PDS Biotechnology Corporation (PDSB) Earnings Call Transcript & Summary

Thanks. Hello, everyone. Thank you for joining us as we kick off the afternoon session here in the first day of Oppenheimer's 31st Annual Healthcare Conference. We're very delighted to have with us PDS Biotechnology, which has a number of immunotherapy clinical development programs focused in oncology, also has a COVID-19 prophylaxis program. For the company, we have the CEO, Dr. Frank Bedu-Addo, who will be presenting his slides. And I will now turn the podium over to Frank. Thank you.

Well, thank you very much for the introduction. I would also like to thank the organizers of the Oppenheimer Annual Healthcare Conference for the opportunity to present PDS Biotechnology today. Please note that this presentation contains forward-looking statements, and please make sure that you are familiar with the risk factors associated with the company as filed with the SEC. So to date, the most significant limitation to effective cancer immunotherapy has been effective induction of tumor-attacking killer T-cells, also known as CD8 T-cells, that can be produced in vivo with adequate potency and quantity. At PDS Biotech, we are developing a pipeline of cancer immunotherapies and novel vaccines based on our proprietary Versamune technology platform that has been engineered and demonstrated to generate powerful in vivo CD8 T-cell responses. I will discuss the impact of this characteristic of Versamune on antitumor efficacy as we review our data. In addition to powerful in vivo CD8 T-cell responses, the Versamune-based cancer immunotherapies possess the following characteristics: first, the ability to also induce long-term memory T-cell responses, which results in long-lasting efficacy; secondly, a unique combination of potency and safety without the systemic toxicities typical of immunotherapy; and thirdly, the versatility to allow for combinations with other cancer therapies. So PDS Biotechnology is a mid-clinical stage biopharmaceutical company. We currently have 3 ongoing Phase II human clinical trials to study the company's lead immunotherapy, PDS0101. Now PDS has established important validating clinical partnerships with leading and well-respected oncology institutions, including Merck, the National Cancer Institute and MD Anderson Cancer Center. PDS Biotech has no debt and reported approximately $33.5 million in cash as of the last filing in September. We announced last month that our Phase II trial in advanced HPV-associated cancers in patients whose cancer had returned or continued to spread up to treatment had achieved its initial threshold of 3 or more objective responses in the first 8 patients, therefore, allowing for recruitment of the full cohort of 45 patients. We are working with our 2 Brazilian partners as a consortium to develop and commercialize a novel Versamune-based T-cell activating COVID-19 vaccine in Latin America. We announced last week that the consortium has been granted up to approximately USD 60 million by the Brazilian Ministry of Science, Technology and Innovation, the MCTI, to develop the commercial vaccine. The versatile technology 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. In each product, Versamune is combined with a different tumor or infectious disease protein antigen which is specific to the particular cancer or infectious disease we are seeking to treat or to prevent. Our lead program, PDS0101, addresses various HPV-associated tumors and is being studied in 3 Phase II clinical trials. With our infectious disease programs, our universal flu vaccine studies are funded by a grant from the NIAID. And our COVID-19 vaccine program, as I just mentioned, is fully funded through commercial development by the MCTI Brazil. So moving on to the technology. Our Versamune technology, as I mentioned, is designed to promote in vivo T-cell activation. Now T-cells differ significantly in type and potency. Therefore, in order to generate an effective antitumor immune response, the immunotherapy must induce the right type of killer T-cell in the right quantity and also with the necessary killing potency. So on the left slide -- on the left of the slide, I have a bar chart showing the number of killer T-cells induced by various clinical stage technologies. The dark green bars show the quantity of polyfunctional CD8 killer T-cells induced. These polyfunctional T-cells are recognized to be the most potent type of killer T-cell. Now this study shows that the Versamune-based product induces a significantly higher quantity of T-cells and also a much higher quality of killer T-cell. Now the effect of this characteristic of Versamune on antitumor efficacy is shown in the preclinical regression plots on the right. So tumor size on the y-axis, so in the untreated animals with the gray line, we see rapid and aggressive tumor growth. The black line shows the results when the HPV16 tumor-specific protein is administered. The result is a complete lack of efficacy. The blue line is what we obtained using the clinical adjuvant GM-CSF, and this is representative of the data reported by the leaders in the field with multiple doses and immune response results, which leads to a slowing down of tumor growth. But the cancer continues to progress, and the animals or patient live a little longer. That is the state of immunotherapy today. Now let's take a look at PDS0101, which contains the same HPV16 tumor-associated protein now formulated with Versamune and administered in