Good afternoon. My name is Jimmy and I will be your conference operator today. I would like to welcome everyone to the Aptose Biosciences Conference Call for the First Quarter Ended March 31st, 2020. At this time, all participants are in listen-only mode. After the speakers' remarks, there will be a question-and-answer session. [Operator Instructions] Thank you. As a reminder, this conference call may be recorded. I would now like to introduce Ms. Susan Pietropaolo. Please, go ahead.

Thank you, Jimmy. Good afternoon and welcome to Aptose Biosciences conference call to discuss financial and operational results for the first quarter ended March 31st, 2020. I'm Susan Pietropaolo, a communications representative for Aptose Biosciences. Joining me on the call today are Dr. William G. Rice, Chairman, President and CEO; Mr. Gregory Chow, Executive Vice President and Chief Financial Officer; Dr. Jotin Marango, Senior Vice President, Chief Business Officer; and Dr. Rafael Bejar, Senior Vice President, Chief Medical Officer. Before we proceed, I would like to remind everyone that certain statements 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 10-K and SEC and SEDAR filings. All forward-looking statements made during this call speak only as of the date they are made. Aptose undertakes no obligation to revise or update these 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 first quarter ended March 31st, 2020. Although our prior conference call was not even two months ago, much has changed in our world since then. Before I update you on Aptose and put potential impact on COVID-19 could have on our business, if any, I'd like to express our heartfelt thanks to all of our healthcare workers, our compassion to those who are infected, and our hope that all of you are safe and healthy. We are fortunate that Aptose is not experiencing the full force of headwinds that many other biotech companies are facing. Where several have halted or postponed clinical trials and others have experienced significant enrollment issues, the situation is unique to each company and to each molecule or treatment. Aptose as you know, is developing CG-806 and APTO-253 to address unmet needs in hematologic cancers. Because patients with hematologic cancers tend to be quite ill, treatment of these patients is not elected. Consequently, our Phase I clinical trials are continuing to enroll, despite recent events. An important consideration for clinical investigators and prospective patients is that to-date, neither CG-806 nor APTO-253 has been myelosuppressive. And importantly during this pandemic, neither has induced immunosuppression. Many cancer therapies both approved and under development can cause immunosuppression, potentially elevating risk for patients in general, but even more so during this healthcare crisis. Now, let's first consider the potential impact of COVID-19 on CG-806 or just 806, as I will call it. We have addressed and continue to address challenges that could cause disruption. We will call these crosswinds if you will, but thus far, we have experienced no material delays in our ongoing B-cell malignancy trial. Our team proactively addressed these new challenges swiftly and appropriately, implementing safeguards and procedures to ensure the safety of our patients, clinicians, and employees as the top priority and accommodate the potential challenges due to COVID-19. With 806, we're experiencing more crosswinds rather than headwinds and that relates to the properties of 806. For example, 806 is orally administered, and we can ship bottles of capsules directly to the patients, thereby reducing the need for visits to clinical sites. We also had enabled remote monitoring, which again reduces patients' visits. Patients each receive an iPad, which allows them to upload data and observations in real-time and also reduces the potential risk of exposure to COVID-19. This greatly reduces hospital or clinical site resources and the site are appreciative. We also can reduce the number of site visits by not requiring all of the typical once-a-week blood draws, and by relying on local labs for additional safety monitoring. We are also in constant contact with our drug manufacturers to assess and proactively avoid potential supply chain disruptions. Thus far, we have not experienced any such disruptions in our manufacturing of drugs, and drug product have actually accelerated. One key adaptation is the fact that we now are placing greater focus on enrolling patients from specialty regional cancer centers, rather than focusing on the large hospitals and academic institution. This is because many of the large academic sites have emergency rooms and infectious disease units, treating COVID-19 patients and face challenges to safely enroll patients in clinical trials. In contrast, most of the regional sites are not treated overnight COVID-19 patients, they have both the bandwidth to enroll and to lower risk of infection to cancer patients coming into their clinics. Such an adaptation represents a rapid pivot that has served us well and based on our anticipated enrollment rate, we continue on track. Regarding an update on 806 development, this is a distinct clinical asset compared to most other therapies that are commercialized or under development. Many of you have heard this before, but for those of you who haven't, 806 is much more than a typical FLT3 or BTK inhibitor, as it not only inhibits wall type and mutant forms of BTK and FLT3, it potently and simultaneously suppresses multiple oncogenic signaling pathways, upon which cancer cells rely for survival and drug resistance. This singular compound targets the primary drivers of B-cell malignancy and acute myeloid leukemia or AML, including BTK and FLT3, yet with a precision that avoids known targets that are often associated with toxicity. It is this unparalleled selectivity profile that sets 806 apart from other hematology drugs on the market or in development, and what is contributing to much of the excitement surrounding the compound. Now, let's focus on our Phase I study of 806, the treatment of patients with B-cell cancers, including CLL and non-Hodgkin's Lymphomas, or just NHL and today I'll speak about dose levels one through four that involve the administration of 150, 300, 450, and 600 milligrams BID respectively. Since our last call, we successfully completed the third dose level with 450 milligrams. And on March 27th, our Cohort Safety Review Committee unanimously supported escalation to the fourth those levels with 600 milligrams. Also we are pleased that the first patient dosed on this trial who began at a dose level one preceding 150 milligrams has completed 10 cycles at that dose level and now has been dose escalated to dose level three and receiving 450 milligrams per our protocol, and that patient is performing well. Following completion of dose level three, we quickly commenced patient treatment on dose level four with 600 milligrams. To-date even at these higher doses, 806 continues to be well-tolerated. Now, let's discuss a few details of the patient's already enrolled in the study cohorts to-date. The very first patient [Indiscernible] is on study at 150 milligrams, this patient has CLL with an FLL phenotype. At that dose level, we achieved a steady-state exposure level in the plasma of approximately 0.1 micromolar. This steady-state represents the minimum level observed in the plasma over time. Importantly, we collected plasma from that patient and tested it in a plasma inhibitory activity, or PIA assay. With this PIA assay, we first collect the plasma from the patients, return into our labs, and place it on reporter cells. After a few hours, we use western blotting to determine if there is sufficient drug in the plasma to inhibit the phosphorylation of key biomarkers, including BTK, ERK, PDGFR-alpha, SYK, and that is spelled S-Y-K. We observed that wants to patient achieve steady-state plasma levels of 806, the plasma inhibited all of these pharmacodynamic markers in the PIA assay. And that's with dose level one. At the second dose level, we placed one CLL patient on study. With that CLL patient, we observed a rapid and dramatic lymphocytosis indicated that a pharmacologically-active exposure of 806 had been achieved at the cellular effect is classically described as a response to the inhibition of BTK. Concurrently, we observed 100% inhibition of phosphorylation of BTK in the PBMCs from a patient's bloodstream. Moreover, steady-state levels of 806 approach the one micromolar range. And the PIA assay revealed that levels of 806 in the plasma were capable of fully inhibiting the phosphorylation of BTK, SYK, ERK, and PDGFR-alpha in the reporter cells. After evaluating the data from dose level two with 300 milligrams, we moved to dose level three, with 450 milligrams, at which we enrolled and completed the 28-day cycle, with two follicular lymphoma