GeoVax Labs, Inc. (GOVX) Earnings Call Transcript & Summary

Good afternoon, and welcome, everyone, to the GeoVax Third Quarter 2023 Corporate Update Call. My name is Mandeep and I will facilitate today's call. With me are David Dodd, Chairman and CEO; Mark Reynolds, Chief Financial Officer; Kelly McKee, MD, MPH, Chief Medical Officer; and John Sharkey, PHD, Vice President, Business Development. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I'm turning the call over to Max Gadicke of Stern IR.

Thank you. Please note the following. Certain statements in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors including weather, GeoVax can develop and manufacture its product candidates with the desired characteristics in a timely manner and such products will be safe for human use. GeoVax's vaccines will effectively prevent targeted infections in humans. GeoVax's product candidates will receive regulatory approvals necessary to be licensed and marketed. GeoVax raises required capital to complete development of its products. There is development of competitive products that may be more effective or easier to use than GeoVax's products. GeoVax will be able to enter into favorable manufacturing and distribution agreements and other factors over which GeoVax has no control. GeoVax assumes no obligation to update these forward-looking statements and does not intend to do so. More information about these factors is contained in GeoVax's filings with the Securities and Exchange Commission, including those set forth at Risk Factors in GeoVax's Form 10-K. It is now my pleasure to introduce the Chairman and CEO of GeoVax, David Dodd.

