Susan Pietropaolo - SMP Communications William Rice - Chairman, President, and CEO Gregory Chow - SVP and CFO

Jotin Marango - ROTH Capital Joe Pantginis - HC Wainwright Mathew Bilger - Oppenheimer

Good morning ladies and gentlemen. My name is Catherine and I’ll be your conference operator today. I would like to welcome everyone to the Aptose Biosciences Conference Call for the Third Quarter Ended September 30, 2018. At this time all participants are in a listen-only mode. After the speakers remarks there will a question-and-answer session. [Operator Instructions]. Thank you. And as a reminder, this conference maybe recorded. I would now like to introduce Susan Pietropaolo. Please go ahead.

Thank you, Catherine. Good afternoon and welcome to the Aptose Biosciences conference call to discuss financial and operational results for the third quarter ended September 30, 2018. I am Susan Pietropaolo, Communications Representative for Aptose Biosciences. Joining me on the call today are Dr. William G. Rice, Chairman, President and CEO and Mr. Gregory Chow, Senior Vice President and Chief Financial 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, but 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 20-F at 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 quarter ended September 30, 2018. Those of you on the call already know that Aptose is developing two exciting hematology drugs, APTO-253 and CG-806. Mechanistically they are distinct from one and other, both have thus far demonstrated robust safety profiles, one of the characteristics that distinguishes them from many other hematology drugs on the market. Preclinical findings from both have been compelling and we now have reached important junctures in their development. We just recently announced that we have reinitiated the Phase 1b clinical trial with APTO-253 are small molecule MYC inhibitor. And first today I’ll bring up to-date on their product candidate in our clinical strategy. Next we’ll discuss our small molecule and FLT3 and BTK inhibitor CG-806 that is approaching R&D stage. We continue to uncover characteristics to this drug candidate that make it even more compelling and we’re being very disciplined in this development, to give the best possible chance for its success. We will also review a few business highlights for the quarter and following these updates Mr. Greg Chow will review our quarterly financials. Following the financial update we will then open the call for your questions. So first, I'm pleased to bring you up-to-date on APTO-253, which recently returned to the clinical setting with the new formulation following a hiatus due to manufacturing issue with the original formulation. For those of you who may be new to Aptose, APTO-253 or just 253 is all we’ll call it is the only known clinical stage molecule that have the potential to directly target the MYC oncogene and inhibits MYC expression. MYC dysregulation is a common driver in many malignancies including acute myeloid leukemia or AML, making it an attractive therapeutic target. However, other therapies directed at MYC are limited by severe toxicities, drug resistance, myelosuppression and the difficulty in target the MYC protein itself. Aptose researchers have reported the ability of 253 to induce apoptosis cell death in multiple blood cancer cell lines including AML, as well as in vitro synergy with various classes of conventional approved and investigational therapies for AML or myelodysplastic syndromes or MDS. We believe that 253 have the potential to benefit a large patient population across various therapeutic areas. In fact during our last call we’ve discussed data that revealed synthetic lethal interaction of 253 in cancer cells that are deficient in BRCA1 or BRCA2 function, causing these cells to be hypersensitive to 253, and suggesting potential solid tumor indications for 253. This is a compelling path for 253, but because MYC is well validated as a target in AML, an AML cells have exhibited particular sensitivity to 253. Our initial focus remains on AML. As you are aware we received allowance from the FDA to resume dosing of patients with 253 in the Phase 1b clinical trial in patients with relapsed refractory hematologic malignancies and we initiate its screening for appropriate patients to place on the trial. We overcame significant challenges to get to this point and we’re pleased to be back to the clinic setting and moving forward. The Phase 1b multicenter open-label dose escalation clinical trial of 253 is design to assess the safety, tolerability, pharmacokinetics and pharmacodynamic responses and establish the recommended Phase 2 dose and efficacy of 253 as a single agent. 253 will be administered once weekly over a 28-day cycle. The study is expected to enroll up to 20 patients with relapsed refractory AML or high-risk MDS. The study is designed to then transition to single-agent expansion cohorts in AML and MDS, followed by combination studies. The protocol requires only one patient at each of the two lowest dose levels, and we explained at several investor conferences during October that we are very carefully selecting patients for the first two dose levels. Relapsed refractory AML patients tend to be acutely sick and we seek to complete those two lower dose levels with a favorable tolerability profile and with only one patient per dose level. We hope this meticulous approach will vicious [ph] escalation to higher dose levels and may provide greater benefit to AML patients. For this reason a number of AML patients during the screening process were not enrolled in the trial because of their advanced disease. To clarify further if the dose limiting toxicity is observed in the patient on dose level 1 or dose level 2 then the cohort may require expansion from one patient to six patients, and that’s dramatically impact our timelines [ph] even more than upfront delays in selecting an appropriate patient that is less likely to experience a DLT. In addition, while the dosing schedule for the trial remains at 20, 40, 66 and 100 mgs per meter squared similar to the original clinical protocol. The new 253 formulation has been shown in preclinical testing to deliver three times the exposure level relative to the original