Ladies and gentlemen, good morning, and welcome to the Bio-Path Holdings Second Quarter 2020 Earnings Conference Call. At this time, all participants are in a listen-only mode. Following the formal remarks, we will open the call up for your questions. [Operator instructions] I would now like to turn the call over to Mr.

Will O’Connor of Stern Investor Relations. Please proceed..

Thank you, operator. Welcome to the Bio-Path Holdings conference call and webcast to review the company’s second quarter 2020 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 Senior Vice President of Finance, Accounting and Administration, 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, Will. Good morning, everyone. And thank you for joining us today. I hope this finds you all staying safe and healthy. These past months have been a challenge for us all and I’m proud to say that Bio-Path team has rolled up his sleeves and continue making progress advancing our key programs in our clinical development pipeline.

I will begin with our lead product candidate prexigebersen where we have made a substantial progress in recent weeks.

Yesterday we were very excited to announce the dosing of our first patient in stage two of our Phase II prexigebersen for the treatment of Acute Myeloid Leukaemia or AML in combination with frontline therapy, decitabine and venetoclax.

As we have previously reported, Phase II clinical development of prexigebersen and AML commenced with stage one of the Phase II clinical trial, which was open label and treated de novo AML patients with a combination of prexigebersen and low-dose cytarabine or LDAC.

The combination of prexigebersen and LDAC was shown to be safe and more efficacious to treat this class of patients than with LDAP alone. As many of you know, there has been an evolving landscape for standard care in AML. We are delighted with the recent progress that has been made but it is not enough.

Despite these new therapies, there are still patients who are refractory or resistant. And those are the patients we aim to help. A standard-of-care evolve, we adapted our trial design to reflect these changes.

Feedback from treating physicians pointed to a preference for decitabine, the recent approval of frontline therapy venetoclax provided an opportunity for adding prexigebersen to the newly approved frontline two drug combination of venetoclax and decitabine for the treatment of AML patients.

Prior to finalizing our plans, we performed preclinical testing in AML cancer cell lines to assess prexigebersen’s increased benefit to efficacy. Preclinical testing of prexigebersen with the frontline treatment of decitabine and venetoclax, demonstrated the potential to enhance efficacy of the frontline treatments combination.

In the studies four AML cancer cell lines were treated with three different combinations of decitabine, venetoclax and prexigebersen. Decrease in AML cell viability was a primary measure of efficacy. The triple combination of decitabine, venetoclax and prexigebersen showed significant improvements in efficacy in three of the four AML cell lines.

Based on these results, we believe that adding prexigebersen to the treatment combination of decitabine and venetoclax could lead to improved efficacy in AML patients.

The amendment stage two of this Phase II trial in AML is an open label Phase II, a two stage multicenter study of prexigebersen in combination with decitabine and venetoclax in two cohorts of patients, with previously untreated AML and relapse resistant AML.

A third cohort includes treating relapsed refractory AML patients for venetoclax resistant or intolerant with the two drug combinations of prexigebersen and decitabine.

The full trial design plans have approximately 54 patients for the cohort treating relapsed refractory AML patients with the triple combination treatment of prexigebersen, decitabine and venetoclax and the cohort treating AML patients who are venetoclax resistant and intolerant with the two drug combination prexigebersen and decitabine with a review of both cohorts performed after 19 evaluable patients.

The full trial design plans have approximately 98 evaluable patients for the cohort treated AML patients with the triple combination treatment of prexigebersen, decitabine and venetoclax. With a primary review for the cohort performed after 19 evaluable patients and a formal interim analysis after 38 evaluable patients.

The higher number of patients is a full trial design for the untreated AML patients cohort is due to the higher baseline response of the frontline therapy.

The primary endpoint for this study will be the number of patients who achieved complete remission, which includes complete remissions with incomplete hematologic recovery, and complete remission with partial hematology, recovery. An interim analysis will be performed on each cohort to assess safety and efficacy of the treatment.

In the event these results exceed the primary endpoint in a number of patients that meets or exceeds statistically determined thresholds, we plan to seek to convert the trial into a registration trial for accelerated approval. In May, we were delighted to have Dr.

Merrill Hanyan of the Department of leukemia at University of Texas MD Anderson Cancer Center presents a virtual poster presentation discussing this Phase II trial design to an audience of world leading oncologists. We believe that this unique trial design provides us with several definable registration pathways.

