PDS Biotechnology Corp (PDSB) 2020 Q2 法說會逐字稿

Greetings and welcome to PDS Biotechnologies Second Quarter 2020 Financial Results. (Operator Instructions) As a reminder, this conference is being recorded.

I would now like to turn the conference over to your host, Deanne Randolph, Investor Relations.

Good morning, and welcome to PDS BioTechnology’s Second Quarter 2020 Earnings Conference Call and Audio webcast. With me today are Dr. Frank Bedu-Addo, Chief Executive Officer; Dr. Lauren Wood, Chief Medical Officer; and Michael King, Interim Chief Financial Officer.

Earlier this morning, PDS Biotech issued a press release announcing financial results for the 3 months ended June 30, 2020. We encourage everyone to read today's press release as well as PDS Biotech's quarterly report on Form 10-Q, which will be filed with the SEC this afternoon. The company's press release is available on PDS Biotech's website at pdsbiotech.com, and the quarterly report will be posted later today.

In addition, this conference call is being webcast through the company's website and will be archived there for future reference. Before we begin, I would like to caution listeners that comments made by management during the conference call will include forward-looking statements within the meaning of federal securities laws including the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve material risks and uncertainties, and the company's actual results may differ materially.

For a discussion of risk factors, including, among others, the risks related to COVID-19, the impact such pandemic may have on the company's business operations, financial operations and results of operation. And the company's ability to respond to the related challenges, including those noted in this morning's press release, please refer to PDS Biotech's SEC filings.

Investors, potential investors and other listeners are urged to consider these factors carefully in evaluating the forward-looking statements and are cautioned not to place undue reliance on such forward-looking statements. In addition, the content of this conference call contains time-sensitive information that is accurate only as of the date of the live broadcast, August 13, 2020. Except as required by law, the company undertakes no obligation to revise or update any statements to reflect events or circumstances that take place after the date of this call.

Please be advised that since we are in the middle of a previously announced public offering, we will not be taking questions at the conclusion of the call today. Please refer to the prospectus for further information. With that, I would now like to turn the call over to Dr. Frank Bedu-Addo. Frank?

Thank you, Deanne, and welcome everyone to PDS Biotech Second Quarter 2020 Earnings Conference Call. This past quarter, we made significant progress across both our immuno-oncology and infectious disease programs despite the challenging environment for clinical trial operations due to the global COVID-19 pandemic.

On last quarter's earnings call, we reported that we were planning and looking forward to initiating Phase II clinical development of our lead program, PDS0101.

We also announced our intention to broaden our infectious disease programs to include the development of vaccines for both COVID-19 and universal influenza. Let me quickly summarize the progress that has been made since our last report. The first of the 3 planned Phase II trials of PDS0101 was initiated in June in advanced HPV-associated cancers and is recruiting according to schedule. We announced a clinical collaboration to perform a second Phase II study of PDS0101 in advanced localized cervical cancer at the MD Anderson Cancer Center. This trial is due to be initiated in the next few weeks. An award from the NIAID has been granted to fund preclinical development of the Versamune based universal flu vaccine.

Promising preclinical data from our COVID-19 vaccine has been generated and discussions with the FDA regarding our data package and clinical strategy have also been initiated. The second COVID-19 vaccine is being developed in partnership with the Brazilian company Farmacore with preclinical funding received from Brazil's Ministry of Science, Technology, Innovation and Communication.

I will now provide you with some detail on our various programs. I'll start with our ongoing oncology activities. In our oncology portfolio, as I mentioned, we were pleased to initiate the first of 3 currently planned Phase II clinical studies of our lead product, PDS0101, focused on the treatment of various advanced HPV-associated cancers. Some of you may be aware of the fact that design and initiation of this Phase II trial was the result of independent preclinical studies performed at the National Cancer Institute combining PDS0101 with 2 clinical stage immunotherapeutic agents owned by EMD Serono. M7824, which is a bifunctional checkpoint inhibitor and NHS IL-12, which is a tumor-targeted cytokine. These preclinical NCI studies demonstrated strong synergy between the 3 agents, leading to enhanced anti-cancer efficacy in animal models. The results of this novel triple combination study were recently published in the journal for the immunotherapy of cancer. We are pleased to have this NCI led Phase II clinical trial underway as we believe that this novel immunotherapeutic triple combination has the potential to form the basis of a therapeutic platform applicable to the treatment of multiple different solid tumors.