formulation. And a lower dose levels could allow efficacy which of course remains to be proven. Up to 15 clinical centers are expected to participate in the Phase 1b trial and we currently have three clinical sites initiated and were actively screen patients for the study. We’ll continue to bring clinical sites online and expect four to five other sites to be initiated during November. And we still expect to fill the first two cohorts during 2018 and then expect to complete the dose escalation during 2019. We are pleased to be back to the clinical 253 and working with skilled clinical investigators and we look forward to reporting on our process. One final note regarding 253 and this highlights the importance of understanding the mechanism of action of the drug. Many B cell malignancies are reported to over express C-MYC, and to depend upon MYC for survival. Consequently, we found the B cell cancer cell lines as well as bone marrow samples from B cell malignancy patients such as CLL and AOL are surprisingly sensitive to 253, and we plan to for amending our IND to include such patients in our Phase I clinical trial. Now let me turn to CG-806, Aptose’s first-in-class pan-FLT3/pan-BTK multi-cluster kinase inhibitor. 806 is an oral agent for the treatment of patients with AML and certain B cell malignancies. As such 806 have the potential to address tremendous unmet needs in multibillion dollar market. 806 is also being developed in a manner designed to derisk the molecule and rapidly see clinical proof-of-concept in multiple hematologic malignancy indications. Our preclinical work with 806 demonstrated, one, its superior potency and breadth of activity on AML patient samples relative to other with FLT3 inhibitors; two, its superior ability to kill B cell malignancy patient samples relative to ibrutinib, the current standard of care, and three, a favorable safety profile with the ability to eliminate tumors in animal models. We and our scientific advisor are particular excited about 806 and believe it has the potential to serve as a transformational agent from multiple hematologic malignancies including AML, CLL and others. In our last call we reviewed much of the science that was presented earlier in the year at AACR and the European Hematology Association or EHA meetings highlighting the differentiation of 806 from ibrutinib and other BTK inhibitors. As we mentioned we considered covalent BTK inhibitors to reside in one bucket of agents. The various other non-covalent BTK inhibitors to reside in a second bucket of agents and then 806 to reside in a completely separate bucket, 806 is more than just a non-covalent BTK inhibitor. As it targets to wild type and mutant BTK driver kinases, as well as the operative rescue pathways represented by FLTE to AKT, mTOR, S6K pathway, the Histone 3, Ser10 or H3S28 pathway and the ERK MYC pathway. In simplified terms other drugs have -- may have the initial treatment effect on BTK driver pathways, but alterations in proteins or – excuse me, all the B cell receptor pathway or other rescue pathways emerging caused drug resistance, 806 inhibits the wild type and mutant forms of BTK as well as multiple rescue pathways, and this allows it to more effectively kill the cancer cells. During our [Indiscernible] presentation in October we presented results from a preclinical nearing study that demonstrate the ability of 806 to eliminate tumors and doses that generated no observed toxicity. All of these presentations are available on our website and all are subject to another review of all the existing data as exciting as we think they are. We’ll encourage you to take a look if you have an already. Suffice to say while these are preclinical studies the data continue to well-differentiated 806 from other BTK and FLT3 inhibitors, a safe and potent agent that inhibits all forms of BTK and all forms of FLT3 driver kinases, as well as other key rescue pathways would address tremendous unmet needs for AML patients and for B cell cancer patients for intoler, refractory are resistant to other inhibitors and we very much look forward to getting in to patients with 806. So let me bring up to-date on the status of 806 where we have some important developments. Our development plan for 806 following allowance of an IND is to begin treating immediately patients with B cell malignancies that are resistant refractory or intolerant to ibrutinib or other covalent or non-covalent BTK inhibitors. In parallel due to the favorable toxicity profile of 806 observed thus far the plan includes a rapid single ascending dose are set pharmacokinetic study and healthy volunteers in order to identify dose that would be expected to deliver a therapeutic exposure level of 806 in patients with AML, which is the sicker patient population and those with more chronic B-cell malignancies. This is an approach that was first suggested by the FDA after review of 806 is clean safety profile. Once that likely therapeutic dose is identified and healthy volunteers and if the favorable safety profile holds up Aptose plan is to present the data to the FDA and seek to move that therapeutic dose directly into AML patients. Importantly, without the need to dose patients with lower dose levels that are likely sub-therapeutic. A healthy volunteer set study will provide several benefits to Aptose. It provides faster recruitment of patients, rapid dose escalation and rapid collection of PK data using multiple doses of 806. It helps us to determine therapeutic dose, dose level sooner, it accelerates the collection of human safety data which is more complicated than sicker patients, and most importantly it enables Aptose to start doses -- start dosing AML patients have potentially a therapeutic dose level. On the other hand additional preclinical safety tests are required for any drug is taken into healthy volunteer, for as such studies that are not required before a drug is dosing cancer patients. The studies acquired for healthy volunteers include genotoxicity, mice, CNS, mice respiratory and dog cardiovascular safety studies and those cannot be performed properly until the GLP toxicology studies have been completed and an understanding of the dose-related tolerances and toxicities are defined. Now that we have