Prospectus Supplement
No. 2 to Prospectus dated February 9, 2017
Filed Pursuant to 424(b)(3)
and Rule 424(c)
Registration Statement
No. 333-214898
3,710,000 Units
Each Consisting of One Share of Common
Stock and
Series A Warrant to Purchase 0.50 Shares
of Common Stock
Series B Warrant to Purchase One Share
of Common Stock
Series C Warrant to Purchase 0.50 Shares
of Common Stock
Moleculin Biotech, Inc.
This prospectus supplement supplements
the prospectus dated February 9, 2017, as previously supplemented by prospectus supplement no. 1 dated March 23, 2017 (the “Prospectus”),
which relates to the offering of 3,710,000 units, with each unit consisting of: (i) one share of our common stock, (ii) a Series
A warrant to purchase 0.50 of a share of our common stock (and the 1,855,000 shares of our common stock issuable from time to time
upon exercise of the Series A warrants), (iii) a Series B warrant to purchase one share of our common stock (and the 3,710,000
shares of our common stock issuable from time to time upon exercise of the Series B warrants), and (iv) a Series C warrant to purchase
0.50 of a share of our common stock (and the 1,855,000 shares of our common stock issuable from time to time upon exercise of the
Series C warrants). The Series C warrants in a unit were only exercisable to the extent and in proportion to a holder of the Series
C warrants exercising its corresponding Series B warrants included in the unit. The purchase price for each unit was $1.35. The
Series A warrant and Series C warrant have an exercise price of $1.50 per share. The Series B warrant had an exercise price of
$1.35 per share (100% of the unit purchase price). The Series A and C warrants will expire five years from the closing date of
this offering.
The Series B warrants expired May 15, 2017.
As such, any Series C warrants associated with the expired Series B warrants are no longer exercisable.
This prospectus supplement incorporates
into our Prospectus the information contained in our Current Report on Form 8-K, filed with the Securities and Exchange Commission
on June 30, 2017.
This prospectus supplement should be read
in conjunction with the Prospectus. This prospectus supplement updates, amends and supplements the information included or incorporated
by reference in the Prospectus. If there is any inconsistency between the information in the Prospectus and this prospectus supplement,
you should rely on the information in this prospectus supplement.
This prospectus supplement is not complete
without, and may not be delivered or utilized except in connection with, the Prospectus, including any supplements and amendments
thereto.
Our common stock is listed on the NASDAQ
Capital Market under the symbol “MBRX.” On June 29, 2017, the last sale price for our common stock as reported on the
NASDAQ Capital Market was $2.97 per share. There is no established public trading market for the warrants, and we do not expect
a market to develop. In addition, we do not intend to apply for a listing of the warrants on any national securities exchange.
Investing in our securities involves a high degree of risk.
See the section entitled “Risk Factors” appearing on page 12 of the Prospectus for a discussion of information that
should be considered in connection with an investment in our securities.
Neither the Securities and Exchange Commission nor any other
regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus supplement
or the Prospectus. Any representation to the contrary is a criminal offense.
The date of this prospectus is June 30,
2017
UNITED STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (date of Earliest Event Reported): June 29, 2017
moleculin
biotech, INC.
(Exact Name of Registrant as Specified in
its Charter)
DELAWARE
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001-37758
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47-4671997
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(State or Other Jurisdiction of Incorporation or Organization)
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(Commission File No.)
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(I.R.S. Employer Identification No.)
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2575
WEST BELLFORT, SUITE 333, HOUSTON TX 77054
(Address of principal executive offices
and zip code)
(713) 300-5160
(Registrant’s telephone number, including
area code)
(Former name or former address, if changed
from last report)
Check the appropriate box below if the
Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions
(
see
General Instruction A.2. below):
|
¨
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Written communications pursuant to Rule 425 under the
Securities Act (17 CFR 230.425)
|
|
¨
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Soliciting material pursuant to Rule 14a-12 under the
Exchange Act (17 CFR 240.14a-12)
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|
¨
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Pre-commencement communications pursuant to Rule 14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))
|
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c)
under the Exchange Act (17 CFR 240.13e-14(c)).
|
Indicate by check mark whether the registrant
is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2
of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
x
If an emerging growth company, indicate
by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial
accounting standards provided pursuant to Section 13(a) of the Exchange Act.
x
On June 29, 2017, Moleculin
Biotech, Inc. (the “Company”) held a live conference call. In connection with the call, the Company is furnishing the
conference call script attached as Exhibit 99.1 hereto, which is incorporated by reference to this Item 8.01.
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Item 9.01
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Financial Statements and Exhibits.
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(d) Exhibits.
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99.1
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Conference Call Script dated June 29, 2017
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SIGNATURE
Pursuant to the requirements
of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
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MOLECULIN BIOTECH, INC.