patients and one SLL patient. As a result, we completed that dose level and collected the necessary data quickly and safely. Although, we will not discuss the data quantitatively, as those data are now embargoed for presentation at the EHA Conference in June, we can say that the drug was well-tolerated. The steady-state PK levels were well-behaved and in the circa one micromolar range and that the level of 806 and the plasma inhibited the expected PD markers in the PIA assay. After successful completion of the 28-day cycle with dose three patients at the third dose level with 450 milligrams, we then escalated to dose level four, on which the patients would receive 600 milligrams. At this time we continue to dose in this cohort and 806 continues to be well-tolerated. While we are quite pleased with the findings thus far with dose levels three and four, we once again will remind you that we are unable to share embargoed findings from these dose levels until the EHA Conference. Provided we successfully complete 28 dosing of three patients at that 600 milligram dose level, we plan to dose escalate with three patients at 750 milligrams and then 900 milligrams to ultimately determine the recommended Phase II dose for patients with B-cell malignancies. Depending on the clinical activity in specific subgroups in this dose escalation phase, we may enroll up to 100 patients across four expansion studies. Our Chief Medical Officer, Dr. Rafael Bejar recently presented a summary of data from patients on the first two dose levels during the AACR Virtual Forum. Note that the press release and corresponding slides are available on our website. The conference format was a bit amended from live to virtual and we were unable to deliver the live oral presentation that we originally had been granted. So, we utilize the five-minute virtual opportunity to summarize data from the first two cohorts for medical professionals and to indicate that we continue to dose escalate successfully. As I noted earlier, we look forward to presenting a more complete picture of the pharmacokinetic and pharmacodynamic profile of the higher dose levels at the European Hematology Association, also known as EHA Meeting in June, which will also be a virtual meeting and at ASH later in the year. As of today, we have 21 U.S. sites open for screening and enrolling patients for the study with additional sites scheduled to come on board. For more specific information on the B-cell malignancy trial and the clinical sites enrolling patients, please visit clinicaltrials.gov. Now, let's move on to the application of 806 patients with AML. We've spoken before about our rationale for the AML study and the KOL support behind it. So, I'll update you briefly on the status of this planned study. 806 is the only BTK inhibitor that also person possesses strong FLT3 inhibitory activity, giving a broad therapeutic potential across the hematology spectrum, including both lymphoid and myeloid malignancies. Based on our extensive preclinical work, it has always been our intent to treat AML patients with 806 in addition to the B-cell malignancies. As you may recall, back in 2017, we had applied for and were granted orphan drug designation for 806 by the FDA for the treatment of patients with AML. At first glance, AML appears to be a competitive market, with recently approved drugs and others on the horizon. However, none of these approved agents offers cures in and among themselves. All current targeted therapies may initially show some clinical benefit. Eventually, most responders relapse and become refractory to such treatments. We, along with a growing number of investigators and industry experts continue to believe that 806 is clearly distinct from other agents on the market and in development, and that has the potential to serve as a transformational agent for multiple immunologic cancers, including AML, CLL, and others. So far, the big question has been, what dose level will we recommend for the starting dose with AML patients? To answer this, we must consider the data in their totality that we have gleaned from our clinical study in patients with B-cell malignancies. We must choose a dose that first is safe and well-tolerated in humans, that has achieved plasma exposure levels, that we believe can inhibit phospho FLT3, and other key condensates operative in AML, that can kill AML cells and that correlates with potent efficacy and animal models of AML. As I mentioned earlier, all dose levels thus far, up to 600 milligrams have been safe and well-tolerated. So that takes care of the safety consideration. Also, already, we have observed what I will call circa one micromolar steady-state plasma levels at the 300 and 450 milligram dose levels. That plasma exposure level inhibits phospho FLT3 three, and other relevant targets in the PIA assay and that plasma exposure level is in the same steady-state exposure range that lead to AML cures in mice and without observed toxicities. Overall, based on safety, pharmacokinetic, and pharmacodynamic data from patients in the ongoing Phase Ia/b study in patients with B-cell malignancies, we now have identified what we believe can serve as a therapeutic starting dose for the treatment of AML patients. We're in the final stages of preparing the new IND for submission to the FDA [Indiscernible] to initiate a clinical study of 806 and relapsed and refractory AML patients. I want to point out that this is not the same as submitting an IND for a new agent that has never been in humans. This new IND for 806 will consolidate all preclinical data, as well as the safety, tolerability, PK/PD and pharmacologic activity findings gathered to-date in patients with B-cell malignancies. This this requires more time to prepare than they first in human IND. But we are heartened by the data and we look forward to submission of the findings to the FDA and we hope to move into AML patients as soon as possible. Finally, our clinical team has identified and is working closely with top tier institutional sites and regional cancer treatment sites to initiate the new AML trial. All of the features that are mentioned about 806 before that it is oral, that is well-tolerated, and that we can remotely monitor patients make us optimistic that the FDA will allow our IND so that we may begin dosing AML patients at what we believe may be a therapeutic dose. To wrap-up on 806, with some additional precautionary measures because of COVID-19 arena, we know we have already made significant progress in 2020. We look forward to recording on our progress on the ongoing Phase Ia/b study in CLL and B-cell malignancies as well as the perspective AML trial throughout the remainder of this year. And now on to APTO-253 or just 253, our second clinical candidate and our first-in-class MYC inhibitor currently in a Phase Ia/b trial for patients with AML and MDS. As many of you know the MYC oncogene is a major driver of cancer cell proliferation. In fact, its expression is estimated to be elevated up to 70% of human cancers including AML and MDS as well as solid tumors. Per our Phase I clinical protocol, 253 is being administered once weekly, over a 28-day cycle at ascending doses in patients with relapsed or refractory AML or high-risk MDS until a maximum tolerated dose is reached. The study is designed to then transition as appropriate to single agent expansion cohorts in AML and MDS. We have completed the 28 dosing -- the 28-day dosing in the first three cohorts, the last being three patients on a 66 mgs per meter square dose, as well as one patient thus far in the fourth dosing cohort of 100 mgs per meter square. 253 continues to be well-tolerated with no model suppression and we continue to observe MYC inhibition at all dose levels today. In this Phase Ia/b trial, we continue to learn a great deal about the molecule. We're encouraged that we continue to observe MYC inhibition, historically difficult target to modify clinical. The trial continues to be open for enrollment and we continued to learn what to expect clinically about 253 and are making decisions on how best to move forward with the molecule. We may consider dosing more than once a week. We are also pursuing preclinical studies and other cancer indications, including solid tumors. In addition, we are working on an oral formulation of the drug. Because 253 is administered to patients intravenously, which requires the need for hospital or clinical site resources to assist and monitor patient's during each infusion, the COVID-19 environment may have an impact on future enrollment of patients. Because of the activity and safety we've noted thus far with 253, it remains a viable candidate in our pipeline and we look forward to keeping you apprised of its progress. I’ll now turn the call over to our Executive Vice President and Chief Financial Officer, Mr. Greg Chow, who will review the results of the quarter. Greg?

