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

Good afternoon, everyone, and thank you for joining the H.C. Wainwright 2021 Global Life Sciences Conference. My name is Michael Brotherton, and I'm on the corporate access team in H.C. Wainwright. While we are virtual this year, we're confident we're going to be able to provide value to you with over 425 companies presenting at this conference as well as be your interactions through one-on-one meetings. H.C. Wainwright is a full-service investment bank dedicated to providing corporate finance, strategic advisory and related services to public and private companies across multiple sectors and regions. We have a total of 18 publishing senior analysts and 493 companies covered across all sectors. Please visit hcwco.com for more information. From a logistics standpoint, please make sure to reference your virtual conference online portal that provides you individual links to your meetings and all presentations. Panels in all presentations are live and on-demand online from March 9 through 10. With that said, have a productive and enjoyable day. I'd like to introduce your presenter. I'd like to welcome Amit Kumar, President of Anixa Biosciences.

Thank you, Michael, and I want to thank H.C. Wainwright for enabling us to present at this conference. Let me begin with our safe harbor statement. And I also want to note that this presentation is being recorded on March 3, but will become available on March 9 and 10. So the comments that I'm making today are valid as of today's date, which is March 3. A little bit of background about our company. We are a Silicon Valley-based biotech with a strong cash position, no debt and we're executing a very capital-efficient business model. Under this business model, we are working with strategic partners who are primarily large and very reputable academic organizations to help develop our products. And our goal is to be able to develop these products with these partners and then eventually license them or sell them to additional larger pharma companies for completion of clinical trials as well as eventual commercialization. We want to focus on the areas where we are strong, which is primarily the innovation and then work with larger partners with infrastructure for completing clinical trials as well as manufacturing and then the infrastructure for sales and distribution of our products. These are some of our partners that are listed at the bottom of this slide. The 2 most important being the Cleveland Clinic and the Moffitt Cancer Center, which is where 2 of our upcoming clinical trials will be conducted. We have a portfolio of 4 projects. The first project, which is most -- the furthest along is a breast cancer vaccine technology, which was developed at the Cleveland Clinic and has been developed there for over a decade. We are the worldwide licensee of this technology. We are working with the Cleveland Clinic with funding from the U.S. Department of Defense to develop this technology. And very recently, we've just received our go ahead from the U.S. FDA to begin the clinical testing, which we anticipate will begin in the middle of this year, so about 3 to 4 months from now. And I'll get into a little bit more detail on each of these projects as we go through the back of the presentation. The second project is also an ovarian cancer vaccine -- is also a vaccine technology, in this case, specifically for ovarian cancer. This is also a technology that was developed at the Cleveland Clinic, and we are the worldwide licensee to this technology. We are working on developing this project to the point where we can eventually submit an IND application and then eventually take this project into the clinic. The third project on this -- in this portfolio is a CAR-T technology, CAR-T stands for chimeric antigen receptor T cell technology. It's a new type of immunotherapy that has some amazing things for certain types of leukemia and lymphoma patients. CAR-T has generated a tremendous amount of interest amongst the medical community as well as the investor community because of the success in these leukemias and lymphomas, primarily in being able to cure a large number of these patients. Unfortunately, CAR-T has not worked despite many attempts in any solid tumor indication. And we feel that there are certain nuances about our CAR-T technology, which we are developing at the Moffitt Cancer Center that will enable it potentially to be the first CAR-T technology that works in solid tumors. The fourth project on this slide is an infectious disease project. It's not an oncology project. As many of you know, when the COVID pandemic began about a year ago, many biotech companies that have the appropriate expertise began working on therapeutics, testing as well as vaccines for the -- addressing this particular disease. We've focused on developing a therapeutic, and I will get into a little bit more detail about that program as we go forward in this presentation. Let me begin by giving a little bit more detail on the breast cancer vaccine technology. As I noted, this was invented by a research team at the