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Date: June 30, 2017
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By:
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/s/ Jonathan Foster
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Jonathan Foster
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Chief Financial Officer
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EXHIBIT INDEX
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99.1
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Conference Call Script dated June 29, 2017
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Exhibit 99.1
Jon – Disclaimer
Hello, this is Jon Foster, CFO of Moleculin Biotech, Inc. and
I would like to welcome you to our conference call. Before we begin, I’d like to provide some important disclosures:
Some of the statements in this conference call will be forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934
and the Private Securities Litigation Reform Act of 1995, which involve risks and uncertainties. Forward-looking statements that
we will discuss in this conference call include, without limitation, our ability to timely file and have allowed an IND for Annamycin
and to commence clinical trials, the ability to get WP1066 into a DIPG clinical trial, the occurrence of a physician-sponsored
IND for testing WP1066 in adult brain tumors this year, the ability to get WP1234 into a pancreatic clinical trial, the ability
to get WP1220 into a CTCL clinical trial and the ability of any of our drugs to show activity in these respective diseases. These
statements relate to future events, future expectations, plans and prospects. Although Moleculin Biotech believes that the expectations
reflected in the forward-looking statements we will discuss today are reasonable as of the date made, expectations may prove to
have been materially different from the results expressed or implied by such forward-looking statements. Moleculin Biotech has
attempted to identify forward-looking statements by terminology including ''believes,'' ''estimates,'' ''anticipates,'' ''expects,''
''plans,'' ''projects,'' ''intends,'' ''potential,'' ''may,'' ''could,'' ''might,'' ''will,'' ''should,'' ''approximately'' or
other words that convey uncertainty of future events or outcomes to identify these forward-looking statements. These statements
are only predictions and involve known and unknown risks, uncertainties, and other factors, including those discussed under Item
1A. "Risk Factors" in our most recently filed Form 10-K filed with the Securities and Exchange Commission ("SEC")
and updated from time to time in our Form 10-Q filings and in our other public filings with the SEC. Any forward-looking statements
discussed on this call speak only as of today. We undertake no obligation to update any forward-looking statements discussed today
to reflect events or circumstances occurring after today or to reflect the occurrence of unanticipated events.
Now, let me hand the call over to Wally Klemp, Chairman and
CEO of Moleculin.
Wally – Greeting and Comments
Thanks, Jon. Hello and thanks to everyone for joining our conference
call. Again, I’m Wally Klemp, Chairman and CEO of Moleculin Biotech, Inc. and the purpose of this call is to provide a little
better understanding of the important events of the past few weeks and to update you on current business activities. A lot has
happened in just this last month, so we wanted to use this call to put it all into perspective and review what may be coming next.
Before we do, however, I should also acknowledge that there has been a lot of recent activity in our stock. So much so, that it
would be reasonable to assume that a lot of you on this call are new to Moleculin. For that reason, I’d like to also briefly
recap the Moleculin story along the way.
From a big picture perspective, we have a portfolio of three
fundamentally different technologies, each of which is based in part on discoveries made at MD Anderson Cancer Center, the world’s
largest cancer research center. One of those technologies is a named drug called Annamycin that we are studying for the treatment
of relapsed or refractory acute myeloid leukemia or AML. I’ll cover Annamycin in more detail in a moment, but first let me
summarize the other two technologies.
Our WP1066 portfolio is a collection of molecules focused on
cell signaling. The 1066 molecule has been the subject of nearly 50 peer-reviewed journal articles and has been studied by several
respected institutions, independent from MD Anderson. Based on this extensive research, 1066 and some of its analogs are considered
promising candidates for the treatment of brain tumors, pancreatic and stomach cancers, as well as metastatic melanoma. One of
the important things it appears 1066 can do is to inhibit the activated form of a protein called STAT3. This cell signaling protein
is highly activated in a number of tumors and preclinical testing has shown that 1066 has the potential to kill tumor cells, as
well as prevent tumor growth in a range of animal models.
We announced earlier this week a collaboration with the prestigious
Mayo Clinic to s
upply them with WP1066 for preclinical testing
for a potential future study in the treatment
of pediatric DIPG. Diffuse Intrinsic Pontine Glioma or DIPG is a rare and
untreatable form of brain tumor that appears to have a high correlation with the activated form of STAT3.
The researchers at Mayo undertook their own comparison of a
panel of known STAT3 inhibitors, including WP1066, and concluded that, of all the inhibitors they tested, WP1066 was their preferred
choice to consider for a possible clinical trial. They also shared with us their own testing of WP1066 in live human DIPG tumors
that were transplanted into mice, where the compound showed antitumor activity. Based on their research, the Mayo team asked us
to enter into an agreement to supply WP1066 for further research. Although there are several steps between here and there, the
obvious goal is to try to get 1066 into a DIPG clinical trial as soon as possible.
