PDS Biotechnology Corporation (PDSB) Earnings Call Transcript & Summary

Good day, ladies and gentlemen, and welcome to today's PDS Biotechnology Corporation webcast. [Operator Instructions] At this time, it is my pleasure to turn the floor over to Dr. Frank Bedu-Addo, CEO of PDS Biotechnology. Sir, the floor is yours.

Thank you very much for the introduction, and I would also like to thank the organizers for the Fall Investor Summit for the opportunity to present PDS Biotechnology. So please note that this presentation contains forward-looking statements. Please ensure that you are familiar with the risk factors associated with the company and as filed with the SEC. So PDS Biotechnology is a mid-clinical stage biopharmaceutical company developing new treatments for cancer as well as novel T-cell-activating vaccines for infectious diseases, both based on the company's proprietary Versamune platform technology. There are currently 3 Phase II human clinical trials in progress to study the company's lead Versamune-based cancer immunotherapy, PDS0101. The company is headquartered in Florham Park, New Jersey with its lab facilities in Princeton, New Jersey. PDS Biotech has no debt, and approximately $33.5 million in cash as of September 30. PDS Biotech is listed on NASDAQ as PDSB. Now the Versamune technology, which I will discuss today have demonstrated strong potential to overcome some of the key limitations of immuno-oncology, with powerful in vivo killer T-cell induction in our Phase I human clinical trial, which was associated with disease regression. The versatile technology can be used with a broad array of tumor and infectious disease antigens and is protected by several composition and application patents issued in several countries and valid through the mid-2030s. So on this slide, I show the company's robust pipeline of oncology and infectious disease products currently at different stages of development. I mentioned that the technology could be used with a broad range of tumor and infectious disease antigens. And here, as you can see, we are addressing over 10 different types of cancer and 3 infectious diseases with each of these products at different stages of development. The lead program, PDS0101, addresses various HPV-associated cancers and is being studied in 3 Phase II clinical trials. I will discuss the PDS0101 programs in more detail shortly. Quite notable is the quality of our clinical partners, who are some of the most respected in the field of cancer immunotherapy: Merck, the National Cancer Institute and M.D. Anderson Cancer Center. With our infectious disease programs, our universal flu vaccine studies are funded by a grant from the NIAID, and our COVID-19 vaccine program is partnered with Farmacore in Brazil. Now PDS Biotechnology has a very experienced and accomplished management team. All our executives have at least 20 years of relevant industry experience. Prior to PDS Biotech, I had senior executive roles overseeing business, financial and drug development operations. My prior experience has been at companies such as Schering-Plough, which is now Merck, KBI Biopharma and Cardinal Health. Dr. Lauren Wood, our Chief Medical Officer, was head of the Clinical Trials Division for cancer vaccines at the National Cancer Institute, developing the type of products we are currently developing at PDS. And Dr. Greg Conn, Chief Scientific Officer and Co-Founder, has over 30 years of experience leading the development and manufacture of biologics at various companies, including Merck and Regeneron. So now let's move on to the Versamune technology. So this slide currently up shows the immunological process that must be achieved in order to generate an effective antitumor response. I will not discuss the details of the science today as this has recently been published in the leading peer-reviewed journals referenced below and also featured on our website. Now Versamune has been designed to promote each step of this process. The Versamune nanoparticles are composed of a novel and proprietary positively charged lipid and combined with the protein that is unique or highly present in the particular cancer or tumor we're trying to treat. This tumor-associated protein is called an antigen. Most tumors contain unique proteins that can be recognized by our immune system. The Versamune nanoparticles are sized to mimic a virus. This, together with its composition, facilitate effective uptake by the immune system and entry into our lymph nodes. Secondly, Versamune enables the tumor-specific protein to be processed and presented effectively to killer T-cells via what is known as the MHC Class I presentation pathway, therefore overcoming a major obstacle facing immunotherapy and effectively training our killer T-cells to better recognize the cancer. Now Versamune is also designed to activate a critical immunological pathway known as the type I interferon signaling pathway, which leads to dramatic enhancement of the killing potency of these trained killer T-cells and also enables their expansion or proliferation. By activating each of these important immunological steps, Versamune is unique in its ability to promote in vivo induction of high quantity and quality of the right type of tumor targeting killer T-cell necessary for an effective antitumor immune response. Now this slide summarizes the key characteristics of the safe and effective immunotherapy and clearly shows how differentiated the Versamune-based products are in possessing each of the key characteristics. Now here, I show an important