the same dose as before. Now after a single dose, Versamune's unique ability to present the protein into the correct immunological processing and T-cell presentation pathways, while also activating the right mechanisms, results in, in vivo induction of large numbers of high-quality tumor-targeting T-cells. And as a result, after 1 dose, we see by day 35 complete regression of the tumor. This study has been replicated in several times and independent expert labs. Now after leaving these tumor-free animals for 60 days and rechallenging them with the tumor cells, 100% of these animals were fully protected against tumor reestablishment. This means that in addition to a strong killer T-cell response, we've induced the powerful memory T-cell response that continues to protect against future disease. Now this characteristic of Versamune and its ability to generate a powerful antiviral killer T-cell response as well as memory T-cells becomes very important when we talk about our novel class of infectious disease vaccines. This concept is being applied to our novel COVID-19 and universal flu vaccines. This slide summarizes the key characteristics of a safe and effective immunotherapy, and it clearly shows how differentiated the Versamune-based products are from other approaches in possessing each of the critical key characteristics. Okay. I'll now move on to our Phase II human clinical trials. So these trials have been performed, as I mentioned, in advanced HPV-associated cancers, which include anal, cervical, penile, head and neck, vaginal and vulvar cancers. The furthest progressed of these trials is the PDS0101 trial being run by the National Cancer Institute. This is a Phase II trial evaluating a novel triple combination of PDS0101 with 2 other clinical stage immunotherapies owned by EMD Serono: bintrafusp alfa, also known as M7824, which is a first-in-class bifunctional checkpoint inhibitor; and NHS-IL12, which is an antibody conjugated cytokine. This trial is a result of studies independently performed and published by the National Cancer Institute showing superior antitumor efficacy of the triple combination. Any patient with an advanced HPV-associated cancer who has failed prior treatment is eligible to enroll in this trial. Now I mentioned earlier that this trial had met its initial threshold of 3 or more objective responses in the first 8 patients, meaning that a minimum objective response rate of about 40% was required to perform the full trial. Now this result was achieved ahead of the full enrollment of the initial 8 patients. And the trial has, therefore, been opened up to recruitment of 45 patients. The highest objective response rate in this specific population of patients who had failed prior treatment but had not yet been treated with a checkpoint inhibitor, meaning that they were checkpoint inhibitor-naive, is about 30%. This result was achieved with M7824 monotherapy, and this study was published in October 2020 in the Journal for ImmunoTherapy of Cancer. So the 40% threshold was selected since we expected that by the addition of PDS0101, even in this patient population who might have weakened immune systems, that we would expect to see the induction of tumor-targeting CD8 killer T-cells in a reasonable percentage of the patients. The 40% target, therefore, presents a 30% improvement over the highest objective response rate seen in this population to date. This trial has, therefore, now been opened up to full enrollment and is studying the effect of the triple combination in 2 distinct populations of advanced HPV cancer-positive patients. In group 1, the first group of patients, the objective response rate is being evaluated in checkpoint inhibitor-naive patients. In the second group, the objective response rate is being evaluated in patients who have failed checkpoint inhibitor therapy, meaning that these are the checkpoint inhibitor-refractory patients. We expect to present more mature data on this program next quarter. Our confirmation of enhanced efficacy with the novel triple combination could lead to expanded evaluation in several cancers with the HPV -- with the PDS pipeline products. On this slide, I summarize the collaboration with Merck, combining PDS0101 with Merck's Keytruda, which is standard of care in first-line treatment of recurrent or metastatic head and neck cancer. This is a single-arm, open-label trial currently recruiting and enrolling approximately 100 patients. The goal of this trial is to determine if the combination provides improved efficacy over Keytruda alone. If PDS0101 is clearly demonstrated to enhance the therapeutic benefit of checkpoint inhibitors, this could expand evaluation of the Versamune-based therapies in several cancer indications. On this slide, I show the MD Anderson-led trial combining PDS0101 with standard of care chemotherapy or chemoradiotherapy in treatment of locally advanced cervical cancer. Here again, the goal is to determine if the combination is safe and if it provides improved efficacy over CRT alone. This is also a single-arm, open-label trial currently recruiting and enrolling approximately 35 patients. In this study, a demonstration of safety and enhanced efficacy could again lead to broad applications of Versamune-based immunotherapies in combination with chemotherapy or CRT to treat multiple cancers. Now switching over to our COVID-19 vaccine. We recently reported on a publication in the December 2020 issue of the leading peer review journal Vaccines by the team at