Cleveland Clinic, led by Vincent Tuohy -- immunologist, Vincent Tuohy. The basic premise is that there's a protein called alpha-Lactalbumin, which is utilized to produce mother's milk. So this protein only exists in the mammary glands of women -- of mammals and only during breastfeeding. So when a woman has given birth and is lactating, the protein exists to help produce the milk. Once the woman stops breastfeeding, the protein disappears until the woman has another chile. Eventually, after the age of childbirth, the protein completely disappears, never to be seen again in most women. However, for women who develop breast cancer, the cancer cells once they start forming start producing -- often start producing this protein. The basic idea here was that if we could immunize these women after the age of -- child-bearing age and train their immune systems to destroy cells producing this protein, when the cancer cells arise, they're producing this protein, the immune system will destroy those cells. The cancer cells will then not be able to duplicate and eventually become a tumor and will be able to gain critical mass and become a tumor. There's a fair amount of data that has been published on this technology. As I noted, the Cleveland Clinic has been working on this technology for over a decade. But the key experiment, which is the most compelling demonstration of the power of this technology is depicted on the right-hand side of this slide. This is an experiment where mice that were specifically designed to get breast cancer were given a vaccine -- the vaccine and an equal number of mice, same type of mice, were given a placebo. And what we found was that the mice that were vaccinated -- all of the mice that were vaccinated, not a single one developed breast cancer while the mice that were given the placebo, almost all of them developed breast cancer. This is a very compelling experiment that we want to reproduce in human beings as I've stated before, and as most of you know, being in the biotech sector, no matter how compelling the animal studies are, one has to prove the efficacy in human beings and we are in the process of developing or beginning the clinical trial to do just that. At the current time, we have received the go-ahead from the U.S. FDA to begin clinical trials, which will commence sometime middle of this year, June-July time frame. We will be performing 2 Phase I trials and focus on identifying -- or looking for safety as well as looking for immune correlates. We're looking for T cells and antibodies that our vaccine will induce in the women that have been vaccinated. And that will give us an indication of whether those immune correlates are powerful enough to be able to eliminate the cancer cells as they arise. And one of the key points about this technology is that the U.S. government is funding this, all of the preclinical studies, recent preclinical studies as well as the 2 Phase I studies. So this is just a summary slide of the key points regarding this breast cancer vaccine technology. I think the one thing that I would like to highlight is the size of the market. Obviously, virtually any women who wants to be concerned -- who is concerned about breast cancer is a candidate for this vaccine. We anticipate in the United States there are about 75 million women above the age of 40 that would be immediate candidates for the vaccine. And many millions of women age into that group on an annual basis and worldwide, the size of this market is even greater, in the billions of women. The next project similar to the breast cancer vaccine is the ovarian cancer vaccine project. This was also invented by Vince Tuohy at the Cleveland Clinic and his research team. Basic premise is similar: protein that's been identified is a protein that exists on the ovaries. But eventually, the protein goes away as a woman heads towards a menopause. Once a woman has reached menopause, that protein has disappeared, never to be seen again until a woman develops ovarian cancer. And those cancer cells are expressing this protein once again. So we would be vaccinating women after they've reached menopause. And when the cancer cells appear then, the immune system will destroy those cancer cells. So the cancer -- the ovarian cancer doesn't have the ability to gain critical mass and become a tumor. This program is about 1.5 years behind the breast cancer vaccine program, but we're equally as excited about this program. And in fact, the market opportunity for this program is just as big as the market opportunity for the breast cancer vaccine program. Our third program is what's known as a chimeric antigen receptor T cell technology. And as I noted at the beginning of this presentation, this technology has done amazing things for certain types of leukemias and lymphomas, but has not worked in any relevant efficacious matter in solid tumors. We think our technology has certain nuances that will enable it to be the first CAR-T technology that works on solid tumors. The technology involves taking white blood cells, specifically T cells, from individual patients and genetically engineering