We believe that prexigebersen with its promising efficacy and safety profile has the potential to be an ideal combination candidate with frontline therapy.

Next, I would like to briefly touch on our plan Phase I clinical trial for prexigebersen-A in patients with advanced solid tumors, including ovarian, uterine, pancreatic and hormone refractory breast Cancer.

Prexigebersen-A, a fourth Bio-Path drug candidate is a modified product for prexigebersen sharing the same drug substance with enhanced nano-particle properties. This trial is expected to be conducted at several leading cancer centers and is planned initially to evaluate the safety of prexigebersen in solid tumor patients.

Patients diagnosed with recurrent ovarian and endometrial cancer often have poor outcomes. And it is our hope that prexigebersen may provide clinical benefits for such patients. We filed an Investigational New Drug application or an IND and expect to begin the study in 2020.

Turning now to plans for BP-1002, our second therapeutic candidate, which targets the Bcl-2 protein. Last year, we filed an IND application for our second pipeline candidate. BP-1002. Venetoclax has also shown activity against the anti-apoptotic protein Bcl-2 and works by neutralizing the proteins BH3 domain.

It is an approved treatment for Chronic Lymphocytic Leukemia or CLL patients and untreated AML patients. However, with the exception of some patients treated with stem cell transplantation, disease relapse invariably occurs oftentimes due to BH3 domain mutation overtime. BP-1002 also targets the Bcl-2 protein.

However, BP-1002 activity is based on the part of the Bcl-2 messenger RNA and not the BH3 domain. As a result, we believe that BP-1002 could provide an alternative for venetoclax patients who have relapsed, including AML patients who previously received venetoclax treatments.

In November of 2019, the FDA granted us IND clearance to study BP1002 as a [detentail] (Ph) treatment for CLL, including venetoclax, relapses and lymphoma. We intend to file a new IND to include AML relapses.

The planned modification of our phase two clinical program and AML to include venetoclax combination treatments with prexigebersen will give us early experience with treating Bcl-2 driven anti-apoptotic in these patients. We expect to begin our first-in-human study of BP1002 in 2020.

In April, we presented a poster at the American Association for Cancer Research or AACR, Annual Meeting highlighting the plan clinical problem design for our first in human Phase I study of BP1002 in patients with advanced lymphoid malignancies.

The Phase I clinical trial is expected to be conducted at several leading cancer centers including the University of Texas, MD Anderson Cancer Center, the Georgia Cancer Center and the Sarah Cannon Research Institute. Finally, let me review our progress with our third drug candidate BP1003, which targets the STAT3 protein.

This program has shown promising preclinical data and we are very excited for the future of this program. We are studying BP1003 for the treatment of pancreatic cancer in a patient derived tumor model. Previous models have shown the drug to successfully penetrate pancreatic tumors and enhance the efficacy of standard frontline treatments.

The potential for our STAT3 program is compelling for a number of reasons. Signal Transduction and Activator Transcription-3, or STAT3, so typically inactive in normal cells, is aberrantly active in cancer cells.

The abilities of tumor cells to proliferate uncontrollably, resist apoptosis or cell death, induced 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 invade immune surveillance and avoids destruction by the immune system has also gained significant acceptance in the cancer research field. STAT3, which is a point of convergence, for many oncogenic 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 cancer.

Activation of STAT3 correlates with poor clinical outcomes, 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.

Our preclinical data for this program highlighted four antisense oligo sequences directed against STAT3 messenger RNA identified by Bio-Path and manufactured using DNAbilize antisense RNA nano-particle 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 and AML cells.

An ex vivo live tissue sensitivity assay was performed with a panel of 20 pancreatic 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 of less than 0.05 counted as a response.

For validation of ex vivo results, pancreatic cancer patient derived 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 live tissue assay, BP1003 at a dose of 10 micromole are significantly inhibited the tissue slice viability in nine out of 18 pancreatic cancer patient derived xenografts by more than 30% with a P value less than point 0.05.

The combination of BP1003 and gemcitabine further enhanced ex vivo efficacy of BP1003 in a subset of patient derived xenografts. In 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 anti-cancer activity was maintained for another 21-days even when drug treatment had ceased. 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 and STAT3 protein expression. These very encouraging data were well received by the scientific community.