the Mount Sinai Icahn School of Medicine. The results shown on the left demonstrated superior preclinical induction of neutralizing antibodies to their SARS-CoV-2 antigen, which was administered in a Versamune-based vaccine. The preclinical study also demonstrated effective production -- protection against challenge with the virus after vaccination. And so here with the arrows, we can see the superior neutralizing antibody responses with the Versamune-based vaccine. Now based on emerging scientific COVID-19 data today, it is becoming more and more evident that T-cell responses and CD8 T-cells, in particular, may play an important role in providing immunity and protection against infection. It is also reported that T-cell induction may correlate with longer-term protection. So on the right-hand side, we see powerful induction of virus-specific T-cells when 2 different protein-based COVID-19 vaccines are designed to incorporate Versamune. So PDS0203 is, therefore, designed to promote a greater breadth of long-lasting protective immune responses. So potential advantages of the Versamune-based COVID-19 vaccine are the following: first, in addition to neutralizing antibodies, we have demonstrated the induction of T-cells, which may target conserved regions of the virus that are less likely to mutate and may be more broadly effective. Secondly, it may provide long-lasting immunity due to the induction of memory T-cells. PDS0203 is a subunit vaccine and also provides strong potential for safety. In addition, this vaccine does not contain RNA, DNA, attenuated viruses or traditional adjuvants. So I'll move on to the commercial opportunities for our HPV cancer immunotherapy, PDS0101, and our COVID-19 vaccine. Now PDS0101, as I mentioned, is designed to treat cancers caused by infection with the human papillomavirus. There are over 43,000 new incidences of these cancers every year in the United States alone. In many of these cancers, these 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 per year. With COVID-19, I mentioned that vaccine development and commercialization is fully funded with a grant of approximately $60 million by the MCTI Brazil. Now pending the clinical results, the vaccine could be commercially available in 2023. Now although several vaccines are now available in the United States, Latin America is still significantly underserved. We believe that with clinical success, PDS0203 could be competitive with a near-term multibillion-dollar market opportunity in Latin America. The initial target market for the vaccine is Latin America, population of about 650 million, with Brazil constituting about 1/3 of that market. Current vaccine prices as we know today range from approximately $20 to $74 for a 2-dose regimen. 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 antigens -- and 70 tumor antigens have been identified and reported. As part of our long-term strategy, we will continue to expand the development of the Versamune-based products through partnerships and licensing. We have some key upcoming milestones over the next several quarters. With PDS0101, we achieved an important milestone in the National Cancer Institute-initiated trial this quarter by meeting or exceeding our set objective response rate for tumor regression, which surpassed the highest response rate reported in this advanced or recurrent HPV cancer population by at least 30%, therefore, enabling full enrollment into the trial. We expect to present more mature data late next quarter. If recruitment efficacy continues to be maintained, we expect this trial to be completed in the first quarter of next year. With the MD Anderson-initiated trial in locally advanced cervical cancer, we expect that preliminary data from this trial will be reported late in the fourth quarter of this year or in the first quarter of 2022, barring any unforeseen events. As we are running these trials in the middle of a pandemic, we anticipate that recruitment rates may be quite variable and quite difficult to accurately forecast. Now the same applies to our VERSATILE-002 clinical trial studying PDS0101 with Merck's Keytruda in recurrent or metastatic head and neck cancer. Again, we expect interim data in about a year. With our COVID-19 vaccine, development of the clinical manufacturing process is being initiated as well as final regulatory activities. We expect the combined Phase I/II trial to be initiated in the next few months. Pending when the Phase I/II study starts, we expect that Phase III -- the Phase III trial will be initiated sometime by the first quarter of 2022. So to summarize, our early clinical data as well as preclinical data suggest potentially superior efficacy of PDS0101 and the Versamune-based products. There is strong potential for near-term value appreciation based on the expectation of more mature data from the National Cancer Institute-led trial in advanced HPV cancer next quarter as well as data from the Merck trial as well as the MD Anderson trials later in the year. We see our partnerships with top immuno-oncology institutions for each of our 3 ongoing Phase II clinical trials as 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 may facilitate rapid adoption of PDS0101 by oncologists. With our COVID-19 program, barring any unforeseen events, we are hopeful that an effective and broadly protecting Versamune-based vaccine could be commercially available in Brazil by 2023. Thank you very much for the opportunity to present PDS Biotechnology today. Thank you.

