Greetings and welcome to the Panbela Therapeutics Second Quarter 2023 Earnings Call. [Operator Instructions] Please note this conference is being recorded. I will now turn the conference over to your host, James Carbonara, Investor Relations at Panbela. James, you may begin..

Thank you, operator. With me on the call are Jennifer Simpson, Chief Executive Officer; and Sue Horvath, Chief Financial Officer. Before I turn the call over to Dr. Simpson, please note that statements made on this call that are not historical facts maybe forward-looking statements.

Significant risks and uncertainties that could cause actual results to differ from those expressed or implied in the forward-looking statements are detailed in the company’s annual report on Form 10-K and supplemented by subsequently filed quarterly reports on Form 10-Q as well as in other reports that the company has filed with the SEC.

Any forward-looking statements made on this call are made only as of today’s date, and the company does not undertake any obligation to update or supplement any such statements to reflect subsequent developments. Now I would like to turn the call over to Jennifer Simpson, CEO of Panbela. Jennifer, please proceed..

Thank you, James, and thank you, everyone, for joining. I will begin the call with a review of our clinical development program, recent accomplishments and upcoming milestones, Sue will then follow with a review of the financial results, and then we will open it up for Q&A.

Starting with our Phase 3 program, I’d like to begin with our ASPIRE global clinical trial in the first-line treatment of metastatic pancreatic cancer.

ASPIRE is a global randomized, double-blind, placebo-controlled clinical trial to evaluate ivospemin, or SBP-101, in combination with gemcitabine and nab-paclitaxel in patients with untreated metastatic pancreatic ductal adenocarcinoma. Last month, we opened enrollment in the UK and Germany.

We now have all planned countries in the ASPIRE trial opened and actively enrolling. Also in July, the Independent Data Safety Monitoring Board, or DSMB, for the ASPIRE trial completed its pre-specified review of safety data for treated patients in the trial. The DSMB has recommended that the study continue without modification.

Having all countries opened and enrolling and DSMB approval to proceed is highly encouraging as we continue to advance the trial. Interim data is expected as soon as early 2024. Turning to familial adenomatous polyposis, or FAP.

In April, we regained the North American rights to develop and commercialize Flynpovi, which is the combination of eflornithine and sulindac in patients with FAP. This opportunity surfaced as a result of the termination of a licensing agreement between our subsidiary, Cancer Prevention Pharmaceuticals, or CPP and One-Two Therapeutics Assets Limited.

Panbela has now taken a lead on designing the global trial protocol and presenting it to the Federal Drug Administration, or FDA, and the European Medicines Agency, or EMA, for agreement on the registration pathway.

Panbela is committed to working collaboratively with the FDA, EMA and the FAP Community to advance this program and to ultimately provide a new treatment option for FAP patients.

Once agreement is achieved on a global registration program from the FDA and EMA, we plan to advance this program while maintaining our current cash burn and we’ll evaluate opportunities to maximize the value of this asset.

Moving to the PACES trial, our Phase 3 double-blind, placebo-controlled trial of Flynpovi to prevent recurrence of high-risk adenomas and second primary colorectal cancers in patients with Stage 0 to 3 colorectal cancer. The PACES trial is funded by the NCI in collaboration with the Southwest Oncology Group, also known as SWOG.

The trial is designed to evaluate the combination of eflornithine and sulindac and reducing a 3-year event rate of adenomas and second primary colorectal cancers in patients previously treated for Stages 0 through 3 colon or rectal cancer. In June, the trial passed a single planned futility analysis and will continue. Moving to Phase 2 studies.

In July, we announced we would receive a total of up to $9.5 million in nondilutive funding for a divestiture of assets within the eflornithine pediatric neuroblastoma program to US WorldMeds. We look forward to helping US WorldMeds with the ongoing FDA review of a new drug acquisition.

Panbela received an initial upfront payment of $400,000 and is entitled to future payments upon US WorldMeds successful completion of milestones related to eflornithine’s clinical development, regulatory approval and commercial sales.