Thank you, Bill, and good afternoon, everyone. We ended the quarter with approximately $90 million in cash and cash equivalents and investments compared to $97 million at December 31, 2019. During the quarter, we utilized approximately $8.1 million of cash in operating activities compared with $4.9 million for the same quarter last year. The increase is attributable to increase activity surrounding 253 and 806 and general and administrative purposes. Moving on to the income statement, we had no revenues for the quarter. Research and Development expenses were $5.9 million for the quarter, compared to $3.3 million for the same quarter last year. This increase was primarily again due to CG-806 activities, particularly the clinical trial, which did not begin until Q2 of last year. G&A expenses for the quarter were $5.9 million compared to $2.3 million for the same quarter. This variance is primarily due to an increase in stock-based compensation. Finally, our net loss for the quarter was $11.5 million or $0.15 per share. Before I turn the call back to Dr. Rice, I want to mention that we entered into a new At-The-Market or ATM agreement for $75 million with Piper Sandler and Canaccord Genuity as co-agents. This ATM replaces the previous one we had with them last year, which we terminated in conjunction with the $74 million public offering in December. Although, we have sufficient cash to fund our plan operations and R&D into 2022, we don't plan to utilize the ATM anytime in the near future. Having an ATM does provide a strategic and maximum flexibility and extending that runway. I will now turn the call over back to Dr. Rice.

Thank you, Greg. I'll remind everyone on the line that we also have with us Dr. Jotin Marango, our Chief Business Officer; and Dr. Rafael Bejar, our Chief Medical Officer. As we open the call for questions, feel free to post questions to any of us. Operator, if you could please introduce the first question.

Thank you. The first question comes from Tyler Van Buren with Piper Sandler. Your line is now open.

Hey guys, good afternoon and congrats on all the progress in such a short period of time. I guess, the first question is, of course on 806 and B-cell malignancies with respect to dose level three, can you just clarify that you stated that it was one microliter plasma exposure levels? And specifically, how consistent was that among the three patients? And then a dose level four, is there anything you could say with respect to initial plasma [indiscernible]?

All right. Thanks Tyler. Thanks for coming on. With regards to dose level three, it was -- we had achieved I called it circa one micromolar plasma exposure levels, some you have a little bit of chatter around the patient's over time somewhere a little bit below one micromolar, somewhere a little bit above. But yes, it was the -- pharmacokinetics were very well behaved. They were all in that one micromolar range. And we were thrilled to see that and it was very consistent among the three patients. In terms of dose level four, again, we have to be careful what we say, in terms of the patients that are on there. As I mentioned, it's been very well tolerated. We're very happy with what we're seeing in the patients that are on this study. But any pharmacodynamic and pharmacologic parameters at this point, we'll have to wait for EHA.

Understood.

And perhaps understood Dr. Bejar, may want to add a bit to that.

No, I think you did a great job characterizing the behavior for those patients in dose level three, I have nothing to add there.

Thank you.

And I guess, since you can't state the levels, I guess, could you just say, if you expect the increase in a plasma exposure to be linear throughout the dose cohorts or potentially be more exponential as we get into higher doses.

I really can't say at this point, we do not have the PK or PD steady-state levels from dose level four at this time. So it's very difficult to make any judgment on that. Dose level one and dose level two, we're only one patient. And so the one where we have the greatest confidence is dose level three, where we have three patients and they were all within the expected range. So we'll be able to provide a bit more data on that we get into EHA. But again, we just don't have the PK/PD data yet from dose level four.

Understood. And on AML, you identified initial dose, but didn't say which dose would be whether dose level three or four or even potentially two, as you refer to with the 300 and 450 milligram. So I guess, is it possible that maybe you drop down and use dose level two as a starting dose? And when could we learn what the starting dose is that you guys use in AML, we have to wait for IND approval?

What I will say is, we are recommending a dose that is derived from a cohort that has been completed. We are still in dosing a Cohort 4 so that narrows it down to the other cohorts. What I also would say is based on the exposure levels, and the pharmacodynamic and pharmacologic activity that we saw in those two dose levels, either dose level two or dose level three could represent starting doses, I would feel comfortable with either of those. And so we are making the recommendation up to the FDA based on all the totality of the data. And that's all been written up, and we're trying to get it in within a matter of weeks and submitted to the FDA.

Okay, very helpful. Thanks for taking the questions.

Thank you.

Thank you. And our next question comes from John Newman with Canaccord. Your line is now open.