Dr. Wood will provide additional details on this Phase II clinical study. On June 4, we announced a second PDS0101 Phase II clinical trial to be conducted at the University of Texas MD Anderson Cancer Center in Houston. This clinical study is being performed in collaboration with the lead investigator, Dr. Ann H Klopp, M.D., Ph.D., who is Associate Professor of Radiation Oncology. And this study will investigate the safety and cancer outcomes of a combination of PDS0101 with the standard of care, which is chemo radiotherapy. The study will also evaluate the correlation of safety and tumor regression with specific biomarkers of immune response in patients with locally advanced cervical cancer.

We believe that this PDS0101 combination has strong potential to demonstrate enhanced clinical benefit to patients with locally advanced cervical cancer over standard of care chemo radiation therapy. We expect the study, which, as I mentioned earlier, is the second of 3 currently planned PDS0101 trials, to be initiated in the next few weeks barring any unforeseen events. On April 16, we announced that the initiation of the multi-site Phase II versatile 002 trial evaluating the combination of PDS0101 and standard of care KEYTRUDA has been delayed due to the severe adverse impact of the COVID-19 pandemic on cancer trial operations.

We have remained in close contact with our VERSATILE-002 clinical sites, and we are currently evaluating the possibility of reopening the trial in the near future. This clinical trial, when initiated, will be the third PDS0101 Phase II trial. Now it is important to note that the VERSATILE-002 trial is quite unique among immuno-oncology studies in that this immunotherapeutic formulation addresses first-line treatment of recurrent or metastatic cancer. As the first-line of treatment, this means that these patients will have the opportunity to take KEYTRUDA and PDS0101 without having been previously treated with chemotherapy. We believe the addition of PDS0101 to KEYTRUDA has strong potential to enhance clinical efficacy in the first-line treatment of this disease, and we look forward to initiating the study as soon as reasonably feasible. PDS Biotech, as you may have noticed, has implemented a comprehensive strategy of combining our lead immunotherapy PDS0101 with standard of care or other equally promising immunotherapeutic agents with the goal of providing high quality and improved therapeutic options to cancer patients. Each of the 3 currently planned PDS0101 Phase II trials has been partnered with a world-renowned leader in the oncology field. Each one of these Phase II trials will provide preliminary efficacy of the PDS0101 combinations, and we look forward to progressing and reporting on the clinical outcomes of these novel combinations in the future.

Now moving on from PDS0101 to our broader oncology pipeline. Earlier this year, we announced the expansion of an existing cooperative research and development agreement with the National Cancer Institute to include preclinical and clinical studies of our PDS0103 immunotherapy. PDS0103 combines the Versamune platform with novel small peptide sequences of the tumor-associated protein known as Nielsen 1 or MUC1. These peptides are modified from the native sequences to be more strongly recognized by the human immune system. These novel proprietary MUC1 peptides were developed by the National Cancer Institute. MUC1 is highly present or expressed in multiple tumor types, including ovarian, breast, colorectal and lung cancers. And its presence in the tumor is often associated with drug resistance and poor disease prognosis. PDS0103 is designed to train the T cells to recognize the MUC1 protein and to activate the trained T cells, attack and kill the MUC1 expressing tumor cells. Under this expanded collaboration agreement, The National Cancer Institute will initially evaluate PDS 103 in combination with other immunotherapeutic agents in preclinical studies with potential progression into a human clinical trial under the collaboration agreement. Our comprehensive strategy of partnering with some of the leading experts in the field of cancer immunotherapy has provided us with the opportunity to efficiently expand and progress our verse immune-based oncology pipeline towards proof -- to its efficacy proof-of-concept in several cancer indications.

As I mentioned earlier, in addition to the progress made with our immuno-oncology pipeline, we have also made significant progress with our infectious disease portfolio. We have taken a very similar partnering approach with expert institutions to efficiently develop a robust pipeline of VERS immune-based preventive vaccines for tuberculosis, influenza and COVID-19.

As you may recall, in February of this year, we announced an amended research and development collaboration between PDS Biotech and the Brazilian company Farmacore to develop a Versamune based preventative vaccine for tuberculosis.

Initial vaccine testing has demonstrated promising preclinical results. Formulation development continues at PDS biotech with further preclinical animal testing to be conducted by Farmacore. In April, we announced that PDS Biotech would be expanding our infectious disease pipeline beyond the TB vaccine. Over the last 4 months, we have added 3 vaccines to our infectious disease pipeline, of which 2 out of the 3 are partnered. Of note is the fact that we are applying our Versamune technology platform to the development of what we refer to as the next-generation T-cell inducing COVID-19 vaccine.