This agreement further expands our portfolio of partner-funded programs and has the potential to generate considerable development milestone payments. We welcome US WorldMeds to our portfolio of partners who continue the development of our product candidates.

Continuing with Phase 2 studies, we are excited to have had the first patient enrolled in the Phase 2 trial for CPP-1X led by Indiana University School of Medicine and funded by the Juvenile Diabetes Research Foundation, or JDRF, the leading global organization advancing life-changing breakthroughs for Type 1 diabetes.

This trial was advanced based on the preclinical and Phase 1 data. Two posters were presented highlighting the results for CPP-1X, also known as DFMO or eflornithine, in recent onset Type 1 diabetes at the Endocrine Society Meeting in June of this year and the Immunology of Diabetes Society Meeting in May of this year.

The work reflects the company’s ongoing collaboration with Indiana University School of Medicine. The research is part of a multi-site clinical trial led by Indiana University School of Medicine and supported by funding from JDRF.

These preclinical studies examine the role of ornithine decarboxylase, or ODC, on beta cell stress that occurs in Type 1 diabetes. Results show that stressed human islet cells treated with CPP-1X had alterations in several pathways such as antigen presentation and reactive oxygen species.

Together with data from recent onset Type 1 diabetes patients treated with CPP-1X in the multi-site randomized, placebo-controlled Phase 1 trial these results suggest that inhibition of ODC by CPP-1X may preserve beta cell function in response to stress.

Furthermore, these results expand on the previously presented work identifying potential mechanisms for CPP-1X and its potential role in the clinical management of recent onset Type 1 diabetes.

We are excited to support the recently initiated IU and JDRF funded Phase 2 trial in recent onset Type 1 diabetes and the goal of developing effective novel therapies for patients with unmet medical needs.

Results from these studies suggest that CPP-1X is a safe oral treatment option that may improve beta cell function and/or survival in recent onset Type 1 diabetes. In Phase 1 development, we have three programs that we will be starting.

First, in May, we entered into a clinical trial agreement with Moffitt Cancer Center for a Phase 1/2 program in the STK11 mutant non-small cell lung cancer patients. The initial goal of the Phase 1 trial will be to ascertain the maximum tolerated dose of eflornithine while evaluating efficacy and then moving into a Phase 2 efficacy trial.

We anticipate data from the Phase 1 trial by the end of this year was a look to start the Phase 2 trial at the end of the year or early 2024. Our second Phase 1 program, which is scheduled to begin this year, will focus on the evaluation of ivospemin in the platinum-resistant ovarian cancer population.

In April, we presented a poster titled Evaluating the Efficacy of spermine analogue ivospemin, SBP-101 in combination with chemotherapy in ovarian cancer at the American Association for Clinical Research, or AACR meeting.

The poster highlights the efficacy of SBP-101 in combination with the standard of care chemotherapy agents used to treat platinum-resistant ovarian cancer. Future studies will be designed to evaluate the effects of SBP-101 in combination with other metabolism modulators as well as with immune modulators.

The results suggest that SBP-101 in combinations with doxorubicin may have a role in the clinical management of ovarian cancer, in particular, the platinum-resistant population where few options exist.

These studies are the basis for moving into a clinical trial program in ovarian cancer with the goal of developing effective novel therapeutics in combination with standard of care for patients with unmet medical needs. The work reflects the company’s ongoing collaboration with Johns Hopkins University School of Medicine.

To that end, also in April, we announced a new research agreement with the Johns Hopkins University School of Medicine.

The collaboration is intended to expand the development of Panbela’s investigative agent, ivospemin and eflornithine, including activity in models of ovarian and other cancer types, further evaluations into mechanism of action and potential combination of ivospemin with eflornithine and standard of care agents.

Furthering the preclinical research, we announced in June that we entered into a sponsored research agreement with The University of Texas MD Anderson Cancer Center for the evaluation of polyamine metabolic inhibitor therapies in combination with CAR-T cell therapies in preclinical models.