Hey, guys. Thanks for taking the question and congrats on the progress. So Bill, just wondered if you could give us a sense as to type of data and the cohorts that we might see at EHA. I know that you obviously can't talk too much about it, but just generally speaking, I wondered if you could just maybe describe a bit more as to just the type of information we might see there?

All right, John. Thanks for coming on. So we've been very consistent about this, and we want to make sure everyone understands our guidance. Our guidance is that we plan to present safety, PK, and PD data, pharmacodynamic data from Cohort 1 through Cohort 4 at EHA. I believe the required submission date for abstracts to be uploaded on the 27th of the month of May. So we're trying to collect as much data as we can at this time, especially as far as we can through Cohort 4, get those data cleaned, evaluate them, and then get them integrated into the posters. If additional data come through after that, May 27 to-date between now and the time that we presented at EHA, then we would likely have to include that such data there in a press release. But those are the types of data we're telling people don't expect to see response data. We're just now getting into the higher dose levels. We're getting into the right patient types that we want to see and possibly get responses. But it does take time. We're seeing everything that we're hoping to see at this point. But it can take a couple of months before you start seeing responses in these chronic B-cell malignancy patients once you achieve these higher dose response.

Perhaps, Greg alluded, I want to add -- go ahead.

Jotin, sorry. And just one additional question which is, could you just remind us the way that the CG-806 study was designed, could you just remind us of the time that the patients were on a specific dose before the next cohort enrolled, and what I'm trying to get at here is just that the amount of follow-up time between the dose escalation, I think is relatively short. And I just wonder if you could explain that to people. Thank you.

Yes, so for instance, Cohort 3, we had to place three patients on that study, all of them had to complete -- the safely and successfully complete a full cycle, which is 28 days. Now, if you could enroll all three patients on day one, then it would only be effectively a month of dosing. And then it takes weeks to collect all the data from the clinical site, monitor the data, ensure the data are accurate, that PK/PD safety data, present those data then to the CSRC, Cohort Safety Review Committee. It can be several weeks after you complete the dosing numbers clinically sizeable. Then you have the data presented to the CSRC, then they have to vote, move up to the next dose level. So that gives you a sense and if you could get all three patients on it day one, that clearly would accelerate the timeline. But that's just not the way it happened. In these escalation trials, you may get one immediately, it maybe a week or two before the next one, the week or two before the next one. We actually look at many patients, but they have to fit the in the entry criteria, and not be excluded, because of the other data. There are often patients that we see that, we'd like to bring on, but they have to be excluded because of their disease status. So that just gives you a sense of what it takes. And the other thing, I'm sure, you're trying to get us how many scans will we have on some of these patients, and try to provide a little bit more guidance on that as we get closer toward the EHA. Some of these patients that have been on for a long time, patient one, as I said, completed 10 cohorts -- I mean, excuse me, 10 cycles at the first dose level, they've now moved up to dose level three, and it's going to be squeaking to try to get a scan in there, we will try. But there's no guarantee, we can get a scan in considering the COVID environment before EHA, we will try. The same is true from dose level three and dose level four. Hopefully, we can squeak a couple in before that. But there's no guarantee considering the COVID environment that will actually be able to get all those scans. I can vow to you, we will do everything possible to do so. And to then be able to represent those data EHA. Let me see, if any of the other teammates want to add anything to that, Greg, Jotin, Rafael. I guess, not. All right. Thank you, John.

Thank you.

Thank you. And our next question comes from Gregory Renza with RBC Capital Markets. Your line is now open.

Hey, guys. Thanks for taking my question. And congratulations on the progress and glad to hear that all as well with you, you and the team, I mean in this environment. Yeah, Bill and the team just connected to the environment and appreciate the color on teaming up expectations coming into EHA into June. I'm just curious, if you would have the ability to at least touch on or anticipate some of those expectations as the 806 trial progresses for the back half of the year. And as you talk about getting to those levels, where we would perhaps see responses and looking at, what has been a disciplined disclosure plan and how -- how you think about this environment affecting or maybe even reiterate given what you've already provided on -- on how you're sort of crosswind and weathering the impact here about, how disclosures could look at the back half of the year with respect to the trial? Thanks.

All right. Thanks, Greg. We'll do. Yeah. First of all, it reminds me so I can see all you guys sitting in New York City, we're all thinking about you hope everybody is safe there. Regarding the expectations, as I just described for EHA, we've been consistent all along with what we expect to be able to present at EHA that in June, coming up very soon. But as we get into the second half of the year, we expect to be able to present additional data, especially at ASH at the end of the year. We hope by then, that we will have had the correct types of patients on the higher doses, doses long enough to see responses. Again, we're seeing everything that we hope for at this point, except that we need to have the patients on longer to start seeing those responses. And again, we hope to be able to present through responses at the ASH later this year. And you've seen this with other covalent -- non-covalent BTK inhibitors it just takes time, especially for these deeply relapsed refractory patients takes time for them to show responses. Even, if you were to get Lymphocytosis earlier on, it still takes time for the scans to show a -- you only scan the patients every two cycles. So that's two months apart. And only then are you able to tell whether or not they truly have a response. So that speaks to the B-cell malignancy trial for the AML. As I mentioned, we want to get that trial up and running as soon as possible. We've been able to collect all the data that we need from the ongoing B-cell malignancy trial, all of those data are being now cleaned and put into the new IND for the AML study, the prospective AML study. We want to get that, get it submitted to the FDA as soon as we can. Again, we have the 30 day turnaround, because we have orphan drug designation. We hope that, in today's environment that the FDA will be able to turn it around in 30 days. I commend the FDA they have a lot on their plate, but they've actually done a tremendous job. We've been in contact with them on other activities, progress reports, annual reports, and so we've been on protocol amendments, so we've been very pleased with the turnaround time. But there's just no guarantee going forward. We will get that study up and running as soon as possible. And you have to remember, the AML patients that's an acute disease. If you have truly a therapeutic dose that hits split three, we would expect to start seeing some effects within the first month of dosing. And hopefully, by the second month, you start to see some what you can consider the responses in the bone marrow, as well as the peripheral blood. So that speaks to the second half of the year, what would be able to hope to be present in multiple patients with AML, toward the end of the year at ASH, keep your fingers crossed, that we'll be able to get everything through the FDA. We're working with a variety of clinical sites, major institutions, as well as we said the regional site, we want to get those patients on. And again, as soon as we start dosing, we believe it will be a therapeutically active dose, and they should be three patients at that dose level. One other thing that I would add, I forgot to mention earlier. We do have a protocol amendment for our B-cell malignancy trial that will allow us to backfill patients into earlier dose levels, if we choose to do so. A good case, where you might want to do that is, when you've completed one dose level to three patients, you're waiting to collect the data and get the CSRC to move up to the next dose level. So before you can move patients up to that next dose level, we might consider backfilling some on the prior levels. And also, we'll try to keep moving patients up to the highest dose level we can. So for instance, we moved up the patient one up to dose level three, when we complete dose level four, assuming we complete it, and it's safe. We want to move up all patients on dose level one, and dose level three to dose level four. So those are the types of activities throughout the rest of the year. And thanks for being there for us, Greg. Appreciate it.