Despite the current focus on the development of antibody inducing vaccines, recently emerging data on this global pandemic has highlighted the important role of T cells in COVID-19 immunity. And the importance of developing COVID-19 vaccines capable of generating high levels of active virus-specific T cells in addition to neutralizing antibodies in order to potentially achieve more durable protection against COVID-19 infection.

We recently reported preliminary preclinical results from our COVID-19 vaccine candidate, PDS0203, which demonstrated rapid induction of both killer CDH T-cells and helper CD4 T-cells in addition to neutralizing antibodies. These strong immune responses occurred within just 14 days of vaccination.

Dr. Lauren Wood will review the preclinical data for PDS0203 in more detail momentarily. The promising preclinical data for PDS0203 allowed us to initiate discussions with regulatory agencies and receive feedback regarding the clinical development plan. We continue to be engaged in discussions with other governments and nongovernment organizations regarding our strategy of applying Versamune to the development of a simple, safe and effective COVID-19 T cell inducing vaccine.

In June, we announced the expansion of our development collaboration with Farmacore to advance PDS0204, a second T cell activating next-generation COVID-19 vaccine candidate, combining our Versamune platform with a Farmacore developed novel recombinant SARS COV2 protein.

Under the newly expanded agreement, PDS and Farmacore are working to rapidly accelerate development towards Phase I clinical testing in Brazil with initial preclinical funding support provided by Brazil's Ministry of Science, technology, innovation and communication.

We believe this collaboration will allow us to quickly assess the efficacy of PDS0204 to reduce the continuing spread of COVID-19 infections. I will now switch from COVID to flu.

In June, we announced that Professor Gerald Woodward, a collaborator at the University of Kentucky School of Medicine was recently awarded a grant by the National Institute of Allergy and Infectious Diseases, NIAID, to accelerate development of PDS0202, a Versamune based universal influenza vaccine that induces both antibody and T-cell responses against multiple strains of the flu virus. This award provides further validation of the promise of the Versamune platform to provide a durable, broadly protective and potentially longer-lasting vaccine against multiple strengths of influenza. We look forward to continuing our discussions with NIAID as preclinical development work at PDS biotech and the University of Kentucky advance toward Phase I human clinical trials.

We believe that these recent collaborations and government grants provide us with the financial resources to continue with the development of our infectious disease portfolio and also enhances our scientific partnerships. We look forward to strategically advancing both our oncology and infectious disease pipelines through clinical development, and towards future commercialization.

Moving on to our financial position. Most of you may know that the company just completed a $16.5 million financing. Our strategy of partnering with experts has provided us with the unique opportunity to build a robust pipeline of cancer therapies and infectious disease vaccines with financial efficiency and the ability to limit the use of the company's financial resources. It is extremely important for the company to have the financial resources to optimize the value of our portfolio and to advance some of these products to clinical data generation and proof of concept. This raise is quite important, especially considering the market volatility and uncertainties created by COVID-19 and other factors by providing the company with the necessary financial runway. Barring any unforeseen or unusual events, this allows the company to focus on our product development and provides us with the resources to advance all 3 currently planned PDS0101 Phase II clinical trials through initial data generation.

Michael King, PDS's Biotechnology's interim CFO, will provide additional information on the company's financial position.

I would now like to hand the call over to Dr. Lauren Wood, our Chief Medical Officer, to discuss recent clinical updates in our oncology and infectious disease pipelines.

Thank you, Frank. And once again, welcome, everyone, to this morning's conference call. As Frank mentioned in his opening remarks, we have made significant progress over the past few months in both our immuno-oncology and infectious disease pipelines. The recent initiation of our Phase II clinical study with the National Cancer Institute for our lead candidate, PDS0101 as well as our continued preclinical work in COVID-19 and influenza, continue to demonstrate our commitment to building a strong repository of clinical and scientific data on our Versamune platform while progressing the products through clinical development to successful commercialization.