The initial goal of these studies will be to ascertain if eflornithine and/or ivospemin treatment will augment CAR-T-mediated cytotoxicity against CD19-positive large B-cell lymphoma cell lines.

Recently, a metabolite panel primarily consisting of polyamines was identified as predictive of poor response to anti-CD19 CAR-T cell therapy in relapsed/refractory large B-cell lymphoma. Additionally, the polyamine uptake transport system is upregulated in large B-cell lymphoma and multiple myeloma.

Together, this suggests the potential for a polyamine-targeted therapy in combination with CAR-T therapies. Polyamine modulation of immune system is an important focus for Panbela with our first clinical proof of concept of polyamine therapy in combination with a checkpoint inhibitor for patients with STK11 mutant non-small cell lung cancer.

We are excited for this research collaboration to now evaluate the potential benefit of polyamine in immune modulation for hematologic malignancy.

Last, we are continuing to work with the key opinion leaders to finalize the neoadjuvant pancreatic sensor investigator initiative protocol and obtain the necessary institutional approval to open this trial in the second half of this year.

To recap our planned milestones, as we continue to execute our development programs, we anticipate the opening of a neoadjuvant trial and the ovarian cancer trial by year-end; Phase 1 non-small cell lung cancer data in the second half of this year, which will inform the Phase 2 portion of the non-small lung cancer trial, which we hope to have opened by year-end or early 2024.

FAP on track to submit and receive feedback from FDA and EMA in the second half of this year to obtain global harmonization for a registration protocol; data on our polyamine metabolic inhibitors in combination with CAR-T therapy in preclinical lymphoma and multiple myeloma models; and finally, the interim analysis of the ASPIRE trial in early 2024.

In summary, we have made tremendous progress in Q2 and year-to-date. We are excited to build stockholder value as we move forward for the remainder of this year. I will now turn it over to Sue..

Thank you, Jennifer. General and administrative expenses were $1.6 million in the second quarter of 2023 compared to $1.3 million in the second quarter of 2022. This increase is primarily related to increased professional services and annual meeting costs.

Research and development expenses were $4.2 million in the second quarter of 2023 compared to $20 million in the second quarter of 2022. The decrease is due primarily to a $17.7 million write-off of in-process research development, or IP R&D, in the second quarter of 2022 related to the CPP acquisition.

Excluding this one-time write-off of IP R&D, R&D costs increased by $1.9 million, due to the expected increase in spending on the ASPIRE clinical trial. On June 1, 2023, we effected a reverse stock split at a ratio of 1-for-30 shares of the company’s common stock.

All share and per share amounts of our common stock presented here and in our report 10-Q have been retroactively adjusted to reflect the reverse split. Net loss in the second quarter of 2023 was $5.8 million or $7.95 per diluted share compared to a net loss of $22.1 million or $1,843.68 per diluted share in the second quarter of 2022.

Total cash was approximately $7.2 million as of June 30, 2023. Total current assets were $10.8 million and current liabilities were $10.6 million as of the end of the quarter. On June 30, 2023, total non-current assets consisting primarily of cash deposits held by our contract research organization was $8.7 million.

During the quarter, we also completed a public offering for gross proceeds of approximately $8.5 million. As a result of the CPP acquisition in Q2 of 2022, we added debt and accrued interest to our balance sheet. During the quarter ended June 30, 2023, no debt or interest payments were made.

The principal balance remaining on the note is $5.2 million, and there is $100,000 of accrued and unpaid interest on the balance sheet.

Looking to the cap table, as of June 30, 2023, we had approximately 2.6 million common shares outstanding and including shares reserved for options and warrants, we were at a total of approximately 7.5 million shares.

The shares reserved number includes all outstanding equity awards, including stock options, which were held primarily by insiders and all warrants to purchase common stock.

Due to the exercise of pre-funded warrants and the alternative cashless exchange of warrants subsequent to June 30th, common shares outstanding today total approximately 3 million shares. Our cash used in operations for the six months ended June 30, 2023, totaled approximately $15.5 million.

The quarterly burn rate for Q2 was approximately $5.7 million.