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

Moving forward, we are undertaking an IND-enabling study for BP1003 this year, with a goal to file an IND application with this very promising product candidate later in the year.

As you can see, despite the challenge we faced over the last several months, we have remained committed to driving forward our clinical development programs during this challenging time. We continue to make meaningful progress across our pipeline.

With that, I will now turn the program over to Anthony Price for a brief review of our second quarter 2020 financials along with balance sheet highlights, Anthony..

Thanks, Peter. The company recorded a net loss of $2.0 million or $0.50 per share for the three months ended June 30, 2020, compared to a net loss of $2.5 million or $0.87 per share for the three months ended June 30, 2019.

Research and development for the three months ended June 30, 2020 decreased to $1.0 million compared to $1.5 million of the three months as of June 30 2019. Primarily due to timing of activities related to our Phase II clinical trial or prexigebersen and AML.

General and administrative expenses for the three months ended June 30, 2020 were $1.0 million consistent with a comparable period in 2019. As of June 30, 2020, the company had cash of $14.4 million compared to $20.4 million at December 31, 2019.

Net cash used in operating activities for the six months ended June 30, 2020 was $6.0 million compared to $4.2 million for the comparable period is in 2019. With that, I will now turn the call back over to Peter..

Thanks, Anthony. The months ahead should be exciting as we head into the balance of the year. We look forward to continuing to enroll stage two of our Phase II clinical trial of prexigebersen to treat AML in combination with a now current standard-of-care, and expect to show significant safety and efficacy.

Moreover, we think the addition prexigebersen to this regimen were particularly important to those patients who have relapsed or recalcitrant to venetoclax and decitabine. In tandem with advancing this important program.

We look forward to initiating our first-in-human Phase I program of BP1002 to treat advanced lymphoid malignancies, another oncologic indication that continues to elude current treatments. So as you can see, we have a number of key drivers as we advance our DNAbilize technology in both blood borne cancers and solid tumors.

Thank you for your time this morning. And as always, we appreciate your continued support and encouragement. With that operator we are ready to open the call to questions..

Thank you. Please note that Today’s conference is being recorded. [Operator Instructions] Your first question comes from Laura Ingalls with Stone Gate Capital Partners..

Good morning.

How are you guys?.

Good morning, Laura..

So exciting news especially about the destined for AML, good information is always, I wonder mentioned and it was touched on the last call. And then you mentioned in the press release just the challenges with COVID. And how that is affecting clinical trials.

I wondered if you could just give us an update on that as far as enrollment, number of sites, how it is affecting the patients in the trials.

And then I know you have supply of the drugs for dosing, but how it might be affecting that going forward as well?.

There are several things there. But we do have eight sites signed up for the AML trial going to 10. There is just two more during the process, so we reached our goal in that area to try to have more spots and rolling. I know that the key site, Cornell has lined up for several patients to start there have been the final stages of their IRB review.

So, that seems fine. But the fact of the matter is, and we have had enrollments in that third cohort, which is the intolerant venetoclax and whatnot, you know that is just derivative of the previous amended citabine, prexigebersen safety or a combination, which we continued in an eligible patient to meet enrollment criteria would roll into that.

So, we have had patients and really have a head start on that cohort right now. So, right now, I haven’t heard that word turned off. I think we are better than we were back when people were concerned about, these are immune compromised people.

And people concerned about traveling to the institution, but I think to be honest, the one thing we have to look forward.

Look forward to but be aware of is and I’m sure you heard the CDC come out yesterday and talk about the fact that we are going back-to-school, of course, concerns about uptick in cases that the conformance event with the flu season has made some pretty dire projections for the fall. And I guess we will just have to see what happens on that.

And we are teed-up, our suppliers are, performing and we have more drug batches being delivered. So, the hard part is just predicting the supply lines that you need, based on patient enrollments. So, but the response has been pretty good particularly in these relapse patients.

There is a couple of those cohorts I think, represent real opportunities for us. So, we will have to see. But, the biggest unknown to look for is what the world is going to look like, at least in the United States in September, October, November..

Right, and we wish we knew them. Well I appreciate it, certainly I always appreciate all the information you give us form the call and updates. So you all sty well and I will get back in the queue..

Thank you Laura..

[Operator instructions] Your next question comes from Yi Chen with H.C. Wainwright..

Hi good morning Peter, thank you for taking my questions..

Hi Yi..