Before I review our recent clinical advancements, I'd like to provide a quick overview of how the Versamune technology platform works. Our product pipeline is based on combining our proprietary Versamune T cell activating technology with tumor or virus associated proteins to enhance their recognition by the human immune system. Versamune effectively delivers these disease-specific proteins, called antigens, to the immune system for effective uptake and processing, while simultaneously activating the critical Type 1 interferon immunologic pathway. These 2 important activities result in a generation of potent disease-specific killer T-cells as well as neutralizing antibodies. Activated disease-specific T-cells are of critical importance in both immuno-oncology and infectious disease as these activated T-cells have the ability to identify and kill both cancer cells as well as virus infected cells and to provide long-term immune memory. We believe that Versamune overcomes many of the key limitations of current therapeutic and prophylactic approaches in generating these powerful disease attacking killer T-cells. Likewise, Versamune's demonstrated ability to activate the preventative or defensive arm of our immune system by rapidly generating neutralizing antibodies, also provides for near-term protection from infectious pathogens. The ability to rapidly generate these broad and potent immune responses that include both killer T-cells and antibodies presents an important opportunity to develop new vaccines and treatments to improve disease outcomes. I'll now turn to the multiple recent study initiations for our lead oncology candidate, PDS0101.

As you may remember, PDS0101 is a combination of Versamune with a proprietary mix of short proteins from human Papillomavirus 16, the most virulent and high-risk type of HPV associated with the development of cancer.

In June, we were very pleased to announce that the National Cancer Institute had dosed the first patient in a Phase II clinical study of PDS0101 in combination with 2 immunomodulating agents, the novel bifunctional checkpoint inhibitor, m7824 and an antibody conjugated cytokine calls NHS IL-12. This study will enroll approximately 30 patients with advanced HPV associated cancer. And its primary endpoint is to evaluate the objective response rate of this novel triple combination in head and neck, cervical, anal and other HPV related cancers.

The first 8 patients will be evaluated for safety and objective response before the trial expands to full enrollment. We believe this clinical study, based on the published preclinical data of the triple combination, represents a critical next step in validating Versamune's ability to induce high levels of tumor-specific CD8 killer T-cells and that this combination has the potential to significantly improve clinical outcomes for patients with recurrent metastatic HPV associated cancers.

We look forward to providing updates as this trial progresses. As Frank mentioned earlier, PDS Biotech and MD Anderson Cancer Center are preparing to initiate a trial to evaluate PDS0101 in combination with standard-of-care chemo radiation -- chemo radiotherapy -- for treatment of advanced localized cervical cancer. This second combination trial to be conducted in approximately 35 patients will investigate the safety and preliminary antitumor activity of the PDS0101 chemo radiation therapy combination and its correlation with various important biomarkers of immune response. We believe that PDS0101's demonstrated ability to activate the immune system to induce tumor targeting killer T-cells provide strong potential to improve treatments to patients with cervical cancer. Finally, we have been in frequent communication with our clinical sites regarding our VERSATILE-002 study of PDS0101 in combination with KEYTRUDA that was paused in the early months of COVID-19. Sites have implemented institution specific measures to ensure the safety of patients and staff as well as the conduct of clinical research studies despite the ongoing pandemic.

On the study, patients will receive a total of 5 cycles of combination therapy in the context of standard of care KEYTRUDA therapy, administered every 3 weeks until disease progression. Although many oncology clinical studies were paused, patient's needs for novel cancer treatment options for recurrent metastatic disease did not. We anticipate being able to reactivate this study by year-end and remain optimistic about the study's contribution to confirming PDS0101's ability to enhance standard-of-care treatments for patients with advanced cancers.

Now I would like to summarize our work in the development of a next-generation COVID-19 vaccine. We recently announced preclinical data for PDS0203, which pairs our Versamune platform with a recombinant protein derived from SARS COV2, the virus that causes COVID-19. The SARS COV2 protein includes sections that induce an antibody response as well as sections that are recognized by CD8 and CD4 T cells. Recent research has highlighted the important role that our T-cells may play in providing protection against COVID-19. This emerging knowledge highlights the importance of developing vaccines capable of generating high levels of virus specific CD8 and CD4 T-cells in addition to neutralizing antibodies to potentially achieve more durable protection against COVID-19 infection.

In preclinical studies, PDS0203 demonstrated rapid induction of highly potent virus specific CD8 killer and CD4 helper T-cells as well as neutralizing antibodies. Importantly, these preclinical studies also demonstrated induction of long-lasting virus specific memory T-cells, which are essential for long term protection. Specifically, PDS0203 demonstrated a 30- to 45-fold increase in COVID-19 specific T-cells by day 14 when compared to the SARS COV2 protein without Versamune. These preclinical studies also confirmed that the induction of strong anti SARS COV2 neutralizing antibodies within 14 days of vaccination, a 20- to 25-fold increase over the vaccine without Versamune.