slide. I often remind my audience that not all T-cells are created equal. Simply generating a T-cell response is not nearly enough to induce an effective, curative immune response. It is critical to induce the right type of killer T-cell in the right quantity and also with adequate killing potency. By achieving all 3, there is strong potential for effective immunotherapy. So here, we have a preclinical study. However, this study is important because the tumor regression model is the most widely used animal HPV cancer model and has been used by all our competitors developing HPV cancer immunotherapies and therefore, allows to an apples-to-apples comparison with the leading product in the space. So on the left, we see a bar chart comparing the number of killer T-cells induced by various clinical-stage technologies. The dark green bars present what we call polyfunctional T-cells, which are recognized to be the most potent type of killer T-cell. What you see here is that the Versamune-based product induces not only a dramatically higher quantity of T-cells, but also a much higher quality of killer T-cell. And so let's see how this translates to anti-tumor efficacy. So moving on to the plot on the right. On the Y-axis, we have the tumor size. So here, we're studying PDS0101's ability to treat an HPV-positive tumor widely known as TC-1. In the untreated animals with the gray line, we see highly aggressive tumor growth. If we administer the HPV16 tumor-specific protein, it is not effectively taken up by the immune system. It is not presented effectively to the killer T-cells via the MHC class I pathway nor is the right immunological signaling pathway activated. And as you can see with the black line, the result is a complete lack of efficacy. The blue line represents the current state of the art and is representative of the data reported by leaders in the field. What we see here is that with multiple doses of the immunotherapy, an immune response results, which leads to a slowing down of the tumor growth rate and the animals or patients live a little longer. So that is the state of immunotherapy today. Now let's look at PDS0101, which is the exact same HPV16 tumor-associated protein now mixed with Versamune and administered in the same dose. After a single dose, what do we see? By being able to activate the right mechanisms to induce large numbers of high-quality tumor-killing T-cells, after 1 dose by day 35, we see complete regression of the tumor. Now this has been replicated in hundreds of animals and independent expert labs. Now what is also interesting is the fact that we can lead these tumor-free animals to go 60 days and rechallenge them with the tumor cells. In 100% of these animals, they are fully protected and prevent tumor reestablishment. This means that not only have we induced a strong killer T-cell response, we've induced a powerful memory T-cell response that protects against future disease. This characteristic of Versamune is also extremely important when we talk about our novel class of infectious disease vaccines. So moving on to our Phase I human clinical trial results. Here again in the bar chart, we are quantifying the HPV-recognizing T-cells in patients with HPV-induced pre-cervical cancer lesions referred to as cervical intraepithelial neoplasia. Now what we see here comparing the pretreatment of baseline levels, with the post-treatment levels is that the human results, more or less, replicate the preclinical results with powerful in vivo induction, HPV recognizing killer T-cells after subcutaneous injection with PDS0101. Now note that PDS0101 is specific to HPV16, which is the most prevalent and oncogenic type of HPV and present in about 70% of advanced HPV-associated cancers. After this trial, we performed a retrospective evaluation of the clinical benefit to the patients. And what we found was that at the patient's first post-treatment evaluations, which occurred within 1 to 3 months of treatment, 8 out of 10 patients had regression of their lesions and 6 out of 10 had complete regression, with 2 nonresponders. Now this was quite remarkable considering the fact that we did not restrict these patients to HPV16 infection and the CIN patients enrolled had a variety of cancer-causing HPV-type infections, with some having multiple HPV-type infections. Now the clinical study did not involve a control arm and only enrolled 12 patients. Therefore, the results, despite being extremely promising, are not complementary of efficacy. What this helps us do, however, is to continue to connect the dots. Strong CD8 killer T-cell response in preclinical studies led to complete regression of the HPV16-positive cancer. In humans, we are able to generate similar, if not higher levels of these CD8 killer T-cell responses, which led to rapid regression in 8 out of 10 patients with multiple HPV-type infections. Importantly, we were also able to replicate the excellent safety seen in our preclinical studies with no dose-limiting toxicities seen even at the highest tested doses, which are over 3x higher than the selected clinical dose. Now it is important to note the versatility of the Versamune platform and its potential use with a wide range of tumor and infectious disease antigens. Our current pipeline involves the combination of Versamune with 4 different tumor antigens and 3 infectious disease antigens. It is also important to note that over 70 tumor antigens have been identified. As part of our long-term strategy, we will continue to expand development of the Versamune-based product through partnerships