Anixa Biosciences, Inc. (ANIX) Earnings Call Transcript & Summary

Good afternoon, everyone. My name is Andy D'Silva, I'm a senior health care analyst at B. Riley. Thanks for joining us today. Our next session will be a fireside chat with Anixa Biosciences' CEO, Dr. Amit Kumar. Dr. Kumar, thank you for joining us today. Before we jump into the fireside chat, I'd like to give you 5 minutes or so just to give a snapshot of Anixa, so the audience has some context when we delve into our discussion.

Thank you, Andy. Thank you for inviting us to present at this conference. So Anixa is a small, publicly traded biotech company located in the Bay Area, California. We are executing a very unique business model, where we work with academic and other partners to develop our products. We work with these organizations to enable us to access infrastructure that they have, which includes laboratory facilities and personnel, enabling us to work with them on very orthogonal projects, meaning we can work on very different types of projects because we access expertise that is different at each academic institute. This enables us to be very capital efficient, having -- not having us -- not requiring us to build a very expensive laboratories and hire very expensive staff, yet we continue moving our products forward. Eventually, the plan is to get these products to a stage where they can be either sold or licensed to larger pharmaceutical companies that have the capital and infrastructure, manufacturing and sales and marketing to be able to commercialize those products, with us receiving a revenue share. We have a strong balance sheet. We have over 2 years of cash, no debt. And as I noted, we're executing this very capital-efficient business model. We are working on 4 different projects. Two of those are prophylactic vaccine projects. They are one for breast cancer and one for ovarian cancer. Both of these projects are being worked on in collaboration with the Cleveland Clinic, which is -- you may know, is one of the top academic and top research hospitals in the world. We have a third project, which is a CAR-T project addressing ovarian cancer as well as eventually refill other types of solid tumors. And that project is being worked in collaboration with the Moffitt Cancer Center, which is, again, also 1 of the top 10 cancer centers in the country. And we have a third project, which is an infectious disease project. And when I mentioned earlier that we are able to work on orthogonal projects, this is a case in point. Even though we are working on a number of cancer projects, we're also working on an infectious disease project because we're working with different partners that have different expertise. And that infectious disease project is focused on therapeutics for the COVID-19 pandemic.

Okay. Great. And that's a very useful context, so let's just jump right into it. Anixa and the Cleveland Clinic recently received clearance for your breast cancer vaccine candidates IND for triple-negative breast cancer. Can you give a quick overview on the Phase I and also what the path would look like to obtain an approval in the future?

Yes. So that's correct, Andy. We just recently received the clearance from the FDA on our IND. And that enables us to begin the process of establishing a new clinical trial, which we anticipate beginning in -- sometime in Q2 of this coming year -- of this year, I should say. The process -- the breast cancer vaccine program is focused initially on triple-negative breast cancer, but we believe that it will work on other types of breast cancer as well. The Phase I study -- there will be 2 Phase I studies, and both of these are funded by the U.S. government. So that's a great benefit to both us and the Cleveland Clinic. And these studies will address triple-negative breast cancer. We are looking for -- after immunization of women, we are going to be looking for what we call immuno-correlates. We're going to be looking for induced T cells as well as antibodies that target the specific protein that we're addressing with this particular type of breast cancer. And obviously, these women, before immunization, don't have these antibodies and T cells. But after we vaccinate them, we see these antibodies and T cells arise that will indicate to us that the vaccination process is working as we expected and as we saw in the animal studies and which were very, very compelling. With regard to approval, obviously, there's going to be -- assuming Phase I goes well and we see the appropriate immune response, we will go into Phase II to finalize dosage as well as safety. And then Phase III will be a longer-term, much bigger study that will involve a large number of women who will get the vaccine and an equal number of women who will receive a placebo. And we'll watch how many women in each group get breast cancer. So that study could take some time, on the order of 2, 3 years or so. Our plan is to monetize this asset by licensing it to one or more pharma companies that are interested in eventually commercializing the product and helping us with the very extensive and long-term Phase III study. So I think a lot of people have recently learned how vaccines are developed simply because of the recent activity with the COVID-19 disease. And so this is going to be similar to that in the sense that the initial phase will look for the antibodies and T cells, and we're hoping that we get antibodies and T cells in 100% of the women that we immunize. Indications with the animal study says that that's what we'll see if we see the same results that we've seen in animals. And then eventually, the Phase III study is an event-driven study. You simply give the patients -- you immunize the patients and the trial participants, and then you provide the similar number with placebo, and you watch. And eventually, once you have 50 to 100 or so individuals that develop cancer, hopefully all in the placebo arm as opposed to the vaccine arm, the ratio of the number that developed cancer in the placebo arm versus the vaccine arm is what determines how efficacious the vaccine is.