Importantly, the levels of these neutralizing antibodies at day 14 were comparable to those observed in hospitalized COVID-19 patients. Lastly, these preclinical studies showed a further substantial increase in neutralizing antibody levels up to 30 days after vaccination. These preclinical data demonstrate PDS0203's ability to rapidly induce high levels of both protective antibodies and long-lasting virus specific T-cells against COVID-19. We're hopeful that these results demonstrated in the preclinical studies will translate well to humans.

Our goal is to develop a next-generation vaccine that provides the breadth and level of immune responses necessary for a safe and effective vaccine with durable protection against COVID-19. We are optimistic that PDS0203 has the potential to clearly differentiate itself from other COVID-19 vaccines in development by providing a high level of virus specific killer immune responses and potential long-term protection against the virus. We remain committed to investigating this potential by quickly advancing PDS0203 into Phase I trials to confirm its ability to rapidly induce both killer T-cells and neutralizing antibody responses. We recently received feedback from the FDA on our preclinical and clinical development plan for PDS0203 and are currently working to incorporate their recommendations into our clinical trial design and additional preclinical studies.

The ability of Versamune to induce a broad range of antiviral immune responses is also being applied to the development of a universal flu vaccine, PDS0202. Upcoming PDS0202 preclinical studies are being funded by a grant from the NIAID, and we hope to complete these development studies in 2021 and then rapidly progress this program into human clinical trials.

I would now like to hand the call over to our interim CFO, Michael King.

Michael?

Thank you, Lauren. I would like to review our financial results for the 3 months ended June 30, 2020. For the second quarter of 2020, net loss was approximately $2.9 million or $0.19 per basic and diluted share compared to a net loss of approximately $3.9 million or $0.75 per basic and diluted share for the second quarter of 2019. Research and development expenses totaled approximately $1.4 million for the second quarter of 2020 compared to approximately $1.9 million the same period in 2019, a decrease of 26%. For the second quarter of 2020, G&A expenses were approximately $1.5 million compared with approximately $2.4 million for the second quarter of 2019, a decrease of 38%. Total operating expenses for the second quarter were approximately $2.9 million compared to total operating expenses of approximately $4.3 million for the same period in 2019, a decrease of 33%. As of June 30, the company's cash balance was approximately $16.9 million.

In addition, on Tuesday of this week, we announced pricing of a previously announced underwritten public offering, consisting of 6 million shares of common stock at a public offering price of $2.275 per share.

The gross proceeds from this offering are expected to be $16.5 million before deducting underwriting discounts, commissions and other offering expenses. In addition, we granted the underwriter, Oppenheimer & Co., a 30-day option to purchase up to 900,000 additional shares of common stock at the public offering price less the underwriting discounts and commissions. This offering is closing today, subject to customary closing conditions.

PDS Biotech intends to use the proceeds from this offering to fund working capital and general corporate expenses. As Frank mentioned earlier, we expect that this will provide us with the necessary financial resources to advance all 3 currently planned PDS0101 Phase II clinical trials through initial human clinical data. This concludes our financial statements. I would like to hand the call back to Frank for final remarks. Frank?

Thank you, Michael. Before we end the call, I would like to thank our dedicated team and clinical partners for all their work over the past quarter. The initiation of a Phase II trial in partnership with the National Cancer Institute and the upcoming Phase II clinical trial at MD Anderson Cancer Center, continue to validate our novel Versamune platform in the field of immuno-oncology. In addition, the recent grant from the NIAID for the development of a universal influenza vaccine and the financial support our partner Farmacore has received for the preclinical development of the COVID-19 vaccine, will help us to advance those programs rapidly towards human clinical trials.

Over the coming months, we look forward to reinitiating our Phase II combination trial of PDS0101 in KEYTRUDA, addressing first-line treatment of recurrent or metastatic HPD passive head and neck cancer. We also look forward to advancing our COVID-19 vaccine programs into clinical trials. The recent fund raise provides us with the financial resources to progress the development of our PDS0101 program through initial Phase II data.

Over the next 6 to 18 months, we also aim to progress at least 1 of our infectious disease pipeline products into human clinical trials. We aim to work diligently to deliver on multiple clinical milestones and thank our shareholders for their continued support. That concludes our prepared remarks. Thank you very much for joining us today.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.