Thanks. And one more question, if I may, just as far as COVID-19 potential impacts. And I'm just curious, if you could remind us, you mentioned in the past healthy volunteer trial maybe to characterize PK/PD more fully. I'm just curious, if there's -- how that fits in, if there's any impacts, we should be thinking there and what you glean from that how important that is as an input to the overall program? Thank you very much.

That's actually an interesting question. So we described these as cross winds rather than headwind. I think it was Greg Chow that came up with the analogy. And with the COVID-19 out there, what it means is there's so many additional challenges we have to address. So, we're still able to fly the plane, it maybe just been a little few different changes in direction to get where we need to go. But we're still maintaining on our original timeline and plan. And as opposed to a headwind that really pushes you and hold you back. So at this point, we don't see the COVID-19 necessarily, at least -- at this point, dramatically influencing any of our timelines, we're still on plan. In terms of the healthy volunteers study, we were originally considering doing that study, so that we could get additional PK data. But as we were putting that together, we realized we were getting plenty of the PK data both from the B-cell malignancy trials, as well as the upcoming AML trial, we should be able to get all the PK/PD data that we need. And so there is not the need to perform an additional healthy volunteer trial. It doesn't really add anything additionally to us at this time. We believe we can get all the data that we need from the current trials. Does that answer your questions adequately?

Yes. Sure it does. Super helpful, thanks, Bill and congrats again on the progress.

Thanks, Greg.

Thank you. And our next question comes from Matt Biegler with Oppenheimer. Your line is now open.

Hey, guys. Thanks for taking my questions. My congrats on progress. Bill, for the EHA data set, what are some of the other important biomarkers in addition to phospho BTK. And evidence of lymphocytosis that you think we should be paying attention to?

Well, the lymphocytosis is you would only expect to see that in some CLL patients. So for instance, if you have a CLL patient that comes in with a reasonable load of malignant cells in the bloodstream, then when you start treating with an active BTK inhibitor, you could expect to see lymphocytosis. So that is something that, we definitely are watching for, you should watch for that around the timeframe. As for the responses, again, to get a response, you have to look at the scan. And the timing of that is very close. We're going to do all we can we hope to be able to see responses, but again, don't expect that at EHA. What else we look for is in -- well -- but let me back up. So we talked about lymphocytosis, you don't expect that to see those and the other types of patients. So follicular lymphoma patients, DLBCL patients maybe in Richter's, so you don't necessarily expect to see them from tosses and nose or even the FLL patients, because it will low load in the peripheral blood. But we would hope to see it from the CLL patient. That's why it was important for us to get a CLL patient on very early, that was dose level two. And then also in these current dose levels and going forward, it's important for us to get those types of patients going forward, so that we can show you these types of activity. We also want to be able to in particular to get collect PBMCs, again from CLL patient. Why? Because if you're trying to click nor PBMCs from patients that have follicular lymphoma on some of these other lymphomas, you don't necessarily get a picture of what's going on in the malignant cells. But if you have CLL patients that have a reasonable load of CLL cells, and you dose patients, you very often can pick up enough of the signal, you can see inhibition of phospho BTK using an ELISA assay, and that is in the PBMCs. And we actually showed that in dose level four demonstrating its pharmacologically active. We also have been able to demonstrate that we inhibit this other. We talked about our drug inhibiting multiple key kinases and these key oncogenic pathways. So of course, we talked about SYK, S-Y-K and BTK. And down then downstream of BTK, you want to look at ERK. We've been able to show we inhibit those fully in the dose level so far. PDGFR-alpha is another one that we want to see. If a cell surface receptor and we want to make sure that we see that we're turning it off, as well as some of the interstate or kinases in that PIA assay and we've been able to show that as I mentioned in dose levels, one, two, and three. One of the other things that you should look for, but we haven't spoken about it yet that much is phospho-FLT3. An order for us to move into AML, we have to confidently say that we believe in this PIA assay that we can inhibit phospho-FLT3. So that gives you a sense, we've seen that. And I'll just say, we've seen innovation of phospho-FLT3 in our PIA assay that gives us confidence that we can inhibit. Not only is it phospho-FLT3, it's also wild type, phospho-FLT3 that we're able to turn off. And that's even more difficult than the FLT3 ITD. So that gives you a sense of what we're having to look for, not only the safety, the PK levels, but the PK levels will show those data. And what we know is that the levels we are already achieving is above the levels that were required to get complete cures and animal models of AML. So all of this in its totality gives us the confidence to move forward and that's the types of data we'll be able to present. And thanks for that'll mean on you too are in New York and hope you two are safe. Thanks for joining.

Absolutely. Thanks. Thanks for taking my questions.

Thank you. Our next question comes from Jason McCarthy with Maxim Group. Your line is now open.

Hi, this is actually Naureen on for Jason. Thanks for taking my questions. So I guess I have a sort of a devil's advocate type of question regarding your PIA assay In the CG-806 study in CLL, is there any concern that the degree of BT inhibition that you're seeing that it shows 100% inefficiency, isn't at exactly indicative of clinical activity in the body that it may not capture a level of BTK inhibition throughout the body? I guess, I'm actually asking, because if you look at one competing BTK drug that's a bit more advanced, which showed complete inhibition at early doses and yet up to now they haven't quite -- it hasn't quite translated into clinical activity. So I guess my question conversely is how confident are you in the clinical applicability of this assay?