Absolutely. That makes a lot of sense. Just cancer vaccines to date haven't been an area that's seen substantial success. Can you give us color on how your approach is different and where you are building confidence from?

Yes. That's a good point, Andy. Most cancer vaccines address tumors that have already developed. The idea there is that a tumor has developed in -- for a good example, in the breast cancer in breast or any type of cancer. And then when -- and vaccinates that patient to try and develop an immune response against a particular protein of that tumor. And the goal is that the immune system will respond in a more aggressive fashion against that tumor after the vaccination. The problem is that once the tumor has developed, the tumor has a number of different mechanisms that enable it to evade the immune system. And the whole area of immunotherapy is an approach to try and stop the tumor from evading the immune system. A tumor is very good at evading. And as a result, trying to vaccinate after tumor has gained critical mass and often has spread or metastasized, it's virtually impossible to try and destroy not only the primary lesion but the metastatic lesions. In our case, we're -- this is a prophylactic vaccine. This is similar to the vaccines that we use or various infectious diseases like smallpox or polio or in the case of -- recent case of COVID. What we do is we address a protein that seems to arise when normal cells become cancerous. And we target that protein so that the immune system -- we teach the immune system to target that protein so that when the cancer arises, and it's 1 cell or 2 cells or a few hundred cells before the tumor gains critical mass, the immune system destroys that -- those cells. And it's much easier for the immune system to destroy those cells when those -- the number of those cells is small. So we feel, and this was proven in the animal studies, that we won't even enable the tumor to gain critical mass. Those cells that become aberrant will be destroyed immediately by the immune system.

And so the vaccines that you have right now are utilizing the retired protein target approach. And it seems very differentiated relative to what I've seen previously. Have there been any successes you can point to with other vaccines or even therapeutics that are further along and have leveraged a similar retired protein approach as well?

Yes. The concept of retired proteins is similar to other types of concepts addressing specific targets, but it's relatively new for the vaccination approach. However, it's very similar to the concept of vaccination against infectious diseases. In the case of infectious diseases, you target a protein of the virus or the bacteria. And that's relatively easy because the bacteria or the virus comes from outside your body, and those proteins tend to be unique. In the case of cancer, because these proteins are -- become mutated from normal proteins, the mutations make them a little bit different than the normal proteins but not differentiated enough. And so what the strategy in the past has been is to address proteins that are overexpressed in tumors. So in the case of breast cancer, for example, HER2/neu, which is a target of Herceptin, people have tried to target HER2/neu through vaccination. Unfortunately, HER2/neu exists on other cells of the body as well. The concept of the retired protein is that this retired protein only shows up on the tumor. In the case of breast cancer, for example, what we do is we've identified -- or I should say the Cleveland Clinic researchers have identified a specific protein called alpha-lactalbumin that exists only in the breast and only exists during lactation. So when a woman is breastfeeding -- has had a child and is breastfeeding, that protein is expressed in the breast because it's necessary to produce breast milk. But once the woman stops breastfeeding and is no longer going to have another child, that protein completely disappears. What the researchers of Cleveland Clinic discovered, and this is a gentleman named Vince Tuohy, a visionary immunologist, and his research team, what they discovered is that when years later, when cancer cells arise in the breast, that protein is expressed once again. So the concept here is that, that protein is retired after all lactation is completed, but it shows up again later on in cancer and at no other time in life. So after the age of child birth, after a woman has given birth to all the children that she wants, maybe at the age of 40 or the age of 45, if we immunize these women against this protein, what happens is that when this protein shows up again, which only occurs now when cancer arises, the immune system will destroy those cells as they arise and, hence, destroy the cancer and not enable the cancer to gain critical mass.

Yes. And I mean that would be like ideal age too given, I think, the amount of patients that actually faced cancer after that age. So that seems to make a lot of sense. I think your ovarian cancer vaccine candidates is earlier in development but is leveraging a very similar methodology. Can you please just give a quick overview of that candidate as well?