completed the GLP toxicology studies and found 806 to be very well-tolerated, we made the decision to move the molecule through the healthy volunteer path to AML patients and to perform the additional safety studies. Let me emphasize, this strategy is feasible and preferred because 806 is so well-tolerated, it is not the result of any safety concerns from the GLP toxicology studies. So while the healthy volunteer study and some of the additional safety studies if requires have moved our R&D filing into early 2019. We concur with the approach first brought to us by the FDA. This includes starting the trial by taking 806 directly in the B-cell cancer patients and in parallel performing a healthy volunteer set study to identify a potential therapeutic dose for the acutely AML patients and then taking that potential therapeutic dose directly into AML patients. This approach spares the acutely ill AML patients from taking a sub-therapeutic dose, it significantly derisk 806 and allows us to potentially see proof-of-concept from the AML trial earlier even potentially leading to immediate responses in AML patients. And we are well underway in our IND preparation efforts. As a reminder in animal efficacy studies we demonstrated that once daily all dosing with 10 mgs per kg delivered strong anti-tumor activity. On GLP tox studies we performed twice daily dosing in an effort to draw toxicity. We have completed the standard GLP toxicology studies and expect to receive the formal report soon. Dosing of 300 mgs per kg twice daily in mice and 120 mgs per kg twice daily in dogs were well-tolerated and produced no demonstrable toxicities. The dosing limitation was literally the massive amount of drug being consumed and leading to a loss of appetite or haemolysis [ph] in the animal species. Importantly, these well-tolerated doses appear to be considerably above the therapeutic doses and we are encouraged by the therapeutic windows that we have seen thus far. Ultimately, we expect bone marrow suppression to become the dose limiting toxicity with higher dose levels. Also we now have completed additional CNS and respiratory safety studies in mice as well as the AIMS [ph] genotoxicity study and all these studies were clean. Currently we're conducting the cardiovascular safety study in dogs. Preliminary observations continue to confirm the favorable safety profile of the 806. We certainly are eager to collect all the data to demonstrate stability of our two dose strength capsules for the clinical supply to follow our IND and get this drug candidate into the clinic as soon as possible. So now let’s address ASH and the upcoming -- and upcoming KOL a bit. Our research partners will be presenting some additional 806 data at this year's ASH meeting. The American Society of Hematology's 60th annual meeting and this is being held December 1st to 4th this year in San Diego. On November 1, 2018 we announce that new preclinical data will be presented in two separate poster presentations at ASH. The OHSU, Knight Cancer Institute and Aptose will present data in one poster, and the team of the University of Texas, M.D. Anderson Cancer Center will present data in a separate poster. These presentations will highlight several key findings. First, in collaboration with M.D. Anderson, orally administered 806 demonstrated efficacy in a patient-derived xenograft or PDX study in which the bone marrow cells from a patient with AML having dual ITD, MDA35 mutation in FLT3 were implanted into a mice. The dual FLT3 mutant form of the AML represents a very difficult to treat population. And the PDX model suggests that 806 may be useful in treating such patients. Second, in collaboration with OHSU Knight Cancer Center studies of 806 in 124 samples are freshly [ph] oscillating bone marrow from CLL patients demonstrate that 806 exerted broader activity and greater self-held potency than ibrutinib. In addition, and in studies of 806 on AML patient bone marrow samples, we’ve recently identified a previously undiscovered sensitivity and a subpopulation of patients with a particular mutation and we plan to disclose that genetically to prime subpopulation at the ASH meeting. In that poster Aptose also plans to include high-level data from preclinical GLP toxicology studies that demonstrate poorly administered 806 as a well-tolerated molecule. Separately, on Monday of this week, November 5th, we announce that in December Dr. Brian Druker, who is the Chair of our Scientific Advisory Board has agreed to host our first ever KOL event and share his perspectives on the needs of hematologic malignancies, answer questions on how he believes 806 may best serve their needs. That KOL event will be held on 12th of December in New York and will also be webcast. As many of you know, Dr. Druker is best known for his role in developing Gleevec for patients with chronic myeloid leukemia or CML and he holds numerous investigators awards. We have often held up the quality about Aptose’s distinguished researchers and advisers and Dr. Druker is among us in a team. We’re very pleased to have such strong KOL and leaderships support and have Dr. Druker present and share us enthusiasm about 806 quickly. So please mark that AOL event on your calendar. Let me now quickly touch on a few additional news highlights from the quarter. In September, we had our patent state with the issue of the European patent for CG-806, the granted patent claims various compounds including the 806 compound, pharmaceutical compositions comprising the 806 compound and uses for the treatment of various diseases including cancer. The patent adds the previous issued 806 patent in the US and Japan and is expected to provide protection until the end of 2033. In addition this year 806 received a patent allowance in China and this represents an important market into the future for 806. We also welcomed Ms. Carol Ashe, Board of Directors. Ms. Ashe is an accomplished executive leader with more than 25 years experience in the pharmaceutical and Biotech Industry and she currently serves as Chief Business Officer for the New York Genome Center. We’re happy to be working with her. I will now turn the call over to our Chief Financial Officer, Mr. Greg Chow who will review results from the quarter.