Oh, great question because you are preaching to the choir. I've addressed this on many occasions. Inhibition of fossil BTK indicates that you are hitting -- your drug is pharmacologically active and you are hitting a key component. But inhibition of BTK does not kill the CLL cells, it just changes the homing device. So BTK is responsible for maintaining those cells in the lymphoid tissues, the lymph nodes, the spleen, and it keeps them there. When you inhibit BTK that changes the homing, so that the cells now leave those lymph node tissues going under the peripheral blood for they have a tendency to die. And if you maintain that activity over long term, then the patients tend to respond. But the BTK inhibitor itself is not killing the cells directly. So other companies, you've seen this at lower dose levels, they'll see inhibition of phospho BTK. And it may take two or three or even four dose levels above that, until they start seeing responses, particularly in these relapsed refractory patients, these deep failure patients. Why is that? Well, it's because the BTK is not enough, just inhibiting BTK and those patients is not enough. They have other pathways, other kinase pathways that are activated additional mutations. So one of our competitors, yes, I think it dose level four they had complete inhibition of BTK. But it was dose level seven or so before they actually showed responses. They had to continue increasing their dose levels to begin hitting those other kinases before they started seeing responses. So your skepticism is very -- it's bounded in reality, and I agree with you. The difference here is we can already tell you, we're not just inhibiting BTK, we're also inhibiting those other kinases. So some of the other molecules were more potent against BTK and less potent against the other kinases. So they really have those escalate to inhibit the other ones. Ours has much more of a similar activity profile in the picamolar low animal range against these key kinases that were inhibiting, I mentioned FLT3, BTK, EGFR, ERK, SYK, all of these. We're inhibiting all of these at these dose levels. So that should give us more confidence as we show that we inhibit these multiple kinases that should translate into efficacy. It's more difficult to predict that and B-cell malignancies, but based on the science and the medical observations to date, we should be able to see responses over time. And we do know that in AML, if you have an active inhibitor in FLT3, that is known, it is sufficient to give response it is not sufficient overtime to maintain responses, you need to hit other kinases and also the different mutant forms of FLT3. But if you have an active FLT3 inhibitor, it is confirmed that you can get responses in these patients. Perhaps Dr. Bejar or Dr. Marango, want to add to that?

Yeah, thank you, Bill and thinking for the question, Bill captured very well, the application and the coverage of these targets by PIA kinase activity. The one thing I was going to add is perhaps just highlight again, some of the differences between the indications when you apply this assay in CLL versus AML. And specifically in AML, which is direction now that we have ahead of us later this year. In addition of FLT3 in this assay is a surrogate for clinical activity. And we have actually seen this in previous drug trials and PIA assays that have published from tyrosine [ph] and gilteritinib back from the Phase I and gilteritinib it where all that seemed to be required in the same patient was just about 85% or more inhibition of FLT3 activity. And those were the patient that then would respond. So as Dr. Rice said, it is sufficient for a response that's FLT3 in addition, and that is in contrast to BTK in CLL, where BTK is necessary, but not entirely sufficient, you need to hit this other kinases, which coincidentally we do. And I know we also have one of the myeloid disease experts on the call Dr. Bejar. So I will -- I'll also pass it to him if he has any extra thoughts.

I think the other important -- the other important point to make is that when we're doing these PIA assays, we're using a reporter cell line in the laboratory the cell line doesn't mimic the tissue architecture and the supporting cells that are around it. So you're right, it is actually easier to inhibit those markers in these artificial cell line reporters than it is in the patient. But we also have the ability to take cells from the patient, whether they need normal, peripheral blood mononuclear cells, and look to see if the activity of these pathways is inhibited by the level of drug that's in their plasma. So we -- that's additional data that we're collecting on the study that hopefully will give us a better insight about what these drugs are actually doing mechanistically inpatient. And I agree with Dr. Marango, point about AML, that AML seems to be more straightforward in terms of its susceptibility, or its addiction to that activated oncogene. And when you inhibit FLT3 activity, you see rapid cell death, which is where we see more rapid responses in that patient population. But as Dr. Rice mentioned, that's not sufficient that there are mechanisms of escape that either needed or immunogenic or have to do with gene expression regulation that can quickly come into play. So you need to have a little broader activity against other potential salvage pathways in order to have a lasting result in that patient population.

It's really helpful from all of you. Thank you so much. I just have one more follow-up question. You mentioned that there's a one patient from dose level one that was -- that's reportedly been moved up to the third dose level. I guess for my own sake, how would you count this patient now as part of only the first cohort? Or would you count this patient as part of both, the first and third? And perhaps can you talk about the rationale for moving him -- him or her up to the third dose? Thank you.

The answer is yes, they will be considered part of one and part of three. So, I'm going to ask Dr. Bejar to address why you would want to move them up to the higher dose levels?

Sure. So, getting back to the same point that Dr. Rice is making with your prior question, we think that it's important to hit not just BTK but the other enzymes that are potentially compensatory for loss of BTK activity. And we know that we're going to have different sensitivity to these different enzymes to different levels of the drug. So, a patient that's on a dose of 150 milligrams twice a day, for example, where we show inhibition in BTK, may need higher doses in order to achieve inhibition of other compensatory pathways. So, if the drug is deemed safe, at that higher dose level, I think we improve the likelihood that a patient might have a beneficial outcome if we were able to dose escalate them to that level. So, the motivation to do that is to help increase their chances of having a good outcome. It does also give us an opportunity to learn more about PK and PD activity in that patient. And ultimately, this is something that the patient also is interested in doing in the hopes of achieving a better response.

So, I think the good example of that is one of our competitor companies, they got purchased by another large company this past year. They moved up patients from the lower dose levels up to I believe 65 milligrams, and the 75 milligram patients down to 65. So, they selected a dose level at which they felt was efficacious and non-toxic. And at that point, I believe, not -- maybe not fully correct, but I do believe that is the only dose level at which they demonstrated PRs, the responses in the B-cell malignancy patients. So, again, even if they're on lower dose levels, doing well, hitting certain kinases, move them up to those higher dose levels, because the burden is upon us to make sure that we're giving these patients the best chance to respond and to do so safely. And you need to give them as much drug as you can, as long as it's safe and well-tolerated.

