Moleculin Biotech, Inc. Reports Financial Results for the First Quarter Ended

Moleculin Biotech, Inc. Reports Financial

Results for the First Quarter Ended March 31, 2017

HOUSTON - May 15, 2017 - Moleculin

Biotech, Inc., (NASDAQ: MBRX) ("Moleculin" or the "Company"), a preclinical pharmaceutical company focused

on the development of anti-cancer drug candidates, some of which are based on license agreements with The University of Texas System

on behalf of the M.D. Anderson Cancer Center ("MD Anderson"), today announced its financial and operating results for

the first quarter ended March 31, 2017 and other recent developments.

First Quarter & Recent Highlights

Planned Activities and Upcoming Potential

Walter Klemp, Chairman and CEO of Moleculin

stated: "We remain focused on developing the CMC data needed to submit our IND to move forward with the FDA by the end of

July and to allow for clinical trials to begin. Additionally, we are pleased to have Theradex

Systems as our CRO for our planned Phase I/II clinical trial for Annamycin. As we transition from a preclinical to a clinical

stage company, we will continue to provide updates on our upcoming key milestones.

We believe we have sufficient funds to pursue our planned operations into the first quarter of 2018."

Unaudited Financial Results for the

Quarter Ended March 31, 2017

Research and development (R&D) expense

was $0.68 million and $0.02 million for the three months ended March 31, 2017 and 2016, respectively. The increase of approximately

$0.66 million is mainly due to the Company becoming fully operational post its June 1, 2016 Initial Public Offering ("IPO").

The difference mainly consists of increases of $0.15 million in sponsored research and research consultants, $0.13 million in employee

related costs, $0.14 million in manufacturing and stability costs associated with the Company's IND application, $0.1 million

in regulatory counsel, $0.07 million in costs associated with the Company's licenses, and $0.07 million of other costs. This

increased activity represents the Company's efforts in obtaining Orphan Drug designation for Annamycin and its associated

IND application with the FDA.

General and administrative ("G&A")

expense was $0.85 million and $0.31 million for the three months ended March 31, 2017 and 2016, respectively. The expense increase

of approximately $0.54 million is mainly due to the Company becoming fully operational post its June 1, 2016 IPO. Specifically,

these increases were attributable to $0.25 million associated with added headcount and associated payroll costs, $0.23 million

in legal, auditing, and accounting costs, and $0.06 million in other G&A costs.

The Company recorded a gain of $1.06 million

in the first quarter of 2017 for the change in fair value on revaluation of its warrant liability associated with the warrants

issued in conjunction with its stock offering on February 14, 2017. The Company is required to revalue certain of its 2017 warrants

at the end of each reporting period and reflect in the statement of operations a gain or loss from the change in fair value of

the warrant in the period in which the change occurred. A gain results principally from a decline in the Company's share

price during the period and a loss results principally from an increase in the Company's share price.

During the period, the Company settled

a previously incurred expense utilizing shares of its common stock with an attributed value of $3.00 per share. The gain of $0.15

million reflects the difference in the Company's share price in the open market as of the settlement date and $3.00 per share.

Interest expense includes expense accrued

on convertible promissory notes issued in 2015 and 2016 bearing interest at the rate of 8% per annum.

The net loss for the three months ended

March 31, 2017 was $0.33 million, which included the non-cash gains mentioned above aggregating to $1.21 million. Excluding this

amount, the net loss for the period was $1.54 million, which is an increase of $1.21 million over the previous years' $0.33

million net loss. Included in both net loss numbers for the three months presented was $0.11 million and $0.00 million for the

2017 and 2016, respectively, in stock based compensation.

As of March 31, 2017, the Company had $8.88

million of cash and cash equivalents compared to $5.00 million at December 31, 2016. In February 2017, Moleculin completed a public

offering of its common stock and warrants, pursuant to which it received approximately $4.5 million in net proceeds, after deducting

underwriting discounts and commissions and estimated offering expenses. Additionally, during the three months ended March 31, 2017,

$0.80 million in cash was received due to warrants being exercised. Cash used in operations was $1.39 million for the first quarter

of 2017. The Company believes that its existing cash and cash equivalents as of March 31, 2017 continues to be sufficient to fund

planned operations into the first quarter of 2018.

About Moleculin Biotech, Inc.

Moleculin Biotech, Inc. is a preclinical

stage pharmaceutical company focused on the development of anti-cancer drug candidates, some of which are based on discoveries

made at M.D. Anderson Cancer Center. Our lead product candidate is Annamycin, an anthracycline for the treatment of relapsed or

refractory acute myeloid leukemia, more commonly referred to as AML. We also have two preclinical small molecule portfolios, one

of which is focused on the modulation of hard-to-target tumor cell signaling mechanisms and the recruitment of the patient's own

immune system. The other portfolio targets the metabolism of tumors.

For more information about the Company,

please visit http://www.moleculin.com.

Forward-Looking Statements

Some of the statements in this release

are 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. These statements relate

to future events, future expectations, plans and prospects. Forward looking statements in this press release include our IND for

Annamycin becoming effective so that we may begin clinical trials, our ability to receive the necessary IRB approvals to initiate

our Phase I/II clinical trial of Annamycin, our ability to establish a new MTD for Annamycin, the ability of MD Anderson to move

forward with an IND for WP1066 for treatment of adult brain tumors, our ability to announce grant funding for a clinical trial

of WP1066 for treatment of rare childhood brain tumors, and our ability to announce Phase II data for Annamycin. Although Moleculin

believes that the expectations reflected in such forward-looking statements 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 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 contained in this release speak only

as of its date. We undertake no obligation to update any forward-looking statements contained in this release to reflect events

or circumstances occurring after its date or to reflect the occurrence of unanticipated events.

Chief Operating Officer

E: ksmith@pcgadvisory.com

Moleculin Biotech, Inc.

(in thousands except for par and share amounts)

Moleculin Biotech, Inc.

Statements of Operations

(in thousands, except

for share and per share amounts)