Thank you, Bill and Good morning everyone. We ended the quarter with $15.6 million of cash, cash equivalents and investments compared to $18.5 million at June 30, 2018, subsequent to the September 30, 2018 we raise approximately $3.6 million from the eight At-The-Market facility with Cantor Fitzgerald, and a further 1.5 million to the common stock purchase agreement with Aspire Capital Today we have more than $19 million in cash and cash equivalents and investments which provide more than 12 months of cash run way. During the quarter we utilized approximately $1.5 of cash in our operating activities compared with $2.1 million for the third quarter in 2017. This increase in cash use was due to increased activity surrounding 253 and 806 during a recent quarter. Moving on to the income statement we had no revenues for the quarter. Research and development expenses were $3.6 million compared to $1.4 million for the same quarter in 2017. This increase is primarily due to increased 806 develop activities which include GLP animal tox studies in rodents and dogs as well as the GNP manufacture of API drug supply to be use in those GLP animal toxicity studies and the clinic, continuing development on improving GMP formulation of 806 and 253 and increase salaries related to increased headcount and clinical operations to prepared for the return of 253 to the clinic. G&A expenses for the quarter with $2 million compared to $1.3 million for the third quarter in 2017. This increase was primarily due to an increase in stock-based compensation and increases in administrative cost such as investor relations, technology, travel and office-based expansion supporting the growth in the company's operations. Finally, our net loss for the quarter was $5.5 million or $0.16 per share compared $2.6 million or $0.11 per share for the third quarter in 2017. I will now turn the call back over to Dr. Rice. Bill?