Cash used in operations for the six months ended June included approximately $3.1 million in prepayments necessary to secure supply of standard of care chemotherapy agents for the ASPIRE trial as well as payments made to increase the deposits held by our CRO for future clinical trial costs.

We anticipate that the ongoing cash used in operations will be approximately $5.5 million per quarter. However, additional cash may be required to secure standard of care chemotherapy and fund new deposits held by our CRO. And therefore, we are projecting that the current cash on hand will take us through the end of Q3 2023.

We will continue to focus our cash on those items in our plans, which will drive value for our stockholders, such as the ASPIRE clinical trial. Operator, can you please open the phone lines now for Q&A and poll for questions..

Certainly, at this time we will be conducting a question-and-answer session. [Operator Instructions] And your first question today is coming from Jonathan Aschoff from ROTH MKM. Jonathan, your line is live..

Thank you. Good afternoon Jennifer and Sue. I was curious, I don’t know if you covered this, just been juggling three calls single handily. Did you – what do you think you will do with Flynpovi with respect to maybe handing it to somebody else or doing it internally? Maybe you covered that, I am not sure..

Well, certainly. First of all, hello Jonathan, how are you? And you have been juggling calls. For Flynpovi, for us, as we have maintained, we will advance the program without changing our cash burn.

So probably, the first and most important step since we have the expertise in-house is to work with the FDA and EMA to have agreement on a global registration protocol.

And again, if you remember, Flynpovi had been in a Phase 3 registration program prior where it showed in an A priority analysis or post-hoc analysis actually – it was post-hoc analysis. It showed a significant benefit to the patients in the lower GI space.

So, we are taking this information back to the FDA and EMA to get the agreement on our global protocol. And we feel at that point, it will be in a really good place to secure a partner or path forward in terms of funding that won’t impact our cash burn. But we are very excited to be moving this program forward.

And as I have said, we do have the expertise in-house, so I think this is something we are pretty excited about..

Okay. And did you give something in your prepared remarks about the timing of a few items, my next question is the timing for a public dissemination of both the STK11 data and the JDRF funded trial? I guess that is….

Yes, certainly. So, the STK11 trial, we started the CTA signed, and so we are working with Moffitt in terms of enrollment for the Phase 1 portion, which will occur first. We – at this point, we are still anticipating data in the Phase 1 portion by year-end, which obviously would inform the Phase 2 portion starting either year-end or early 2024.

So, that will be something we will certainly work with them in terms of a way to highlight the data, assuming we move into that Phase 2 portion. For JDRF, that Phase 2 trial that – or the Indiana University and JDRF funded Phase 2 trial has just started. But I do think it’s going to be some time before we have data from that Phase 2 trial..

Okay. And I believe I heard Sue correctly.

You said cash through three quarters – through this quarter or comfortably into the fourth quarter?.

It’s through this, the end of this quarter..

Okay. Thank you very much. Thank you..

Certainly, thank you..

[Operator Instructions] Next question is coming from Joe Pantginis from H.C. Wainwright. Joe, your line is live..

Hi. This is Josh on for Joe. Thank you for the update.

I was just wondering in terms of the ASPIRE trial, so now that you have all the sites opened, what could we expect in terms of enrollment, when that may be completed and potentially the number of patients that are expected?.

Certainly, hi Josh, how are you?.

Good.

How are you?.

Good. Thank you. So, we anticipate a total enrollment of approximately 600 patients. And we believe that the enrollment will take in total, roughly 36 months. So, we – the enrollment, I will say, has been quite robust. So, we have been very pleased. And this puts us on track for the interim analysis as early as the early portion of 2024.

And so I think that that’s really the first and most important milestone really from an efficacy standpoint, and obviously, we are very pleased to pass the first DSMB pre-specified analysis as well..

Perfect. Thank you so much..

Thank you very much..

Thank you. And there were no other questions in the Q&A queue at this time. That does conclude today’s call. Ladies and gentlemen, thank you for your participation. You may disconnect your lines at this time..