those T cells to become more powerful cancer fighters and reinjecting them back into the patient. For certain leukemias and lymphomas, B-cell diseases, this technology has cured a large number of patients. Not just increase their life expectancy by a few months, but actually cured them and eliminated any indication of disease, and many of these patients have been disease-free for years and years. So that's something that's very rare in cancer therapy for late-stage cancer patients. And that's why this technology has generated a huge amount of interest from the medical community as well as the investment community. Recently, there have been some multibillion-dollar acquisitions for companies that are developing this technology. Unfortunately, as I noted again, and I'm highlighting one more time, the technology has not worked -- this type of technology has not worked for solid tumors. Our approach involves taking some lessons from the successful CAR-T therapies that have worked in liquid tumors and applying them to solid tumors, in this particular case, specifically ovarian cancer, and utilizing some nuances of our technology that we think will make our technology a much more powerful immunotherapy against ovarian cancer. So just on the left-hand slide is a cartoon that describes this technology works for the B-cell lymphomas and leukemias for which there is good efficacy. The B cells have a protein on their surface called CD19, which is very unique to B cells. It doesn't exist anywhere else on any other organ system. When we take the white blood cells of an individual patient and engineer those white blood cells to go and target the B cells, we create on the surface of those white blood cells what's known as a chimeric antigen receptor, the CAR, which is an antibody fragment which is a homing mechanism that goes and finds the CD19 protein. Once the white blood cell, the T cell, finds that protein, it binds to the B cell and disclose that B cell, both healthy and diseased B cells. In the analog to that, in the ovarian cancer case, we've identified a protein called follicle-stimulating hormone receptor, FSHR, which is unique to the ovaries in women and unique to the testes in men. And this follicle-stimulating hormone receptor has a cognate ligand called the follicle-stimulating hormone, FSH. So when we engineer our white blood cells -- or patients' blood cells, we put on the surface of that white blood cell the follicle-stimulating hormone. And the benefit of that as a homing mechanism is that over millions and millions of years of evolution, follicle-stimulating hormone and the follicle-stimulating hormone receptor have become a very good, strong binding pair. So we feel that our homing mechanism is stronger because we take advantage of those years of evolution, and we think our white blood cells or T cells are going to be able to effectively find the ovarian cells and destroy them. The second attribute that we think will make the T cell therapy much more powerful has to do with the fact that the follicle-stimulating hormone receptor, while it's only found in women -- in the ovaries in women and in the testes of men, in other -- as shown on the left-hand portion of the slide, in other organ systems when a tumor develops, we've learned that the vasculature or the blood vessels of that tumor are expressing follicle-stimulating hormone receptor. And that's depicted here in this next slide on the right-hand side. The gray area can be thought of as a tumor in ovarian cancer or a lung cancer or breast cancer, prostate cancer, et cetera, et cetera. As these solid tumors develop and get bigger, they induce the body to create blood vessels throughout the tumor that allow nutrients and oxygen to be brought to the tumor and allow carbon dioxide and waste products to be removed from the tumor. The tumor needs these blood vessels to survive and get bigger. Now as I noted, the blood vessels within the tumor tend to have follicle-stimulating hormone receptor expressed on the inner lining, on the endothelial cells. If you move to the edge of the tumor and outside the tumor by even just a millimeter, those blood vessels do not have the follicle-stimulating hormone receptor expressed on the inside of the blood vessels. So what we think is going to be happening is that our CAR-T, in the case of ovarian cancer, will be attacking the ovarian cells directly, those gray cells, and will also be disrupting or destroying the vasculature, those blood vessels that are nursing those ovarian cells -- that ovarian tumor. And so this is a dual mechanism of action. You're attacking the cells directly and you're attacking the freeways that allow those cells to get their nutrients and remove the waste. So because it's a dual mechanism of action, we feel that this technology potentially will be the first CAR-T technology that will work in solid tumors. Now in other types of tumors besides ovarian cancer, so for example, lung cancer, prostate cancer colon cancer, et cetera, we feel that the CAR-T technology will be able to disrupt those blood vessels and destroy the ability of the tumors to get nutrient. And