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

Thank you. [Operator Instructions] Our first question comes from Jotin Marango with ROTH Capital. Your line is open.

Good morning. Thank you for taking my questions. So, I think the dose titration in health is before going into AML is actually a really good idea that will probably save time. When it comes to the dosing in B-cell tumors which I understand would continue in parallel. By now we’ve seen a couple of companies that are dosing second gen BTK inhibitors in B-cell tumors, by second gen I mean reversible. So based on what we know from these -- about their assays and the preliminary clinical data, but also being aware of the time when you will enter this narrative in the clinic. What do you think is important to keep in mind as you contemplate positioning this study sort of is it a indication [ph] approach, is that good [ph] approach, a mutation specific approach sort of any thought on that? Thank you.

Good morning. Thanks for the questions. So it’s quite a bit to unpacking that question, but yes, we keep on eye on the other across the competitive molecules that are going through clinics especially these – the BTK inhibitors, CLL as well as other B-cell malignancies. So we positioned our compound as we mentioned as, it's in a completely different bucket than the covalent or the non-covalent BTK inhibitors. The covalent, we know that the covalent inhibitors, they lead to the mutations that give drug resistance and that's why that respond the next generation -- second-generation of BTK inhibitors that are non-covalent. Those – typically those molecules are going after the patients who have failed the covalent inhibitors, so – and they are viewing the biomarkers you talk about, first will BTK, CCL3 as various biomarkers and they’re watching for efficacy. We also see that it can be difficult to accrue the patients, but I think that is picked up. I think they’re beginning to see as they get into higher levels. They are beginning to see benefit, reductions in the other markers, possibly to [Indiscernible] and CCL3 and we actually hope they’re going to be showing benefit. But again we are hopeful that those molecules would do well, but we are positioning ours quite differently. We believe that we can go after the patient that have failed to covalent or the non-covalent BTK inhibitors because we inhibit not only all forms of BTK but also those other what we call the rescue pathways. And what we see is in the various cells you can take a broad at B cell malignancies cells and cell culture. You can treat them with these other drugs. And what you see is the emergence of these other pathways that rise up to rescue of the cells. And we’re able to hit enough of those pathways to kill the cells quite effectively. So we think we are completely different molecule. We’re able to go after. We believe all of the B-cell malignancies that are – well, I shouldn’t say, all the B-cell malignancies, but those patients who are relapsed to refractory to hit the covalent or the non-covalent inhibitors. We’re seeing great activity against all the different form of B-cell malignancies that we’ve looked at from patient [Indiscernible] except for the multiple myeloma. So that positions us well for variety of B-cell malignancies both the leukemia’s [Indiscernible]. Did that adequately answer your question or there are other particular aspects that you would like to hear?

That’s good. Maybe as an extension of that, I have two questions about those ASH abstract. So the first one which maybe then related to what we just spoke about. One of the abstract is a comparison of 806 and ibrutinib and you presented some data from this previously it may have asked or – so today I think or yesterday Beijing started dosing in a global Phase 3 down to ibrutinib, head to head versus the ibrutinib and CLL. So I’m curious if you have any comparative data between 806 and ibrutinib or if we are even able to compared them apples-to-apples based on biochemical assays to the extent of that is appropriate?

So we have direct data for we compared directly to ibrutinib but not the other covalent BTK inhibitors. So as you mentioned in the poster we presented some of the data earlier but it’s going to be a more robust presentation at ASH this year. But we show clear superiority in killing the cells of 806 over ibrutinib, it’s often hundred to a thousand times more potent indirectly killing those cells, again, because we had BTK as well as the other pathways. I suspect we would have the same comparison regarding the other covalent BTK inhibitors, but we don’t have any data on it at this time to directly address that.