Yes. That's exactly right. It use -- utilizes a similar retired protein hypothesis. In this case, we've identified a protein that is -- existed on the ovaries all throughout a woman's life but starts to decline in concentration as she approaches menopause. And upon moving past menopause, that protein disappears. And -- however, when a woman develops ovarian cancer, the most common form is epithelial ovarian cancer, that protein starts getting expressed again. So again, the concept here is to immunize against that protein. And then once the woman has passed menopause, immunize this protein once -- immunize against this protein once the woman reaches menopause. And then when cancer arises, if it arises in that woman, the immune system will destroy those cells similar to the breast cancer situation. And as you noted, in the case of breast cancer, most breast cancers occur in women over 45, although there are some that occur in younger women. And in the case of ovarian cancer, most ovarian cancers occur primarily in women post menopause. So this will address most of those women.

Okay. Not to move too fast here, but I think it's important that we also focus on your cell therapy programs. You mentioned that Anixa is collaborating with Moffitt in engineering and looking to file an IND for your CAR-T program. Can you let us know where you are in the development process there and what the next steps and the upcoming milestones are for your cell therapy?

Yes. Yes. That's a very exciting program. As you may know, cell therapy or, specifically in this case, CAR-T cell therapy has done some amazing things with certain types of leukemias and lymphomas. But CAR-T therapy has not been successful in any type of solid tumor in any clinical sense. We think that certain nuances about our CAR-T therapy will make it successful in solid tumors, specifically beginning with ovarian cancer, but we think other types of cancers as well. This program is expected to go into the clinic this year. We anticipate filing the IND application for that program this quarter. And so we'll have 2 clinical programs operating this year, which is a very exciting time for Anixa. This specific cell therapy program focuses on a protein that exists on ovaries called follicle stimulating hormone receptor, FSHR. FSHR shows up in the ovaries in healthy and cancerous women but nowhere else, no other important organ system. So when we target that protein with our engineered T cells, which is what the approach for CAR-T, we're only targeting the ovaries. The interesting thing about this receptor, follicle stimulating hormone receptor, is that it also shows up on the vasculature of tumors. So in the case of ovarian cancer, follicle stimulating hormone receptor is expressed on the endothelial cells or the inner lining of the vasculature blood vessels that are supplying nutrient to the tumor. So what we're doing is we're not only attacking the ovary cells, but we're also attacking the blood vessels in the cancerous ovarian lesions, not only the primary lesions but also metastatic lesions. And the second characteristic of this receptor, which is the expression on vasculature, we feel it will enable us to attack multiple other types of cancers. So for example, as I noted earlier, follicle stimulating hormone receptor only shows up in the ovaries in women. And in the men, it only shows up on the testes. But when tumors develop, neoplasias develop in other organ systems like the lung or the prostate, liver, et cetera, the blood vessels that are supplying nutrient to those tumors all express follicle stimulating hormone receptor. It's not completely understood why, but those receptors are there. And if you move a little bit outside the tumor, the blood vessels don't show that receptor anymore. So it's only within the tumor that those blood vessels have that receptor. So what we anticipate is that these T cells that we're creating, engineering, will destroy the vasculature of other types of tumors like lung cancer, prostate cancer, et cetera, et cetera. We have yet to prove that in humans, but we will try and do that after we've tested it out in ovarian cancer in humans. So in principle, we feel that if it works in ovarian cancer, that there will be some efficacy through this anti-angiogenic phenomenon for other types of tumors. Let me just finish up the question that Andy asked, which was what are the milestones. I think a very -- we received FDA clearance to begin the breast cancer vaccine trial, and we anticipate beginning that in Q2. In Q1, we anticipate filing and hopefully receiving clearance for -- from the FDA on our IND for the CAR-T trial. And then with regard to our infectious disease program, we anticipate beginning animal studies. In fact, we've identified 2 compounds which we think are very powerful. One of those compounds is comparable to remdesivir, which is the only antiviral that has been approved against the COVID-19 -- the SARS-CoV-2 virus. And we expect, in fact, both of those compounds are going to be in animal studies within the next week or so. And we anticipate receiving -- seeing the data on that within the next few weeks, and we'll report on that obviously. So that's a very exciting program as well, which I don't think we'll have time during this presentation to discuss, but that is a key milestone. The ovarian cancer vaccine program is at the R&D stage, and we are working on a number of things there, including seeking some alliances with some U.S. government agencies to help move that forward even more -- even faster than it is at this current time. So that's the status. I think that I'll conclude. Please stay tuned. And thank you, everyone, for attending this presentation.