so hence, we feel that this technology will work not only in ovarian cancer, but also other types of solid tumors. We're obviously going to begin with ovarian cancer, but eventually we want to be able to evaluate this technology for other types of tumors. As I've noted before -- we've publicly stated that our goal is to file the IND application for the clinical trials in ovarian cancer by the end of this quarter, which is basically this month. And successive to that, when and if we get approval from the FDA to begin clinical trials, we will begin those trials. This is a project that we are working on with the Moffitt Cancer Center, which is where the clinical trials will commence. The last project is a non-oncology project. It's an infectious disease project, specifically focused on the SARS-Coronavirus-2 or COVID-19. As many of you know, when the COVID -- SARS-Coronavirus-2 appeared and began infecting large numbers of individuals, there was a fair amount of funding that was provided by the U.S. government through Operation Warp Speed and other programs to develop vaccines. And that has -- that program has been very successful, and we have a number of vaccines now with others in the pipeline as well. However, we and many others feel that there is still going to be a need for therapeutics. And so we've decided to evaluate a number of potential compounds that could be good therapeutics against COVID-19. I also want to say that in the early days of the pandemic, in the interest of trying to develop therapeutics as quickly as possible, companies looked at what they already had on the shelves and they tried to address the COVID-19 disease by using those repurposed drugs. So for example, remdesivir, which is the only antiviral drug that, to date, has been authorized by the FDA was originally a drug that was targeting Ebola. Unfortunately, it didn't work for Ebola but when COVID-19 appeared, Gilead decided to try it against that virus and it showed some success. It was not a panacea, but it showed some indication of reducing hospital stays. However, it didn't improve mortality or other attributes of the disease. So we've decided, however, to step back and start from scratch. Rather than repurposing a drug that was designed for another virus, we decided to understand and study the specific machinery or enzymes of the SARS-Coronavirus-2, enabling us to identify compounds that would potentially be able to disrupt the function of those enzymes or the machinery of the SARS-Coronavirus-2. We took a lesson from the development of antiviral drugs for other diseases, other viral diseases like HIV, for example. And we began by doing in silico screening, meaning computer screening using various algorithms to determine if a library or several libraries of over 1.2 billion compounds could potentially inhibit the function of certain enzymes in the virus. To make the long story short, out of that 1.2 billion compounds, we have culled the list down to 2 specific compounds that we found to be the most potent compounds. Those compounds among -- as well as others were synthesized and tested in biological assays, and the 2 that we chose were the most potent and we are testing those compounds in animal studies right now and the data should be available within a matter of weeks. Successive to the animal studies, if 1 or both of those compounds show good potency in animals, then our plan is to even --to do a little bit more medicinal chemistry on the specific compound and evaluate whether we can make them even more potent and then eventually take them to pre-IND-enabling studies that will lead to clinical trials in human beings. So this program is a little bit further behind -- or earlier stage, I should say, from an R&D standpoint than our other -- than our oncology programs. However, this is a very high-profile program because of the pandemic. And for my last slide, I'm not going to read each of these bullet points. But I think over the next few months, these specific activities as well as milestones we are hoping to achieve that we feel will enable us to become a much higher profile biotech company. Right now, our market cap is about $130 million, but we have every asset of ours in our portfolio is a preclinical asset. By the end of this year, we will have 2 clinical assets, clinical-stage assets, and we think there will be a -- that will enable an inflection in our valuation of the company to dramatically higher levels. And then eventually, when we start showing human data, and if that data looks good, for the 2 clinical programs, we feel that there will be a tremendous amount of interest from investors in what we are doing. Thank you very much.

Thank you, Amit. I want to thank all of our presenters for taking part in what has been a very productive and informative series of presentations. We appreciate the time and effort that went into preparing them. Hopefully, our next conference will be one that we can hold in person rather than virtually. But in the meantime, we're very grateful for your flexibility and your presence online this year. Thank you, again, from the H.C. Wainwright team.