Got it. And the other abstract which what I read it last week I thought it was very interesting. It shows this synergy in action between FLT3 and BTK in myeloid model. As I think back that initial slide that every AML puts up at ASH. BTK doesn't really feature prominently in that map of the gatekeeper and driver mutations in AML. There’s been a couple of presentations out there about BTK tackling and AML model, and we’ve seen only one study with ibrutinib and AML, but I heard [Indiscernible] which didn’t show anything. I think it was monotherapy and combo with low intensity treatment. What do you think went on there in that study sort of using it ibrutinib and not see much? You think it was a question of patient selection or maybe it should have been a combo or a biomarker selection. Do you have any reason on that?

Well, when we take a variety of AML cells every cell uses a different set of pathways. So we look at all the pathways that we can in all the different cell lines or in the patients samples. And in many of samples we do see that the BTK pathway is active. And we can clearly see that our drug is turning off the BTK on those cells. But if you only inhibit BTK and AML cells it doesn’t really effectively kill them. If you look at the concentrations in all those publications of ibrutinib, it was typically five to 10 micromolar levels that we’ll require to kill the AML cells, at that level that just general toxicity. We have to remember that ibrutinib inhibits the BTK down in the 2 to 3 nanomolar range, but if you’re not killing the cells to a five to 10 micromolar it just general toxicity. So I think BTK does can and does play a role in some AML cells, but just inhibiting BTK alone is insufficient to kill the cells and as you said, it will require a combination effect. And that’s why we think our drug work so well, it hits the FLT3 to BTK and the other pathways knocking multiple legs out from under the table.

Understood. Thank you very much. See you at ASH.

Okay. Thanks.

Thank you. Our next question comes from Joe Pantginis with HC Wainwright. Your line is open.

Hey, guys. Good morning. Wanted to ask a question if you could provide a little more color on 253 screening in the relapsed refractory AML population, you did mention obviously that there have been some screening failures because the patients were just too sick or too acute. So in the relapsed refractory group what's the optimal screening when if you will while still before you hit the 26 status?