Thank you very much. Frank, I've got a few minutes for questions. Just seeing if we have any that came in. I have a question for you actually on that last point about Brazil. We saw that was a recent announcement from PDS with the $60 million commitment. Just wondering if you have any further commentary as when we might see some of those portions of the payments come in and how those may be shared with the other 2 entities that you have in that consortium?

Yes. So that has -- that arrangement hasn't been made public yet. But what PDS has licensed the Versamune platform to Farmacore, PDS is working very closely within the consortium, as part of that consortium and also providing scientific advice and oversight. The clinical trial will be run in Brazil. As you know, the vaccine rollout has been a little bit slower in Brazil. So we have a window of opportunity, during which we can actually effectively perform these clinical trials in Brazil. We also have the variants circulating in Brazil, which also provides a good opportunity to demonstrate efficacy against multiple strains of the vaccine -- of the virus, rather. But that really hasn't been made public yet in terms of what the exact arrangement is. But we will definitely -- we expect that when we announce -- that release of the funds was contingent upon given -- being given the green light or the go-ahead by Anvisa. We expect that we are very close to that. And so once that is done, I think we will then make the arrangement public at that time in terms of exactly how the arrangement is working and who is responsible for which piece of the commercialization process.

Okay. Terrific. And then just lastly, PDS0101, this is a small molecule that acts in a stereoselective way. Maybe just a quick background on how this kind of came to be. Was it out of academia? And what the IP exclusivity you expect on this would be?

You mean with PDS0101, specifically?

Yes. Yes, that's right.

With PDS0101, the Versamune technology platform was originally developed at the University of Pittsburgh School of Medicine. The technology is now fully owned by PDS. And with PDS0101, what we have done is we have designed our proprietary HPV16-specific protein or peptides. And so what we've then done is combined those proprietary proteins with the Versamune technology platform. To date, PDS has multiple patents specific to the Versamune technology platform. We have patents that are valid through the mid-2030s. And so we believe our -- the patent protection is quite robust. And we have not only patented the specific lipid that's used in the Versamune technology platform, we've patented the class of lipids that results in this kind of -- this ability to not only present the protein, the tumor-specific protein appropriately and effectively to the immune system, but also to activate the right immunological pathways. And what we have demonstrated is that both pieces are necessary to induce an effective antitumor response. And that capability in that class of lipids that are able to effectively do that have been effectively patented by PDS in multiple countries.

Excellent. Well, terrific. I think we're right up at the time. So Frank, thank you very much for joining us and for that terrific presentation. And thank you, everybody, for tuning in, and look forward to seeing you at another session here at the Oppenheimer Healthcare Conference.

Thank you very much.