Hi. My first question is so among the four AML cell lines tested in the preclinical studies.

The [indiscernible] one cell line, is there a particular specific explanation on this why is the cell line doesn’t perform well with the triple combination, and what percentage of AML patients does this cell line represents in the real world?.

I’m not sure the reason for the minimal response on that. And I don’t know what percentage it is. We just want to take a spectrum of these AML cells and test them and as we indicated we had pretty good results in all of that one.

In the previous studies I have seen, it is not necessarily a circumstance that you go well across all cell lines and I can investigate that and but you know I ask about and it is just cell lines that doesn’t respond..

Okay. Got it. So, in the final trial design, the four trial design, there will be 54 evaluable patients for the cohort of relapse refractory in AML patients and the venetoclax resistant patient, will the review of full cohorts perform after 19 evaluable patients.

Does that mean about 50% of 19 patients have to come from each cohort or it doesn’t really matter as long as the total reach 19?.

No, no. That is for each cohort..

That is for each cohort. Okay..

Yes..

So strictly for patients for each cohort..

Exactly those - if you go to the full trial, the idea is we want to make an interim assessment because think back when we first started this with LDAC combination, LDAC is like 7% to 13% response complete remission. And when we did that six patient safety study to dose level, if you recall, the start of the Phase II.

We had a 50% response a CR response and then two more out of the six were partials that had over 50% bone marrow blast reduction.

And so the point is, with if you get that kind of early on indication, we wouldn’t want to waste our time going through all 54, that would give us enough of a statistical just thinking about amount of improvement versus the baseline CR rate, to have a P value strong enough to go to the FDA to make the case to switch to an accelerated trial.

So in every one of those cohorts, we want to do that assessment and get to the endpoint as quickly as we can. Likewise, and I mentioned it with the untreated AML that frontline - baseline is 60%. The others are 20%. So when you are 60%, to get the kind of statistical power that you need, you would have to go a greater number of patients.

But we are still going to look at 19 and see what we look like. And if it look favorable, we will go to 38 to get the power we need. And if it is a meaningful increase, we will go to the FDA, but we would need 38 on that one, just because again, we are talking about the response relative to a 60% baseline.

So presumably, you will need more for that power..

Yes, so just to confirm the total number of patients that will be enrolled for all three cohorts, if fully enrolled would be 206 patients?.

Whatever, 54, 54 and 98 yes.\.

98,yes, yes. Okay. Got it. Okay, so this trial design really presents three pathways to potential approval.

Right?.

Yes, it does..

Okay, got it. And my last question is on the financial side. So, the second quarter operating expenses is meaningfully lower than the first quarter.

But now since you have started dosing patients in this Phase II trial with three cohorts, should we expect the operating expenses to go higher starting from the third quarter?.

A large part of our operating expenses were on putting the infrastructure in place, think about going from six to eight, and 10. Those are all those clinical documents that we have to facilitate our CRO - facilitate review, negotiation and sign-off with all of those sites. So, we have a quite a bit of CRO expense in that respect.

The other thing is, as I alluded to with Laura, we have got to build our pipeline on the drug. And with us again, when we finish our GMP material, there is no market for that material, so we don’t get to stick an inventory we put it in prepaid. And then once we get it released, it drops to the new expense line.

So, a lot of the expenses that we had in the first and second quarter, and then as a result of gearing up for this, I would say, when you have your drug in place, and you have your clinical sites set up, it is the patient cost. Yes, that is something that you concerning you consider the drug that is already been expensive.

And so, the incremental effects would be, the cost to the patient costs that you have with a site when they, enroll a patient, and dose and whatnot and see are continuing CRO expense for continuing to monitor and work, but it is not what you think would be a step-up from the plaque, the plaque row or level of expenses established in the first and second quarter because a lot of that start-up won’t be there.

So, I think in the cash concerned area, which is a driver of our earnings, we have averaged three million per quarter, and we should be in there three to 3.5. Maybe if we have another build drug expense quarter as high as three to 3.5, I think is what I think we would be looking at..

Okay. Got it. Thank you..

You are welcome..

I’m showing no further questions at this time. I would now like to turn the conference back to Mr. Peter Nielson..

Thank you again everyone for joining us and for your continued support on Bio-Path. Have a great day..

Ladies and gentlemen, this does conclude today’s conference call. Thank you for your participation. You may now disconnect..