Good afternoon, and thank you for participating in the GeoVax corporate update call. This year, and more specifically during the third quarter, we have successfully advanced the progress of our developments focused on the 2 Phase II clinical stage products while also advancing other critically important initiatives. Today, we'll address the progress status and plans related to Gedeptin, currently in development as a therapy against advanced head and neck cancer and GEO-CM04S1, our next-generation COVID-19 vaccine. But first, I want to address the strategy behind our activities and why we are confident that we're on a course that will build significant shareholder and stakeholder value while delivering critically important differentiated products to improve lives worldwide. Following my comments, Mark Reynolds, our CFO, will provide an update of our financials and then your questions will be addressed. Our strategy at GeoVax is to develop innovative cancer therapies and infectious disease vaccines that provide meaningful differentiation addressing critically important unmet medical needs, pursuing initial indications that support expedited registration pathways. We anticipate worldwide development, commercialization, distribution via business partnerships and collaborations. In other words, our strategy is reflected as innovate, differentiate, accelerate and collaborate. It is this strategy that dictates our activities now and continuing through 2024. We are focused on our priorities in order to successfully implement our strategy. It is critically important that we advance through catalysts and milestones that demonstrate the differentiated value of our developments while strengthening the confidence and support from our investors and other key stakeholders. In addition, we're addressing opportunities that provide us a basis for achieving leadership within those targeted patient areas and commercial markets. That's why our current clinical safe products, Gedeptin and GEO-CM04S1 provide us the potential of achieving leadership in those respective populations. These represent areas where much larger competitors either aren't addressing such patients, perhaps due to the relatively small size of those opportunities, such as the case for advanced head and neck cancer or their technologies are inadequate to address their respective patient populations such as immunocompromised patients relative to the current authorized COVID-19 vaccine. Also GEO MVA, our vaccine against Mpox and smallpox is intended to disrupt the existing monopoly in that important area, providing us leadership as the first U.S.-based supplier of such a vaccine. I'll reiterate that since we hold worldwide rights for our products, we are highly focused and engaged in discussions to ensure worldwide access and commercialization. Finally, we realized that adaptability to changing market conditions, emerging competitors and other challenges is required to achieve and maintain sustainability and success. The principles of focus, leadership and adaptability are the foundation for implementing our strategy and progressing to successful growth and development. This is not only relevant to our portfolio development activities, but also relative to our financing strategy, which includes equity proceeds, nondilutive funding opportunities and capital resulting from business development activities. We believe that having this multipronged strategy relative to capital development provides us the ability to continue to support our development priorities in the current challenging economic market environment. The vast array of unmet medical needs within oncology represents significant opportunities to advance novel approaches addressing various cancer patient needs worldwide. Increasingly, we are participating in various oncology conferences, some of which we expect to present at Gedeptin clinical data and with others conduct partnering discussions. Gedeptin is based on a novel patented technology for the treatment of solid tumors through a gene therapy strategy known as gene directed enzyme prodrug therapy or GDEPT. In GDEPT, a vector is used to selectively transduce tumor cells with a nonhuman gene which expresses an enzyme that can convert a nontoxic prodrug into a highly toxic antitumor compound in situ. Gedeptin is tumor-agnostic, meaning that it provides the opportunity to address a variety of solid tumors, either cancerous or benign. We hold worldwide rights for all indications of this technology or as we call it, this pipeline technology. Annually in the U.S., there are 67,000 new cases of head and neck cancers with approximately 15,000 deaths. Worldwide, there are approximately 900,000 new cases of head and neck cancers annually and approximately 400,000 deaths. Our initial targeted patient population for the application of Gedeptin represents those who are end-stage care to 15,000 in the U.S. and the 400,000 worldwide. These patients represent a critical unmet medical need. Many are unable to swallow food and have difficulty speaking. Most have exhausted existing therapies and standard of care. Typically, they are receiving palliative care. Our goal is to provide an improved end-stage quality of life by reducing and/or eliminating various targeted tumors. The current protocol entails up to 5 treatment cycles, each consisting of 3 intratumoral injections of Gedeptin over 2 days, followed by infusion of a prodrug, fludarabine phosphate, once daily for 3 days. The Phase I dose ranging study demonstrated that treating a tumor with a single cycle Gedeptin followed by fludarabine infusions was well tolerated with evidence of a reduction in tumor size in patients with solid tumors. As a result of that study, the FDA is funding the current trial under the orphan drugs clinical trials program. In July, initial data from the current multisite trial was presented at the AACR-AHNS International Conference in Montreal. That presentation included results from the initial 8 of the targeted 10 patients enrolled. As noted in the press release issued at that time, the administration of Gedeptin was shown to be safe and feasible. We expect to complete this initial trial by the end of Q1 2024, then to review our recommendations for an expanded Phase II trial with the FDA focused on an expedited path to registration. In the interim, we are discussing partnerships and collaborations in support of worldwide development and commercialization of Gedeptin against very solid tumors, both as monotherapy and as combination therapy in conjunction with immune checkpoint inhibitors. Turning now to COVID-19. CM04S1, our next-generation COVID-19 vaccine differentiates from the current authorized COVID-19 vaccines in targeting both the antibody and cellular arms of the immune system, focusing on providing a more robust and more durable protection than the current vaccines. This is critically important in addressing the high-risk populations of immune compromise individuals, those for whom the current vaccines and monoclonal antibody therapies are inadequate. Such populations include those with various blood cancers, renal disease, sickle cell anemia, HIV-positive, autoimmune diseases such as lupus and those on immune suppressive therapy. In general, patient groups with ablated immune systems, unable to respond adequately to the approved mRNA vaccines are at such a high risk. In the U.S., there are approximately 15 million immune compromise individuals. Worldwide, there are an estimated 240-plus million. There is a major critical need for next-generation COVID-19 vaccines to support such individuals. And we believe that CM04S1 is the leading next-generation vaccine currently in clinical development. During second quarter of this year, the White House announced Project NextGen, a $5 billion initiative, the follow on from Operation Warp Speed, seeking COVID-19 vaccine with enhanced breadth of protection against variants and improved durability, being particularly interested in novel vaccine candidates already in clinical trials. We believe that CM04S1 is a prime example of the desired next-generation COVID-19 vaccine. We have considerable interest both domestically and internationally in participating in our clinical development program. We believe that an opportunity for an expedited regulatory path likely exists due to our focus on high-risk populations, unserved by the current COVID-19 vaccine and monoclonal antibody therapies. Also, we anticipate partnering and collaborations and support of worldwide commercialization distribution. Regarding Project NextGen, we are currently in active discussions related to formal participation in this initiative. Of the $5 billion funding, so far, $1.9 billion has been awarded, resulting in $3.1 billion remaining to be awarded. Project NextGen leadership has indicated their expectation to award the full $5 billion with additional awards to be announced by year-end. We hope to provide further updates soon. For the remainder of 2023 and 2024, we are focused on accelerating efforts in support of the Gedeptin and CM04S1 Phase II clinical programs as well as advancing our MVA vaccine specific to Mpox and smallpox in the development and further progress of our program focused on the advanced MVA manufacturing system. In 2024, this will include the further reporting of results from our CM04S1 Phase II programs, including results from the healthy volunteer booster trial, completion of enrollment [indiscernible] results from the immunocompromised CLL trial and additional site initiations and further results from our immunocompromised stem cell transplant trial. For Gedeptin in 2024, we expect to report the final results from the current trial and our plans for the expanded Phase II trial. We also expect to report plans regarding the next steps related to evaluating Gedeptin as combination therapy used in conjunction with immune checkpoint inhibitors. Relative to GEO MVA against Mpox and smallpox, we anticipate reporting in 2024, our regulatory path and plans related to advancing that product towards registration. Finally, next year, we'll continue to provide updates related to our advanced MVA manufacturing process targeted to enable GeoVax to effectively produce and distribute MVA-based vaccines in response to real-time market needs. Now I'd like to turn the presentation over to Mark Reynolds, GeoVax's Chief Financial Officer for a review of our recent results and financial status. Mark?