Good morning, Joe. Thanks for coming on so early and ask me a question. So, yes, this one has been a challenge. The reason is again we only have to have one patient at each of the lower dose levels. And we want to make sure – we’re trying to do everything we can to get patients with a reasonable performance status on those two dose levels. Sssss ------ two dose levels. Those are potentially sub-therapeutic levels. We want to get one patient on and not have to expand out to a six patients. So, anytime you're screening for these AML patients, you set certain criteria into criteria. And what we've said is they have to have a two month life expectancy to get onto these levels. And that's not easy for these patients because when patients you have to remember, the relapsed refractory AML patients have felt effectively every other therapy out there. They are the most resistant patients to drug therapy. Their life expectancy is very short. And even from the time that they wash out from a prior clinical trial to the time they can get into our trial, very often these patients will die, they'll go into hospice and it's very difficult to find patients with a reasonable performance status. I'm much more comfortable putting those very ill patients on the higher dose levels because we think we'll see efficacy at those levels. But we're reluctant to put one of those on the very lowest dose levels because if we don’t get through that first cycle, the 28-day cycle and we have DLTs there, and we have to expand out to six patients. Then, that can dramatically extend our timeframe. And so, we're willing to take this delay upfront to try to get the best possible patients those dose levels. What's interesting, we've talked to a lot of other companies developing AML drugs over the years. And we all call that early part of the clinical trial, the volume of death for all of us, we're just sitting there treating patients sub-therapeutically, all we're getting is the toxicities associated with these very ill patients. You see the DLTs, you have to expand out to six and adjust your timeframe just gets extended so much. So, we think it's actually more ethical this pathway that we're taking, we think it's more expeditious and will help us to increase the dose levels earlier and faster. But it's painful sitting here and going through this. So, what's interesting is, we're only doing one patient at each of those dose levels in this study. And it's kind of same reason we're looking at not doing any sub-therapeutic dosing with 806 later. So, it's the same mentality, well-tolerated drugs, very few patients with these dose levels that are sub-therapeutic so that you can get into the therapeutic levels. So, that's our take on it and it's again it's very painful as we wait here, find some of these patients, but we literally have I think about three of these patients that were we are ready to put on the study and suddenly they didn’t show up, they went into hospice. That's how sick these patients are, we just have to be careful. Q - Joseph Pantginis Got it. Very helpful, Bill. Thank you. A - William Rice Thank you, Joe. We'll see you at last too, okay? Q - Joseph Pantginis Yes. A - William Rice Okay, thanks for coming on up. Operator [Operator Instructions] And now we have a question from Mathew Bilger with Oppenheimer. Your line is open. Q - Matthew Gross Hey guys, it's Matt B. Gross. A - William Rice B. Gross. Q - Matthew Gross That was, that's right. How are you guys doing? A - William Rice We're good. Q - Matthew Gross Great, thanks for taking my question. So Bill, maybe if you could just give us a little bit more detail on the dose escalation phase 306. So, in the healthy volunteer portion, how long do you have to wait before you can dose the next patient? And then just to clarify, in the parallel ongoing cohort and B-cell malignancies. Is that employing the more traditional three plus three dosing kind of style? And then also how long would you have to wait to move on to the next dosing cohort in the B-cell malignancy portion? A - Gregory Chow Okay. So, let's well, thanks for coming on, Matt Bilger, with the correct pronunciation there. We have the, there's also Joe Pantginis his name, it was a little bit big one. Okay, so to the trials. So again, what I'm going to say here is our best guess because we still have to present all this to the FDA in our R&D application. So, that's the caveat. But going into the B-cell malignancy patients. What we would propose is even at in those dose patients, just knew one patient this drug is so well tolerated. We would propose to do one patient at each of the lowest dose levels, at least two lower dose levels and then partly once you see a DLT, then go three by three after that. So, that will help us dose escalate quickly and it would also minimize the number of patients that are getting exposed to a potentially sub-therapeutic dose. Even though these are more chronically diseased patients and not necessarily dying day one like the AML patients, you still want to be ethical with these patients, you want to minimize the number of patients treated. So, that's what we will be proposing to the FDA. I'm not going to speak to our starting dose now that because we're still working through that. But we believe the dose level that we're going to be that we'll be starting at will be closing to the FDA, it's actually going to be a significant exposure. But again, we believe it's very safe. So, that's the B-cell malignancy patient population. Then in parallel, we want to do the healthy volunteer study. So, in a study like that and again I'm going to talk about what we're proposing to the FDA and then they have to agree with it. But typically in these single sitting doses studies that sad studies, you give you might take let's say six patients at the lowest dose level and you give one dose and then you follow the PK over a period of a week. You might take four patients on your drug and two patients on placebo and even in these healthy volunteers you need to do a placebo because if something happens you need to know is it due to your drug or is it due to the --. So, typically we would expect we would take about two weeks in total--.[Technical Difficulty] two dose levels. Those are potentially sub-therapeutic levels. We want to get one patient on and not have to expand out to a six patients. So, anytime you're screening for these AML patients, you set certain criteria into criteria. And what we've said is they have to have a two month life expectancy to get onto these levels. And that's not easy for these patients because when patients you have to remember, the relapsed refractory AML patients have felt effectively every other therapy out there. They are the most resistant patients to drug therapy. Their life expectancy is very short. And even from the time that they wash out from a prior clinical trial to the time they can get into our trial, very often these patients will die, they'll go into hospice and it's very difficult to find patients with a reasonable performance status. I'm much more comfortable putting those very ill patients on the higher dose levels because we think we'll see efficacy at those levels. But we're reluctant to put one of those on the very lowest dose levels because if we don’t get through that first cycle, the 28-day cycle and we have DLTs there, and we have to expand out to six patients. Then, that can dramatically extend our timeframe. And so, we're willing to take this delay upfront to try to get the best possible patients those dose levels. What's interesting, we've talked to a lot of other companies developing AML drugs over the years. And we all call that early part of the clinical trial, the volume of death for all of us, we're just sitting there treating patients sub-therapeutically, all we're getting is the toxicities associated with these very ill patients. You see the DLTs, you have to expand out to six and adjust your timeframe just gets extended so much. So, we think it's actually more ethical this pathway that we're taking, we think it's more expeditious and will help us to increase the dose levels earlier and faster. But it's painful sitting here and going through this. So, what's interesting is, we're only doing one patient at each of those dose levels in this study. And it's kind of same reason we're looking at not doing any sub-therapeutic dosing with 806 later. So, it's the same mentality, well-tolerated drugs, very few patients with these dose levels that are sub-therapeutic so that you can get into the therapeutic levels. So, that's our take on it and it's again it's very painful as we wait here, find some of these patients, but we literally have I think about three of these patients that were we are ready to put on the study and suddenly they didn’t show up, they went into hospice. That's how sick these patients are, we just have to be careful.

