also updated our plans for BP1002, our second therapeutic candidate which targets BCL2. We recently filed an investigational new drug or IMD application for our second pipeline candidate, BP1002. Venetoclax has also shown activity against the anti-apoptotic protein, BCL2 and works by neutralizing the proteins BH3 domain.

It is an improved treatment for chronic lymphocytic leukemia or CLL patients and untreated AML patients in combination with decitabine. However, with the exception of some patients treated with allergenic hemopoetic and cell transplantation, disease relapse invariably occurs oftentimes due to BH3 domain mutation over time.

BP1002 also targets the BCL2 protein. However, BP1002 activity is based on blocking the BCL2 messenger RNA and not the BH3 domain. As a result, we believe that BP1002 could provide an alternative to venetoclax patients who have relapsed.

Further, we believe there could be AML patient relapses from venetoclax treatments representing an additional opportunity for Bio-Path to treat those patients with BP1002. As a result, we have filed for registration of BP1002 in CLL patients including venetoclax relapses. We can amend this registration to include AML relapses if those occur.

The planned modification of our Phase 2 clinical program in AML to include venetoclax combination treatments with prexigebersen will give us early experience with treating BCL2 driven anti-apoptosis in these patients. We have filed an IND and expect to begin our first-in-human study in BP1002 next year.

And as always, we continue to evaluate opportunities to expand our DNAbilize technology platform to other oncology medications. Importantly, we remain well capitalized to fully execute our clinical development plans for our three promising therapeutic candidates.

As a result of our successful financing earlier this year, we now have the resources to achieve a number of key milestones that we believe should significantly enhance shareholder value. With that, I will now turn the program over to Anthony Price for a brief review of our third quarter financials along with balance sheet highlights.

Anthony?.

Thanks Peter. The company reported a net loss of $2.2 million or $0.87 per share for the three months ended September 30, 2018 compared to a net loss of $3.1 million or $5.38 per share for the three months ended September 30, 2018.

Research and development expenses for the three months ended September 30, 2019 decreased to $1.4 million compared to $2.3 million for the three months ended September 30, 2018 primarily due to lower expenses in 2019 related to drug material releases for our Phase 2 clinical trails for prexigebersen in AML and CML.

General and administrative expenses for the three months ended September 30, 2019 increased to $0.9 million compared to $0.7 million for the three months ended September 30, 2018 primarily due to increased legal fees and insurance costs. As of September 30, 2019, the company had cash of $15.4 million compared to $1.0 million at December 31, 2018.

Net cash used in operating activities for the 9 months ended September 30, 2019 was $6.1 million compared to $4.8 million for the comparable period in 2018. Net cash provided by financing activities for the 9 months ended September 30, 2019 was $20.5 million. With that, I will now turn the call back over to Peter..

Thanks, Anthony. In closing, throughout the third quarter of 2019, we have made meaningful progress, particularly in our prexigebersen program. We are dosing patients in new cohorts in our Phase 2 study of prexigebersen and we are moving our preclinical candidates towards first-in-human clinical trials, which should begin next year.

We are enthusiastic about the opportunities ahead throughout the balance of 2019 and beyond and we have a number of numbers of exciting milestones ahead. We look forward to achieving these goals in coming months and year. With that, operator, we are ready to open to the call for questions..

Thank you. [Operator Instructions] Our first question comes from Laura Engle with Stonegate Capital Partners. You may proceed with your question..

Good morning. Thanks for taking my question. First, great progress and still solid cash tradition.

So other than the details provided to either just looking online and looking at what’s going on in some of these spaces as far as other clinical trials, can you give us just any update on the competitive landscape in general as far as anything else you have heard or seeing progress with other clinical trials either AML, some of the solid tumours or the pancreatic cancer space?.

Well, in AML, we are really seeing the results of a pretty active space over the last several years versus decitabine and then of course venetoclax being the most recent news and I think that is the things that we are looking at that is the most important compound. Venetoclax in some respects is similar to our drug.

It has to be combined with a chemotherapeutic agent that will cause the apoptotic signal and in venetoclax treats the ability of BCL2 to neutralize that message. So that’s an importance drug that I think we need target on for right now.

And as I said we believe we can be follow-on two ways to benefit, one to make venetoclax treatments even better, because it will reduce the number of cancer proteins, the division and then secondly it’s indeed there are relapsing mechanisms, so, we can follow them behind.

And as far as solid tumor, there is nothing that I am focusing on I think from the research as we deal with solid tumors is just radiation and chemotherapy’s advanced ovarian is a difficult area right now.