Thank you, David. I'll start the financial review with our income statements. We had no active grants during 2023, so we reported no grant revenues as compared to a small amount in 2022. However, as David has noted, we are having ongoing discussions with regard to Project NextGen. If an award were to be made by BARDA to GeoVax, this could become a very important component of our financing mix in the future. In this regard, though, I'll say that there is no award to date and there are no guarantees there will be one. So I'll refer everyone back to the forward-looking statements disclaimer at the beginning of this call as all of our comments regarding Project NexGen are forward-looking statements. Research and development expenses were $6.9 million and $14.5 million for the 3-month and 9-month periods in 2023 versus $2.7 million and $5.4 million, respectively, in 2022. These increases are primarily associated with clinical trial activity for the CM04S1 and Gedeptin programs which includes manufacturing costs for clinical trial materials. The increase is also reflective of higher personnel costs as we brought on 2 additional executive level employees in early 2023, adding depth to our regulatory and quality control functions. General and administrative expenses were $1.7 million and $4.6 million for the 3-month and 9-month periods in 2023 versus $1.2 million and $3.4 million in 2022, with the increases mostly associated with higher personnel and consulting costs, patent costs and investor relations expenses. Interest income was $675,000 in '23 versus just $4,000 in 2022, reflecting increasing interest rates available through our money market accounts. So overall, net loss for the 9-month period of '23 was approximately $18 million or $0.69 per share versus $8.6 million in 2022 or $0.63 per share. Again, with the increase being driven by the CM04S1 and Gedeptin clinical trial activity. Turning now to the balance sheet. Our cash balances at September 30 were approximately $12.7 million as compared to $27.6 million at the end of 2022. The change in our cash balances is reflective of $14.9 million used in operating activities. There were no significant financing or investing activities so far during 2023. Our outstanding common shares currently stands at $26.7 million. So going forward, funding our ongoing Phase II clinical programs for CM04S1 and Gedeptin will continue to be the most significant use of our cash going into '24. We don't expect this prioritization of our spending to change if we receive a Project NextGen award from BARDA as any incremental spending for that program will be funded by the award. We do expect to raise additional capital to fund our programs in 2024, and we intend to do that in conjunction with positive news flow. I'll be happy to answer any questions to the Q&A. And I'll now turn the call back to David.

Thank you, Mark. My colleagues and I will now answer your questions. Joining us for the Q&A session are doctors Mark Newman, Kelly McKee and John Sharkey, our Chief Scientific Officer, Chief Medical Officer and Vice President of Business Development, respectively. I'll now turn the call over to the operator for instructions on the question-and-answer period.

[Operator Instructions] Our first question comes from Jason Kolbert with Dawson James.