Thank you. Thank you for the color. That's all for me.

Thank you. Our next question comes from Matthew Cross with JonesTrading. Your line is now open.

Hey guys, good to hear from you and appreciate you addressing some of the key questions out there about EHA and CG-806 AML program with this call. Just a few questions for me. I guess, first of all being -- I'm glad that we're very clear here about kind of the expectations for EHA and ASH and just wanting to drill on a little bit about -- related to that a comment you made in your introductory remarks about kind of an expectation of a reduction in blood draws as a result of the COVID situation. So, I was curious to get kind of a little bit more insight into how that reduction in blood draws that may have already started and going forward may impact the PK evaluations at EHA and at ASH given that you've stressed it, particularly at EHA PK/PD and safety will kind of be the most important things to look at just how that may impact the data flow for that -- for those events?

All right, thanks Matt. This is Bill again. So, all we want to certain is that we're collecting all of the blood samples that really tell us the picture of what's going on. Good example is we've shown previously that by day eight, all the patients achieve steady-state. So, we would make -- want to make certain that we get all the dose -- all the blood samples throughout day one, the beginning of day two, and then day eight, so that we understand the initial pharmacokinetics on day one, as well as then hitting the steady-state. We then have been collecting at day eight, 15, 22, and then at the end of the cycle to day one, which is think of it day 29. So, that gives us all of the steady-states, but what we've decided is, well, we can miss maybe a couple of those in between, for instance, day 15, we can live without that, or even day 22 if we had to. So, we're trying to minimize the burden on the patients and then coming back into the site. We're trying to make it so that if possible, we can go out and have someone draw the blood remotely or they can go to other sites to have them drawn if they can't get into a clinical trial. But we're certain that we can have an understanding of the steady-state pharmacokinetics with these patients, which is what we really want to know. It's that minimum dose minimum exposure level that's critical to achieve and maintain to continue pressure on these on these kinases in the patients. So, those are the main points. We're still collecting the samples for the PBMCs. On day one, we're going to actually try to collect those at also at later times, so we can get a better read on what's going on and also BTK and the PBMCs. So, we may -- we believe we're going to be able to provide all the needed data to correlate PK/PD relationships. Did that adequately answer your question?

Yes, it did. Thanks Bill. That's great insight. And glad it sounds logical to me as far as the handling of it prior to these upcoming readouts. I guess I had kind of a two-part question then as a follow-up on AML. And that program beginning, I know we're early days with discussion with the FDA, but just trying to get a little bit of more color around your expectations of what you're putting forward to the agency. I guess, kind of two parts, like I said here, one, wondering if you're going to intend to focus on patients or from an inclusion standpoint, or maybe just from a stratification standpoint, enrolling patients based on FLT3 mutation, particular FLT3 mutations therein, I know you've shown evidence across the board within FLT3. But is there an intent to focus on AML patients broadly in the dose escalation portion or to focus on these FLT3 mutants, whichever forms those may be? And then the second part was for AML, in particular, you've been very prudent, I think, to not begin testing and patients until you have a dose you would expect to be to some degree efficacious. But because of that, I'm sure you're also eager to begin testing in combination with venetoclax where I know you've shown preclinical synergies, maybe other agents. So, just curious what you hope to kind of see from the CG-806 monotherapy and initial dose escalation prior to moving into combination testing to really drive it at best outcomes, as we're kind of beginning to speculate about what we may see from the initial dose escalation?

All right. Let's see if I can get through all of those.

Happy to repeat anything if I need to.

No, no, that's okay. So, for the first part, you want to know what types of AML patients we want to bring on this trial? So, in effect, we are mutation agnostic, so we're not going to differentiate among the patients based on the genetic background of the patients, we effectively want to have all comers. Having said that, we'd love to be able to get some FLT3 ITD patients on early because those likely will be by far the most responsive very quickly. So, that's something that we would hope to get on at the early dose levels or early cohorts among the first three patients we will try. But we're also eager to show that this drug should be active against those patients, as well as patients that have wild type FLT3, various other mutations in FLT3, patients with BTK3 mutations, RAF mutations, all of these types of patients, in particular ones that are now resistant to other FLT3 inhibitors, we'd like to get those on. Now, it may be that we try to push some of those to the higher dose levels where we think maybe if so be more effective, but we just have to see how effective it is at the entry dose level here. But yes, to answer your question, we want to put value on the molecule as soon as we can, get it in this what we believe are some of the most sensitive patients, but we are going to go after all these patient populations within that study. In terms of -- we've spoken that, we want to test this drug in patients with AML with MDS, single agent and in combination. In order to try to get this study going as quickly as we can, we're going to focus immediately on AML patients and single agent. Once we get that lined up, then we would likely come back and expand to MDS patients because we believe our drug can be active there. And then also to then began also the combination studies. So, what I'm going to do is I'm going to ask Dr. Bejar to address those and give some of his thoughts on that because he's also the expert on MDS.

Yes, thanks Bill. As usual, you've already answered the question and leave me to follow-up. So, he's exactly right, that we do have an intent to look at the activity CG-806 and myeloid malignancies beyond AML and MTS, in particular given the relationship of its biology to AML in general. And in the short-term, we want to get the AML study up and running, do the dose escalation, understand how it started performing in that patient population, and then go and expand to other indications including MDS and consider combinations with drugs like venetoclax for example, where we have strong preclinical data that we shared before. I think it certainly is a population that has need and as far as tyrosine kinase inhibition and MDS goes, this would be a novel use. This is not something that is currently considered part of the standard-of-care. So, really expand the treatment options for that patient population as well.

Perhaps you can talk about the titration of venetoclax clacks into AML patients versus CLL patients and why we would like to go into AML patients first for the combo?

Right. Unlike in CLL, where venetoclax has very potent single agent activity and can become a little bit more difficult to combine with other active agents due to the risk of tumor lysis syndrome and things of that nature, you have to be a little bit more cautious in that patient population. In AML, venetoclax has very modest or marginal single agent activity, really has only shown significant benefit when combined with other agents like hypomethylating agent. And in that patient population, we don't see the same risks. It tends to be much safer and easier to dose in combination, especially if you're combining with a drug that doesn't have overlapping toxicities. So, as you know, venetoclax has the propensity to lower blood counts, particularly, neutrophils. So far, we have not seen any evidence of that with CG-806 in our B-cell patient population. So, we're hopeful that that kind of combination would allow us to very safely and quickly understand how to put the two drugs together in AML patients.