And of course we have a systemic treatment that has shown the ability to penetrate the trauma in the pancreatic tumor and we are told by the investigators that this is the only thing they have seen that can do that. So we are really excited about that..

Great. Well, thanks for the update. I will get back into queue and again appreciate all the thorough detail of this call. So, thanks..

Thank you..

Thank you. Our next question comes from Yi Chen with H.C. Wainwright. You may proceed with your question..

Thank you for taking my question.

I don’t know if you could give some us some color regarding how many of the six patients that are being rolled after [indiscernible] AML versus MDS patients, when do you expect complete the analysis of the safety results?.

That analysis should be coming shortly. We just want it ready to have it closed for this quarter. The interest in the trial has picked up of course I think most people away from venetoclax come on board.

As far as the MDS inclusion at this point, it’s mostly AML, I think that where maybe one or two, I don’t have the table in front of me that has that information, but it’s mostly AML at this point. Clearly, MDS needs treatment, I think based on the numbers we see for comparison.

Going forward, I think the outcome expected value at least for CR is in the 16% to 20% range. So, that’s decitabine treatment. So, I think MDS high-risk is something that we think when we get going really will be a good opportunity for us..

Thanks.

And second question is when do you expect to file the IND for solid tumours, is it going to be in the first half of 2020 and also considering the potential initiation trials for BP1002 and for the solid tumor and potentially even BP1003 in 2020, how should we look at the operating expenses that are going to potentially increase?.

Okay. Let me – so if I can remember this, first of all, the timing on the solid tumors is really close. We have been very active with the FDA as we know or you heard we filed our IND and so response seems to have been good, but that takes additional information requests, which we begun and had to have any conference calls.

So, we are pleased with how it feels, but we have also had commitments for the AML processing to get submitted and then the IND for the solid tumors. The reason why I cite that is it’s for filing it’s more a function of the Q with our electronic submission people.

And I can say that based on where we are at now you could expect we would file in December frankly. It’s just a Q process. So, we are much, much closer than you might think. So, we have been pretty busy on this front.

Now, you probably won’t hear about that until we do our next – until either we do our next earnings call when we announce activities or in fact the IND is granted. We don’t generally press release on filing an IND. It’s not in our view significant enough news, but we are very close on that, Yi.

As far as dollars, recall 1002 and solid tumors are – those are designed as 3 plus 3s, the cash, yes, it is more trials and more CROs, but that’s kind of a scaling up activity, particularly when you consider you are dealing with the lower doses. And so it’s manageable.

And the second thing is 1002, it’s our goal to start that trial by the end of the year, but we have to 1003, it’s our goal to start that trial by the end of the year, but in some respects, we deal with some uncertainty about how much testing maybe needed. An important variable is the effect that this drug has in controlling the new system.

And so part of the design we are doing is looking at what is needed in vivo line that lies to satisfy the safety of those treatments with respect to a potentially new response, which we don’t think will be any, but we have to test it. And so – but anyway that’s color if you will about the potential timing on 1003.

So we think our cash is very manageable, [indiscernible] should more than do it. And so we can look to be raising more flows or potentially, but we are definitely to a point here where we have enough assets in play with quality demonstrated on technology to take on partners..

Thanks.

My last question is whether there any updated preclinical results, regarding prexigebersen in combination with decitabine and venetoclax?.

We test with – we look forward our test is a combination with venetoclax. We already know the benefit we see with decitabine. And three combinations are difficult topics. Now, we haven’t released any of them because we want to keep doing more testing, but the other issue of course as you know is potential for a paper.

So I think where we come out with that, we can release what we think are the incremental benefits that’s typically what we released. That’s what we did I think when we talked about starting the combination with LDAC and I think we also mentioned that at that time with decitabine.

But we do have to consider, particularly if we are working with somebody, they have to report the clamp on us on the data, because they want to do in paper, that’s what happened with BP1003 with some work in pancreatic cancer that hasn’t held quite, because they want to do an AACR paper on it or poster when we have, but we are doing that kind of testing, but not triple, double..

Okay. Thank you..

Yes..

Thank you. And I am not showing any further questions at this time. I would now like to turn the call back over to Peter Nielsen for any further remarks..

Thank you, again everyone for joining us and for your continued support in Bio-Path for making good progress and we hope to have some significant milestones in the near future. Have a great day..

Thank you. Ladies and gentlemen, this concludes today’s conference call. Thank you for participating. You may now disconnect..