Moleculin Biotech, Inc. Reports Financial Results for the Fourth Quarter and Year Ended

Moleculin Biotech, Inc. Reports Financial

Results for the Fourth Quarter and Year Ended December 31, 2016

Recently Received Orphan Drug Designation

HOUSTON - April 3, 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 fourth quarter and year ended December 31, 2016.

2016 Accomplishments & Recent Highlights:

Planned activities and milestones for

the remainder of 2017:

Walter Klemp, Chairman and CEO of Moleculin

stated: "We are pleased with the accomplishments during our first year as a public company and into 2017. Our recent receipt

of Orphan Drug designation is extremely important because it may provide significant benefits,

including tax credits, exemption from certain fees, and market exclusivity upon approval. We remain focused on executing

on our clinical programs and look forward to announcing additional key milestones as they are achieved. We believe we have sufficient

funds to pursue our planned operations into the first quarter of 2018."

Audited Financial Results for the Year

Ended December 31, 2016

Research and development (R&D) expense

was $1,495,561 and $260,418 for the twelve months ended December 31, 2016 and for the period from July 28, 2015 (inception) to

December 31, 2015, respectively. The increase of approximately $1,235,000 mainly represents an increase of approximately: $253,000

related to an increase in R&D headcount and associated payroll costs, $111,000 for sponsored research and related expenses;

approximately $660,000 associated with developing and testing drug product as we prepare for clinical trials; and, $245,000 related

to travel, consultants, and other research costs associated in preparing our IND and Orphan Drug applications with the FDA. These

increases were offset by an approximate $34,000 reduction in patent prosecution and other expenses.

General and administrative expense was

$2,381,424 and $477,810 for the twelve months ended December 31, 2016 and for the period from July 28, 2015 (inception) to December

31, 2015, respectively. The expense increase of approximately $1,904,000 was mainly attributable to: (a) the increase in headcount

and associated payroll costs of $648,000 including severance of $118,000 and roughly $254,000 of stock based compensation and deferred

salary; (b) approximately $584,000 in legal, accounting, consulting, and other professional expenses; (c) approximately $389,000

in public company costs; (d) approximately $183,000 in insurance expense; (e) roughly $50,000 in travel expenses; and (f) approximately

$50,000 in occupancy, office and other costs. These increases are directly related to our being fully operational versus this period

We utilize outside consultants. Total wages

paid to our employees, including our CEO, CFO, COO, CMO plus two other employees, were approximately $549,000, predominately in

the second half of the year.

The net loss for the twelve months ended

December 31, 2016 was $3,926,361 which included non-cash expenses of approximately $450,000, which included $6,000 for depreciation

and $324,000 for stock based compensation and other stock based expenses and a one-time expense of roughly $120,000 related to

the severance of our former Chief Financial Officer. This loss for the period is a significant increase from the loss for the period

from July 28, 2015 (inception) to December 31, 2015 of $748,360 as we had, at that time, just begun operations.

As of December 31, 2016, we had $5,007,216

in cash. During the period from January 1, 2016 through May 2, 2016, we sold 234,297 shares of common stock for $702,894. On May

31, 2016, we completed our initial public offering, pursuant to which we sold 1,540,026 shares of our common stock at $6.00 per

share for net proceeds of $8,464,183 after deducting underwriting discounts and commissions and direct offering expenses payable

by us. In February 2017, we completed a public offering of our common stock and warrants, pursuant to which we received approximately

$4.4 million in net proceeds, after deducting underwriting discounts and commissions and estimated offering expenses. We believe

that our existing cash and cash equivalents as of December 31, 2016 along with the cash generated by the February 2017 offering

described above will be sufficient to fund our planned operations into the first quarter of 2018.

Net cash used in operating activities was

$3,764,905 for the twelve months ended December 31, 2016 compared to $423,509 for the period from inception to December 31, 2015.

This increase in use of cash for operations is due to our becoming operational post IPO in mid-2016. This mainly included payments

made for payroll, travel, insurance and professional fees to our consultants, attorneys and accountants for services related to

our becoming a publicly traded company and related filing fees, along with payments made to MD Anderson for license and maintenance

Net cash used in investing activities was

$121,108 for the twelve months ended December 31, 2016 and primarily represents the cash paid as part of the acquisition of Moleculin,

LLC. No investing activities were done in the prior period.

Net cash provided by financing activities

was $8,865,138 for the twelve months ended December 31, 2016 compared to the prior period of $451,600. We received $8,464,183 net

proceeds from our IPO stock issuance, $705,894 from issuance of common stock at $3.00 per share, and $165,000 from issuance of

convertible notes. The prior period financing activities mainly consisted of the issuance of convertible notes payable. Net cash

used in financing activities included approximately $470,000 for payments of notes payable.

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 offering,

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. Forward-looking statements

in this press release include, without limitation, the Company obtaining the CMC data required by FDA on a timely basis, FDA permitting

the Company sponsored IND for Annamycin to go into effect, the announcement of the beginning of Phase I/II clinical trials, and

the establishment of the MTD for Annamycin, the Company benefitting from additional grant funded research at MD Anderson, the strengthening

of license and IP positions relative to and the future advancement and potential commercialization of WP1122 and WP1066, and whether

an IND related to WP1066 will move forward in 2017 and whether it will produce publishable clinical results in 2018. These statements

relate to future events, future expectations, plans and prospects. 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 Form 10-K for year ended December 31, 2016 filed

with the Securities and Exchange Commission ("SEC") and updated from time to time in its 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.

Moleculin Biotech, Inc.

Statements of Operations

Moleculin Biotech, Inc.