This effort at Mayo Clinic, by the way, is separate from the
efforts of Dr. Amy Heimberger at MD Anderson. Dr. Heimberger continues to make progress toward providing requested information
to the FDA, that is of course the Food & Drug Administration, in order to move forward with her physician-sponsored clinical
trial to study 1066 in adult brain tumors. Now, for those of you who are not familiar with physician-sponsored clinical trials,
these are studies that take place when an individual doctor or institution, in this case MD Anderson, plans, conducts and pays
for a clinical trial from its own funding sources. We view this to be an important validation of the potential of 1066 and we are
optimistic these clinical trials may begin later this year.
We announced a few weeks ago that we had begun preparation of
an IND to allow us to study WP1220, a close analog to 1066, for the treatment of Cutaneous T-Cell Lymphoma or CTCL. CTCL is a potentially
deadly form of skin cancer for which there are very limited treatment options. As you may know, IND stands for Investigational
New Drug application and it is the submission you make to FDA in advance of conducting human trials with a drug. It generally contains
information about the safety of the product you intend to study, the composition, manufacture and control of the drug substance
and drug product, and proposed study protocols, among other things.
In this case, we already have a data package that FDA previously
found sufficient for an IND to study WP1220 for a different indication, and we think that gives us a bit of a leg up here. We believe
developing WP1220 for indications like CTCL may provide opportunities for strategic collaboration and out-licensing while maintaining
our ability to develop other molecules to their highest and best potential. For some added perspective here, CTCL is a rare disease
with less than 50,000 cases per year in the US and EU and for which there are limited treatment options. The most recent advancement
in topical therapies for CTCL was a topical nitrogen mustard called Valchlor. This technology, by the way, is comparable to the
mustard gas used in World War I. Valchlor was purchased by Actelion in 2013 for $250 million plus future milestone payments, so
any opportunity we may have to improve upon Valchlor for the treatment of CTCL may have significant market value.
The other technology we have for development is what we call
the WP1122 Portfolio. We believe this group of molecules has the potential to target the metabolism of cancer. Specifically, it
is well documented that many tumors are highly dependent on glucose to survive. As an example, a human brain tumor cell will consume
up to 35 times as much glucose as a normal healthy brain cell in order to survive. There is a theory that, if we could supply sufficient
glucose decoys…that is…molecules that look like glucose, but won’t convert into energy, we might be able to
starve a tumor to death. The problem with this approach until now has been that the available glucose decoys did not have enough
circulation time for adequate tumor uptake. Our bodies simply metabolize the decoys too rapidly.
WP1122 was designed to increase that circulation time and to
improve tumor uptake of a glucose decoy and it has received a lot of attention from the scientific community because of these improved
characteristics when compared with existing decoys. Through our continued sponsored research at MD Anderson, we announced last
week that we have now identified that WP1234, a close analog to 1122, has even better circulation time and a very high rate of
uptake to the pancreas in animal models.
Even though this is very preliminary information, we believe
these findings are big news. We anticipate formally presenting the findings to the scientific community in the near future, but
given the importance of showing even the early potential of any progress in an area like pancreatic cancer, we wanted to get this
news out to the public as quickly as possible. Pancreatic cancer is considered largely untreatable, so the prospect of a drug that
could slow or stop pancreatic tumor growth has potentially far reaching implications for Moleculin. Clearly, there is a long road
from this initial information to testing products against cancer in humans – let alone demonstrating safety and efficacy.
But we have to start somewhere, and we’re excited about these prospects and are already in discussions with clinicians who
are focused on pancreatic cancer to evaluate the best approach for getting WP1234 into an initial clinical trial.
Although the 1066 and 1122 portfolios represent distinctly different
possibilities for important new cancer treatments, Annamycin is considered our most important opportunity, primarily because it
is farther along the development path and already has human data suggesting activity against acute leukemia.
In order to understand just how important Annamycin could be,
let me provide some background on the treatment of AML. The good news for AML patients currently is that bone marrow transplants
are successful in curing AML about 80% of the time. The bad news, however, is that patients must first completely clear their bone
marrow blasts (or tumor cells) before qualifying for a transplant and the “induction therapy” used to do so only succeeds
about 20% of the time. So, that leaves about 80% of AML patients without hope, because there is no approved second-line therapy
once the first-line therapy fails.