Thank you. And then we could apply that to what we've learned in AML patients with the B-cell malignancies for the combinations. I would also ask Dr. Marango, if he has any additional input in terms of the selection of patients for the AML?

Yes, thank you, Bill and thank you, Matt, for the question. As you heard about at this point, two or about three months ago, we held a symposium around AML in New York City, where we discussed a lot of the issues open in this relapsed, refractory population. A lot of the activity that was in [Indiscernible] from this drug and how we are thinking about this drug, but also how some of the experts in the field are thinking about it. And it's exactly discussions like that and feedback like that, which was the open that are also driving our positioning and our strategy. And so as Dr. Rice and Dr. Bejar mentioned, there are some sort of lower hanging fruit populations out there sort of unaddressed sort of clinical needs within FLT3 patients that have received the three inhibitors before, they are relapse, so resistance, intolerance, patients with very problematic mutations, BTK3, RAF. All of these should be able to be captured in this Phase I study and then pragmatically, could then lead to separate investigations. As you know, the most traditional path for an agent like this is typically a staged approach, right? A targeted agents in hematology. So, you start as a monotherapy in relapsed/refractory disease, disease substance that could be resistant or intolerant to other therapies. These present all fast development path to accelerated approval. Let's call that stage one. And then following closely, not quite in parallel, but potentially a few steps behind, you can have stage two, which would be expansions towards combinations and then expansion towards the and frontline. And in many hematology indications, including CLL and AML, these two actually go hand-in-hand, right combination and then move towards the frontline. And this type of path would apply both to CLL, B-cell tumors as well as AML. And that is something that you're likely to see here.

Thank you.

Great. No, that's super helpful and appreciate you guys all chiming in there with some input. I think it's very cogent to describe the differences that you may see with combining with venetoclax and these two different indications and the path forward and then even kind of looking very much ahead maybe, but to frontline usage. So, really appreciate all the insight and stay safe guys.

Thank you. You too. Thanks Matt.

Thank you. And our next question comes from Joe Pantginis with H.C. Wainwright Your line is open.

Hi guys, this is Pasquale from the line of Joe. So, a few questions from me on the 253 trial. So, basically, are you looking at MYC-associated genes in the plasma of these patients?

I'm sorry, it was difficulty -- are we looking at specific genes in the patient's -- is that what you're saying?

Are you looking at specific MYC-associated genes in the plasma of these patients?

I'm not sure I fully understand your question. So, we are collecting PBMCs from these patients. We're measuring the expression levels of MYC as well as a variety of other genes. So, the gene expression by -- that says, yes -- we are doing that in these patients. We haven't reported out all the other genes that we're looking at, primarily MYC because it doesn't include MYC. But yes, we are looking at a number of genes in the PBMCs' expression levels.

And these genes are associated with MYC pathway, is that correct?

Some are, some are not, yes. So, some of these you expect might be altered if you inhibit MYC, but there are also other genes that we're interested in using.

So, my second question is, is there a specific MYC signature associated with the defined AML genetic entity? So, basically, in other words, what would be the optimal 253 AML target population?

Actually, I think MYC is known to be overexpressed in many different subgroups of AML patients. I think what we would look for hopefully is patients who are overexpressing MYC. So, as we've looked in cell lines that are overexpressing MYC both in AML, as well as other hem malignancy and even in solid tumors, those that are over expressing MYC, tend to be more sensitive to the drug. That's one of the reasons we've talked about possibly expanding out into other malignancies. Right now with COVID, it's difficult to expand. We're trying to maintain the AML trough, but we may want to expand into Burkitt lymphoma that is one that is known to be driven by MYC. There are also other indications that are heavily MYC-driven. So, that's most likely where ultimately we might look to focus in patients to respond to this. I hope that answered your question.

Yes, basically -- yes, okay go ahead.

I didn't know if Dr. Bajer wants to add anything to that AML and MDS?

I would just say that we're collecting the samples to be able to answer those questions. We haven't predefined a mix signature that we're looking for in this patient population in order to decide who might be responses. But we definitely want to capture that in the patients that we do treat, so that if there is such a segment, we'll be able to understand it and characterize it.

Yes, that's great. So, in other words -- we don't know what's going to happen when you just knock down MYC. So, all the other drugs that in the past that have been designed to inhibit MYC have been quite toxic. So, it's not known yet -- at least clinically, what will happen if you can selectively knock down MYC and safely to do so. So, we're looking -- we're eager to find that out.

Yes, that's very helpful. Is it a way to select for patients with MYC expression?

With what expression, I'm sorry?

With MYC expression? I was wondering if going forward, you're thinking at the way of selecting like biomarker-specific patients using MYC?

The best one to look out there is literally MYC expression itself. We're able to do that very quickly in the PBMC. So, one of those, as I said earlier was Burkitt lymphoma. Now that we know this is a MYC inhibitor, we'd want to look at those types of patients and hopefully select those. With AML, let us collect some data in patience. Let us see if the MYC inhibition correlates with sensitivity and with clinical activity over time, as we get into the higher dose levels. I'd like to think that would be -- that's true, but I do not yet have data to support that. So, we'll have to collect the data.

Yes, perfect. Thank you so much.

Thank you.

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

All right. Well, I want to thank everyone for joining us this afternoon. And I particularly want to say thank you for all the insightful, thoughtful questions that came to us. Although, we have much work ahead of us, we're gratified about our progress of our two clinical programs both 253 and 806 and that we've been able to recruit new patients and escalate the dosing in our clinical trials even in these difficult times. I particularly want to thank our clinical team, our investigators, our patients for their health in this important work. We appreciate the support of our shareholders and the analysts that are on this call. We look forward to keeping you updated on our progress. We hope to see you with EHA, although it's going to be virtual. And I want to thank everyone and have a great evening and be safe. Thank you very much.

Thank you. Ladies and gentlemen, that concludes today's conference call. You may all disconnect and have a wonderful day.

Thank you.