Congratulations on all the progress. I have kind of a tangential question, but I think it's important. There has been a tremendous number of COVID reinfections, people who had COVID, recovered from it, and now they're getting it again. And I noticed that the emergency use authorization is now approved for Pfizer's PAXLOVID. And PAXLOVID is getting prescribed quite a lot. So I'm just wondering how this impacts the marketplace, and does it impact immune-compromised patients at all?

Thank you, Jason. What I'll do is I'll make a couple of comments on -- my thoughts on this, and then Kelly, I'll ask if you'd like to add to it. First of all, I'll say that I don't think it impacts the immunocompromise at all because it's been shown that they're not responding well to the monoclonal antibodies, either Evusheld or PAXLOVID. So I think that's unchanged. There's still a tremendous need for a vaccine such as ours that will address their needs because they've been unmet since the beginning of the introduction of the vaccines. So I think from that standpoint, there's just really no impact. If anything, it further underscores the importance of what we have in development. Kelly, do you want to add anything there?

Yes. Just a couple of thoughts. I mean, first of all, as far as the impact on the vaccine market overall, I mean, I think everybody sort of recognizes that the mRNA vaccine sales have been considerably lower than they were at the -- in the first stages of the pandemic, for sure. And I -- there are so many factors that impact that. And the sort of issue of recurrent infections or breakthrough infections is only a component of that. So I'm not sure you can sort of parse those issues efficiently. As far as the impact on the immunocompromised population, I mean, we're sort of talking apples and oranges. PAXLOVID is a therapeutic, of course. And we've got a vaccine to offer, and I think by anybody's measure, if we can prevent people from getting sick, particularly for those -- to keep them from getting severely ill, we're better off than having to rely on a therapeutic and antiviral therapeutic that, number one, isn't 100% effective, and number two, has some substantial sort of side effects that you prefer not to deal with, not the least of which is a sort of long COVID syndrome that seems to sort of appear in people after they stop taking PAXLOVID. So it shouldn't impact us at all. And whether it has -- what the influence is on the wider vaccine landscape, I can't really -- I don't know.

Well, I was just -- what I see in the real world is a very large segment of the population does not want to get a fourth, fifth and sixth mRNA booster. They are hearing that PAXLOVID does have some side effects, metallic taste in the mouth principally. But it's pretty effective at knocking virus down. But you're right, there is a lag. And I think a segment of the population would really like an mRNA alternative, and I'm really wondering if that might that not be a market segment that in addition to immune compromised patients kind of becomes very attractive to you.

Well, I was just going to say, I mean, when you say that they prefer an mRNA option, I think the mRNAs are kind of what they had currently available to them. One of the big advantage that I think our vaccine offers is sort of an alternative approach to immunization where we can provide sort of broad durable immune protection that is -- that won't require -- that shouldn't, I should say, require frequent once, twice a year boosting in order to maintain immune protective status.

Jason, I was going to add that as the data comes out from the recently fully enrolled trial, where it's the healthy volunteers receiving our vaccine as a booster, I think that data may be demonstrative of sort of what Kelly was just touching on, maybe that our breadth of protection and the durability that's delivered from this dual antigen approach is going to give something that will be of value that they're not receiving from the mRNAs.

[Operator Instructions] This concludes our question-and-answer session. I would now turn the conference back over to David Dodd for any closing remarks.

Well, thank you for everyone. There weren't that many questions. We have a new sales manager coming in a year from now, I guess. But anyway, I want to thank everyone for participating in the call. We appreciate your interest. And I'd just say that, again, to reiterate, our strategy that we're focused on is to innovate, to differentiate, to accelerate to the market and to do this while collaborating. And that reflects our focus towards building significant shareholder and stakeholder value. I want to acknowledge and thank our Board of Directors, our staff and the many other parties that continue to support, advise us towards achieving success. We're committed to providing meaningful career development opportunities for a highly competitive quality-oriented members of our team. we're seeking to disrupt the current paradigm of both cancer therapies, infectious disease vaccines and redefining how this success is, in fact, defined in addressing various patient population. I want to wish everyone a wonderful day. Thank you, and we look forward to keeping you updated as we go forward. Thank you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.