and licensing. I'll now focus on our lead immuno-oncology product, PDS0101. PDS0101, as I mentioned, is designed to treat cancers caused by infection with the human papilloma virus. These cancers include anal, cervical, head and neck, penile, vaginal and vulvar cancers. There are over 43,000 new incidences of these cancers every year in the United States alone. In many of these cancers, the incidences continue to grow. Head and neck cancer has recently been described as a silent epidemic, and anal cancer has also been reported to be on the rise. HPV cancer, therefore, continues to present a significant unmet medical need with large markets expected to continue to grow for the next couple of decades. We expect pricing to be competitive with current injectable immunotherapies at a little over $100,000 a year. Now the PDS0101 Phase I results that I presented are highly suggestive of strong efficacy of the PDS0101 monotherapy, and this informed our Phase II clinical strategy. In 2 of our 3 Phase II trials of PDS0101, we have taken advantage of the Versamune platform's unique combination of safety and potency to pursue a strategy of combining PDS0101 with FDA-approved standard of care already demonstrated to be safe and effective in the specific target indications. This is in order to deliver higher-quality therapeutic options and outcomes to cancer patients. We believe that this approach of combination with standard of care significantly mitigates development risk and also presents significant commercialization upside. Now it is noteworthy that the VERSATILE-002 trial, 1 of the 2 combination studies with standard of care, is addressing first-line treatment of recurrent or metastatic disease. This means that patients whose cancer has returned or spread following initial treatment will be able to avoid chemotherapy and take this combination, an approach that may be very appealing to cancer patients. Also, the M.D. Anderson-led Phase II trial of PDS0101 in combination with standard of care, chemoradiotherapy for treatment of locally advanced cervical cancer. Now the furthest progressed of the 3 PDS0101 trials is a National Cancer Institute-led Phase II trial evaluating a novel triple combination of PDS0101 with 2 other clinical-stage immunotherapies: M7824, a first-in-class bifunctional checkpoint inhibitor; and NHS-IL12, which is an immunocytokine, an antibody-conjugated cytokine. Both of these agents are owned by EMD Serono. This novel combination is based on studies independently performed and published by the National Cancer Institute and is being studied in patients with several types of advanced HPV-associated cancers. Any patient with an advanced HPV-associated cancer who has failed prior first-line treatment is eligible to enroll in this trial. So on the next slide, on this slide showing, now, I summarize each of the 3 Phase II trials in more detail. First, the collaboration with Merck combining PDS0101 with Merck's KEYTRUDA, which is standard of care in first-line treatments of recurrent or metastatic head-and-neck cancer. This is a single arm, open-label trial, enrolling approximately 100 patients. As discussed, the goal is to determine if the combination provides improved efficacy over KEYTRUDA alone. Next is the M.D. Anderson-led trial combining PDS0101 with standard of care chemoradiotherapy in the treatment of advanced localized cervical cancer. Here again, the goal is to determine if the combination is safe and if it provides improved efficacy over chemoradiotherapy alone. This is also a single-arm, open-label trial enrolling approximately 35 patients. Third is the NCI-led triple combination trial in approximately 40 patients with advanced HPV-associated cancers. All 3 agents in this trial have demonstrated potential for efficacy as monotherapies in early trials. The study seeks to confirm the synergy between the 3 agents, leading to enhanced efficacy as demonstrated in preclinical studies performed at the National Cancer Institute and published in the June issue of the Journal for ImmunoTherapy of Cancer. PDS Biotechnology -- moving on to next slide. PDS Biotechnology has approximately $34 million in cash at the end of September, and is well positioned to start generating preliminary data from our Phase II clinical trials by next quarter or early second quarter. We expect to start generating preliminary data for both the M.D. Anderson-led trial and the VERSATILE-002 trial by late 2021, early 2022. So to conclude and to summarize. Our early clinical data as well as preclinical data suggests potentially superior efficacy of PDS0101 and the Versamune-based products. There is strong potential for near-term value appreciation based on the expectation of preliminary data starting Q1 of next year or early Q2. We see our partnerships with top immuno-oncology institutions for each of our 3 ongoing Phase II clinical trials a strong validation of our science, technology and target indications. Our ability and decision to combine PDS0101 with standard of care in 2 of the ongoing clinical studies, we believe, presents a potentially rapid path to commercialization of PDS0101 if the combination is demonstrated to be superior to the current standard of care. We also believe that this combination strategy with standard of care, as well as our strategy of targeting multiple HPV-associated cancers after commercialization, will facilitate rapid adoption of PDS0101 by oncologists. Thank you very much for the opportunity to present PDS Biotech today, and I will be happy to take questions at this time.

