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

Moleculin Biotech, Inc. Reports Financial

Results for the Second Quarter Ended June 30, 2017

HOUSTON - August 14, 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 second quarter ended June 30, 2017 and other recent developments.

Walter Klemp, Chairman and CEO of Moleculin

stated: "We are pleased with the results of this past quarter, especially in our recent achievements with the Mayo

Clinic to supply WP1066 for a potential grant funded study, a discovery of a Metabolic Inhibitor with the potential to treat pancreatic

cancer and signing a new technology license agreement with MD Anderson. We are also excited to have begun clinical testing site

development efforts in Poland with our appointment of Bioscience SA as our Polish CRO. We look forward to submitting our IND for

Annamycin for the treatment of relapsed or refractory AML and moving forward with the FDA to allow for clinical trials to begin."

Mr. Klemp continued: "The recent

approvals of three new drugs (Rydapt, Vyxeos and Idhifa) for the treatment of AML are exciting, since they provide additional options

for treatments in defined subpopulations, and because they help underscore the magnitude of the potential opportunity for Annamycin,

which we will be studying for relapsed or refractory AML. With regard to AML, Rydapt is approved only for patients with a specific

gene mutation, and for use in combination with the standard of care chemotherapy. Vyxeos is approved as an option to the standard

of care, but only for specific AML patients, namely those with newly-diagnosed therapy-related acute myeloid leukemia (t-AML) or

AML with myelodysplasia-related changes (AML-MRC). Jazz Pharmaceuticals purchased this drug in their $1.5 billion acquisition of

Celator Pharmaceuticals.

"Although FDA approval of both

of those drugs was based on overall survival comparisons with a standard of care, Idhifa was approved based on an accelerated clinical

trial design that showed a 19% response rate in patients with relapsed or refractory AML and IDH2 mutation. What's interesting

is that Idhifa was approved with a single Phase 1/2 clinical trial based on response rate, not overall survival, and a relatively

low response rate at that. Also, the patient population for which it is approved represents only 13% of all AML patients. We look

forward to working with FDA on a similar approach for Annamycin - reliance on response rate in an accelerated path -

but for a larger population of AML patients."

"While these new drugs make valuable

incremental improvements in AML therapy," concluded Mr. Klemp, "most AML patients will still fail to respond to (or

relapse from) initial therapy; therefore, our initial clinical development plan will attempt to address the significant unmet need

of patients who relapse from, or are refractory to, initial therapy. We also believe that, if Annamycin can demonstrate superior

efficacy and safety to the current standard of care, the drug may be able to fill major areas for first-line AML treatment. In

the meantime, these transactions serve to remind us of the opportunity for our company if Annamycin shows significant activity

in our planned clinical trials."

P. Foster, EVP and CFO of Moleculin stated: "We are extremely pleased with the ongoing support of our shareholder

base. Late in the quarter and up to the first week in August we saw exercise activity of over 2 million warrants which will generate

over $3 million in cash for the Company. The overhang of over 8 million warrants generated from our February offering is now below

500,000. As such, we are pleased to report that we believe we now have sufficient funds to pursue our planned operations

into the second quarter of 2018."

Second Quarter & Recent Highlights

Commitment to Supply WP1066 for a

potentially grant funded study at the Mayo Clinic - Physician-scientists at the Mayo Clinic have requested and Moleculin

agreed to supply them with WP1066 for testing in a potential grant-funded clinical trial for children with Diffuse Intrinsic Pontine

Gliomas (DIPG), a rare and very aggressive form of brain tumor. Studies conducted at this center have suggested that DIPG may be

particularly sensitive to the inhibition of the activated form of a cell-signaling protein call STAT3, a primary target of WP1066,

and have indicated significant anti-tumor activity of WP1066 in DIPG in vitro and in vivo tumor models.

Announced the Discovery of a Metabolic

Inhibitor with the Potential to Treat Pancreatic Cancer - The Company announced on June 21, 2017, that it has received

attention from the scientific community for its glucose decoy technology as a potential means to starve tumors to death by exploiting

their hyper-dependence on glycolysis for energy production. The Company has identified possible new properties of its compound

WP1234, a modification to WP1122. In pre-clinical testing, WP1234 has shown improved drug characteristics when compared with WP1122

and a 20 to 50-fold greater ability to kill pancreatic cancer cell lines when compared with traditional inhibitors of glycolysis.