The magnitude of the unmet need in the treatment of AML is evidenced
by the recent purchase of Celator (CPXX) by Jazz Pharmaceuticals (JAZZ). Celator’s lead product, Vyxeos, is a reformulation
of the current first-line induction therapy for AML, referred to as “7+3”, into a single injectable liposome. This
improved delivery method of the same old 7+3 drugs (known as cytarabine and daunorubicin) resulted in an increase in the average
overall survival of AML patients by 3.5 months. Shortly after the announcement of this potential improvement, Jazz paid $1.5
billion for Celator. Although the potential improvement is meaningful, its impact is limited, because even this improved
induction therapy likely won’t work for most patients, based on what we know. With this in mind, we believe Annamycin
has the potential to present a significant benefit to those AML patients who don’t succeed with the current standard of care,
by providing the first-ever second-line therapy to qualify them for a curative bone marrow transplant. Our belief is based
on the results shown with relapsed and refractory acute leukemia patients in previous clinical trials, and we look forward to moving
ahead with our development program. For more information on this, please refer to our most recent annual report for the year
ended December 31, 2016 on Form 10-K (Annual Report) filed with the Security and Exchange Commission (SEC).
Annamycin appears capable of avoiding the multidrug resistance
mechanisms that work against the currently approved AML drugs like daunorubicin. And, at the same time, currently approved drugs
like daunorubicin are significantly cardiotoxic (meaning their dosing must be limited due to the potential for immediate and permanent
damage to the heart). In contrast, Annamycin has shown little to no cardiotoxicity in over 100 patients treated. We believe these
characteristics make Annamycin a promising candidate to become the first-ever second-line therapy for relapsed or refractory AML,
presenting a unique opportunity, by the way, for us to request an accelerated approval pathway from the FDA.
There is much more work to be done with Annamycin, of course,
and we’re eager to move forward. The most important next step is the resubmission of the IND for Annamycin. Our most recent
guidance was that we expect to announce by the end of July that our Annamycin IND has gone into effect. We still see that we will
make significant advancement towards an IND but the actual allowance of the IND may not occur until August.
I’d like to give everyone a bit more visibility on that
process in case things are delayed by a few weeks. We believe we already have everything we need to resubmit our IND based the
feedback we last received from FDA, save for one data point relating to Chemistry, Manufacturing and Control, or CMC. The very
same chemical properties that make Annamycin different from existing anthracyclines for the treatment of AML also make Annamycin
an unusual drug substance to work with in certain testing procedures. Our contractors have had to modify some of these procedures
to adapt to the unique characteristics of Annamycin, and because these procedures must conform with what is called GLP or Good
Laboratory Practices, there is a lot of time involved in validation and documentation of these procedures. Nevertheless, we believe
we are just a few weeks away from having that remaining piece of data.
In anticipation of the Annamycin IND going into effect, we have
already begun identifying potential clinical sites for the Annamycin trial and have expanded our scope to include potential sites
in Poland. One of the key factors influencing the ability to timely generate data is the recruitment of patients for the study.
Because there are no clinical trials currently under way in Poland for the treatment of relapsed or refractory AML, we believe
conducting trials there could accelerate our recruitment of qualified patients. Specifically, we are looking for patients who are
what we call “treatment naïve,” meaning they have not been subjected to so many repetitions of failed treatment
that their compromised condition might reduce the potential for Annamycin to show activity.
Once we are able to announce the allowance of our IND for Annamycin,
we will soon thereafter be able to announce the opening of various clinical sites, indicating that our ability to recruit patients
is increasing. In this way, we hope to keep investors apprised of our progress as the clinical trial unfolds.
Now, let me ask our CFO, Jon Foster to weigh in with some observations
regarding our finances…Jon
Jon – Financial Update
Thank you, Wally.
First – during June – all of our remaining convertible
notes were converted into Common Stock - representing just over 800,000 shares. So, the overhang of these convertible notes is
now removed.
Also, recall that during the second quarter, over 5 million
outstanding B and unvested C warrants expired. Additionally, this week we have received a significant number of requests for warrant
exercises.
In our follow-on offering this past February, we issued over
8.2 million warrants. With these expirations and warrant exercises, I estimate that overhang will be reduced to below 2 million
warrants. So, we will have a much cleaner balance sheet once those exercises are processed.
In our First Quarter Form 10-Q, we discussed our cash runway
extending into Q1-2018. The additional cash from warrants being exercised will only have a positive impact on that runway.
I look forward to reporting more information about our warrant
exercise activity and on our cash runway with our Form 10-Q for the Second Quarter.
Wally -
Wally – Signoff
In closing, we are now looking at the potential for having as
many as three drugs in clinic by the end of this year, WP1066 for adult brain tumors at MD Anderson, Annamycin for relapsed or
refractory AML and WP1220 for CTCL. Moleculin is now working with both the Mayo Clinic and MD Anderson, the leading cancer treatment
center in the world, on furthering our technologies. While we are gratified to see the recent rise in our stock value, we believe
that the clinical milestones we expect in the coming months could be critical in building shareholder value.
So, keep an eye out for continued announcements relating to
our progress. Thanks again for your time and your support of Moleculin Biotech.
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