Got it. Very helpful, Bill. Thank you.

Thank you, Joe. We'll see you at last too, okay?

Yes.

Okay, thanks for coming on up.

[Operator Instructions] And now we have a question from Mathew Bilger with Oppenheimer. Your line is open.

Hey guys, it's Matt B. Gross.

B. Gross.

That was, that's right. How are you guys doing?

We're good.

Great, thanks for taking my question. So Bill, maybe if you could just give us a little bit more detail on the dose escalation phase 306. So, in the healthy volunteer portion, how long do you have to wait before you can dose the next patient? And then just to clarify, in the parallel ongoing cohort and B-cell malignancies. Is that employing the more traditional three plus three dosing kind of style? And then also how long would you have to wait to move on to the next dosing cohort in the B-cell malignancy portion?

Okay. So, let's well, thanks for coming on, Matt Bilger, with the correct pronunciation there. We have the, there's also Joe Pantginis his name, it was a little bit big one. Okay, so to the trials. So again, what I'm going to say here is our best guess because we still have to present all this to the FDA in our R&D application. So, that's the caveat. But going into the B-cell malignancy patients. What we would propose is even at in those dose patients, just knew one patient this drug is so well tolerated. We would propose to do one patient at each of the lowest dose levels, at least two lower dose levels and then partly once you see a DLT, then go three by three after that. So, that will help us dose escalate quickly and it would also minimize the number of patients that are getting exposed to a potentially sub-therapeutic dose. Even though these are more chronically diseased patients and not necessarily dying day one like the AML patients, you still want to be ethical with these patients, you want to minimize the number of patients treated. So, that's what we will be proposing to the FDA. I'm not going to speak to our starting dose now that because we're still working through that. But we believe the dose level that we're going to be that we'll be starting at will be closing to the FDA, it's actually going to be a significant exposure. But again, we believe it's very safe. So, that's the B-cell malignancy patient population. Then in parallel, we want to do the healthy volunteer study. So, in a study like that and again I'm going to talk about what we're proposing to the FDA and then they have to agree with it. But typically in these single sitting doses studies that sad studies, you give you might take let's say six patients at the lowest dose level and you give one dose and then you follow the PK over a period of a week. You might take four patients on your drug and two patients on placebo and even in these healthy volunteers you need to do a placebo because if something happens you need to know is it due to your drug or is it due to the --. So, typically we would expect we would take about two weeks in total--.[Technical Difficulty] But there’s a dependency on that ABL kinase once you get the BCR-ABL in those cells and CML. So again it comes down – it’s a same thing, it just the dependency you’re targeting the dependency.

Got it. Thanks so much for taking my questions and look forward to seeing you at ASH.

Well, one – I’m sorry, did I say, several weeks or several months for the dose levels. So as we go in the dose levels and healthy volunteer it’s a couple of weeks in between each dose level not months. But the full study would take several months.

Yes. You said it would be several weeks.

Okay. All right. I just want to be certain. Okay. Thanks. I want to make sure I didn’t miss speak on that. Okay. Thank you.

Thank you. And I’m showing no further questions at this time. I’d like to turn the call back to Dr. Rice for closing remarks.

All right. Well, thank you everyone for joining us this morning. I would like to thank our shareholders and analysts for your continued support of Aptose and also our employees for the hard work and innovation. We look forward to speaking to you again soon reporting on our progress and seeing many of you at ASH in just a couple of weeks. Please note our recent webcast and presentations can be found on our website at www.aptose.com. Thank you again. Have a great day everyone. Bye-bye.

Ladies and gentlemen thank you for participating in today's conference. This conclude the program. You may all disconnect. Everyone have a great day.