The Company believes this discovery now makes WP1234 a promising drug candidate to be studied for the treatment of pancreatic cancer.

Closing of a Follow-On Public Offering

- In February 2017, we completed a public offering of our common stock and warrants, pursuant to which we received $4.5

million in net proceeds, after deducting underwriting discounts and commissions and estimated offering expenses. On March 24, 2017,

warrants associated with this offering were exercised generating an additional $0.80 million in net proceeds. During the second

quarter of 2017, warrants associated with this offering were exercised generating an additional $2.4 million bringing the total

net proceeds from this offering to above $7.6 million.

Regained Nasdaq Compliance - On July 6, 2017, the Company

received a letter from NASDAQ notifying us that we had regained compliance with NASDAQ Listing Rule 5550(a)(2) as a result of the

closing bid price for the Company's common stock being at $1.00 or more for a minimum of 10 consecutive business days. On

May 18, 2017, the Company received a prior deficiency letter from NASDAQ notifying us that for the last 30 consecutive business

days, the bid price for the Company's common stock had closed below the minimum $1.00 per share requirement for continued

inclusion on the Nasdaq Capital Market.

Signed a new technology license agreement with MDA Cancer

Center - On July 18, 2017, the Company announced a new technology license agreement with MDA Cancer Center based on new patent

applications the Company intends to file relating to its drug Annamycin for the treatment of relapsed or refractory AML.

John M. Climaco Added to the Board

of Directors - The Company announced the appointment of John M. Climaco as an independent member of the Company's

Board of Directors, effective July 24, 2017 to fill a board vacancy. John M. Climaco, JD, 48, was most recently the Executive

Vice President of Perma-Fix Medical S.A, a Polish subsidiary of the Perma-Fix Environmental Services, Inc. (NASDAQ: PESI) where

he has served as a director since 2013. From 2003 to 2012, Mr. Climaco served as President and Chief Executive Officer, as well

as a member of the Board of Directors of Axial Biotech, Inc., a venture-backed molecular diagnostics company specializing in spine

disorders, which he cofounded in 2003. Since 2012, Mr. Climaco has served as a member of the Board of Directors for Digirad Corporation (NASDAQ:

DRAD). Mr. Climaco has previously served as a board member for PDI, Inc. (NASDAQ: PDII and as a board member for InfuSystem

Holdings, Inc. (NASDAQ: INFU). From 2001 to 2007, he practiced law for the firm of Fabian and Clendenin, specializing

in corporate and tax legal strategies for diverse clients across the U.S. and Europe, as well as joint venture, corporate and securities

transactions. Mr. Climaco earned his B.A. in Philosophy from Middlebury College, Cum Laude, and holds a J.D. from the University

of California Hasting College of the Law.

Moleculin Begins Clinical Testing

Site Development Efforts in Poland - On August 3, 2017, the Company announced it had appointed Bioscience SA ("Bioscience"),

a Polish contract research organization ("CRO") to begin identifying and preparing clinical testing sites in Poland

for its drug Annamycin for the treatment of relapsed or refractory AML.

Planned Activities and Upcoming Potential

Unaudited Financial Results for the

Quarter Ended June 30, 2017

Research and Development Expense.

Research and development (R&D) expense was $0.5 million and $0.1 million for the three months ended June 30, 2017 and 2016,

respectively. The increase of approximately $0.4 million mainly represents an increase of approximately: $0.1 million related to

an increase in R&D headcount and associated headcount costs; $0.1 million for sponsored research and related expenses; and,

approximately $0.2 million associated with developing and testing drug product as we prepare our IND for Annamycin and for the

related clinical trials.

General and Administrative Expense.

General and administrative expense was $0.8 million and $0.6 million for the three months ended June 30, 2017 and 2016, respectively.

The expense increase of approximately $0.2 million was mainly attributable to the increase in headcount and associated payroll

costs of $0.2 million, including roughly $0.1 million of stock based compensation; and, approximately $0.1 million in legal, accounting,

consulting, and other professional expenses. This was offset by a reduction in public listing expense of $0.3 million as we