Great. Thank you so much, Frank. [Operator Instructions] Frank, our first question relates to the company's capital position. How much runway does the $33.5 million you reported as of September 30 give the company? And where would that put you with regard to the ongoing clinical trials?

So approximately $33 million in cash at the end of September gives us about a 22-month runway, so almost a 2-year runway. And so if you see the slide that I have up now, that should take us through approximately the third quarter of 2022. So very importantly, it gives us the capital needed to get started generating that preliminary data from each of these ongoing Phase II clinical trials.

Okay. Great. And I think maybe that's a great way to lead into our next question, which is just broadly speaking, what, in your mind, most differentiates the Versamune platform? There's so many other kind of potential cancer vaccines in development. What are the key points that you feel like best differentiates Versamune?

Well, thanks a lot for that question. So if you see the slide up now, very importantly, there are a number of mechanisms that -- immunological mechanisms that have to be activated to induce a potent antitumor response. Most immunotherapies will activate maybe 1 or 2 of those specific pathways. What is unique about Versamune is its simplicity and also the fact that it has been confirmed and demonstrated, this is published, to activate each of these critical immunological pathways, leading to robust antitumor response in our early studies. But what is also important is the safety. Now the safety is what we have taken advantage of. This unique combination of high safety and high potency is what we've taken advantage of to uniquely combine with standard of care. Now this is also very important for our strategy because by our ability to combine with standard of care, what we're doing is we're taking PDS0101, which has shown strong potential for efficacy as a monotherapy on its own and combining with agents that have been FDA-approved and demonstrated to be both safe and effective for the specific indications that we are addressing. So very importantly, this strategy not only mitigates our development risk but also provide significant commercialization upside if we are able to demonstrate that we can significantly improve the clinical benefit to these patients over the current standard of care. So very important, we believe, that that ability to perform these studies with standard of care is quite unique. And this is really based upon the demonstrated safety as well as the potential potency.

Okay. Great. We've also gotten a number of questions about the company's infectious disease pipeline. Specifically, actually about the universal flu vaccine. Can you give us an update maybe about where those preclinical trials are today? And then broadly speaking, for the PDS02 family, when we can start to see some of these compounds enter the clinic?

Sure. The infectious disease products are slightly behind the oncology products. All our infectious disease programs are still in preclinical development. So we recently announced the award from the NIAID to develop the universal flu vaccine. That development is already underway. So what -- the way it's working is we are performing the formulation studies at PDS, and the immunology and animal studies are being done both at the NIAID and at the University of Kentucky School of Medicine. So the goal of that program is really to develop a vaccine that will generate immune responses or that will be protective against multiple strains of the flu virus. And so avoid the situation that we're currently in, where we have to every year evaluate and understand what strain of the virus is going to be prevalent and develop a vaccine against that particular strain. The goal here with this universal flu vaccine is to generate a strong vaccine that's going to induce both antibodies and T-cells, and that will have a much greater breadth of protective immune responses and also be able to address a much broader range of strains of the flu virus to minimize the need to actually develop a new vaccine every year. So that work is currently ongoing. With the COVID-19 vaccine, we mentioned that our partnership with Farmacore, that vaccine is also in preclinical development. We announced recently that we had met with Anvisa -- specifically Farmacore had met with Anvisa on November 6, and they had agreed upon the path forward to file the IND and get the human clinical trials underway in Brazil. So we are quite optimistic about that program also, and we will continue to provide updates as they become available.

Okay, great. And then our last question has to do with the company's ownership of Versamune and the IP protection for Versamune. Does anyone else have -- has the company partnered with any other company for development of -- sorry, I'm trying to make sure I understand the question. So the question is about, does PDSB currently own 100% of Versamune? And how long does the existing IP portfolio extend that protection?

Yes, that's a good question. So Versamune is 100% owned by PDS Biotechnology. And PDS0101, even though we have partnerships with the companies I mentioned, PDS0101 is 100% owned by PDS Biotechnology. PDS has a strong patent portfolio of 10 patent families, of which 5 have already been issued and awarded in multiple countries. Focusing on those that have already been issued, PDS has protection through the mid 2030s, and could be extended beyond that if some of the more recent patents are approved and issued. So overall, a strong patent portfolio and 100% owned by PDS, both the platform and the platform-based products.

Okay, great. I think that's all the questions we have, and it looks like we're at the end of the time for today's conference. So Frank, anything you'd like to close this out with?

No, I think the key here is the uniqueness of the technology, its unique combination of safety and potency, which allows us to take what we believe is a significant risk-mitigated strategy for our investors but significant upside based upon the combination with standard of care and also the potential for near-term value appreciation as we have 3 Phase II human clinical trials currently ongoing. And we are looking forward to being able to report on the preliminary data in the near-term coming up. So we thank all our investors for their support, and we hope to continue to be in close contact with you as we move forward. Thanks a lot.