PDS Biotechnology Corporation (PDSB) Earnings Call Transcript & Summary

All right. Thanks, everyone, for tuning into the B. Riley Virtual Oncology Conference. I'm Andy Fleszar, a member of the biotech team here at B. Riley. We are now joined by PDS Biotechnology's CEO, Frank Bedu-Addo. Frank, thank you for joining us today.

Andy, thanks a lot to you and the B. Riley Team for inviting me to participate. I look forward to the discussion.

PDS Bio had a number of positive clinical readouts in 2020. Let's start with your triplet combination of PDS0101 plus PDS0301 plus a checkpoint inhibitor. This combination is being tested in an NCI-led study in a basket of HPV-positive solid tumors and includes separate arms for checkpoint refractory and checkpoint-naive patients. Maybe starting with the triplet safety profile, a lower percentage of patients are experiencing Grade 3 or higher adverse events with your regimen compared to checkpoint inhibitors plus chemo. How important is a chemo-free therapy for improving the tolerability of standard of care regimens?

Yes, Andy, you're right. To date, we have seen a highly promising safety profile of the Versamune based immunotherapies and combinations in each of the 3 Phase II studies for which data has been reported, including the triple combination. I don't think that eliminating chemotherapy necessarily improves tolerability, right? It really depends on the specific therapy and how that therapy works to treat the cancer. Now oncologists, understandably, don't -- often don't want to put their patients on a novel therapy that may not be more effective if there's a standard of care such as chemotherapy that may work to keep some of their patients alive, if even for a few months. This is actually a key reason why we are highly encouraged by the data that we have generated to date. In the VERSATILE-002 trial, we combined PDS0101 with KEYTRUDA, which is the FDA approved standard of care and which is widely used by oncologists, right? And we've reported more than a doubling of the objective response versus what was reported for KEYTRUDA monotherapy in the KEYNOTE-048 study. And to date, among the first 43 patients, we have not observed any of the treatment-related Grade 3 and higher toxicities that were reported for KEYTRUDA monotherapy. And very similarly with the triple combination, as you mentioned, we've reported industry-leading clinical responses with significantly lower toxicity than reported for checkpoint inhibitors with chemotherapy. So if this improved clinical efficacy with good tolerability is replicated in our registrational studies, this is an outcome that we believe oncologists will very readily embrace and this puts the Versamune based immunotherapies in a favorable or what we believe could be a favorable commercial position.

Frank, you referenced the efficacy that you're seeing with your therapies. For the checkpoint refractory patients receiving the triplet, you achieved the 62.5% objective response in 8 patients at the optimal dose and a median OS of 21 months. Since there's no FDA approved standard of care in this population and you are evaluating a basket of tumors, are there any historical precedents that you can use to gauge these results?

The triplet, as I mentioned, contains PDS0101, PDS0301, which is our tumor-targeted IL-12 and the checkpoint inhibitor. Now as you mentioned, the 62.5% response rate was among the patients who received optimal doses of both PDS0101 and PDS0301. The median overall survival of 21 months, however, was in the full cohort of 29 patients, which includes the 21 patients who received the suboptimal doses that provided weaker response rates, right? The optimal doses are what we plan to progress into the registrational trials. Now regarding our approach, there isn't a historical precedent to a pivotal HPV cancer basket trial. But neither is there a therapy that has demonstrated the extent of tumor shrinkage and overall survival results that the National Cancer Institute has supported for our triple combination across all HPV tumor types. Also do remember that there are no effective treatments for these patients who have failed checkpoint inhibitor therapy, response rates are only 5% or less and the reported historical median survival for these patients is only 3 to 4 months. So to put our results in perspective, I mean, I assume that these patients fail checkpoint inhibitor therapy this month, right? On standard of care, they may very well not live past April. However, the patients on our trial on average will live from this month or do live from this month through Christmas to another January and many of them to get another Christmas and counting, right? So we are hopeful that based upon the unmet need and the benefit that this novel combination may provide to these patients that the FDA will be amenable to the contemplated basket approach across multiple HPV cancer types.

Got it. And the efficacy that you are seeing is also extending into the checkpoint-naive arm of this trial with a 75% objective response rate in 8 patients and 6 of these 8 patients alive at a median follow-up of 27 months, which compares favorably to the results from the KEYNOTE studies. How are you thinking about the efficacy bar in this population? And in your view, what would constitute a clinically meaningful benefit?

Yes. So in the checkpoint inhibitor naive arm, the triplet has achieved an 88% objective response. Checkpoint inhibitor-naive HPV cancer patients who go on to checkpoint inhibitor therapies such as KEYTRUDA or OPDIVO, in contrast, have reported objective response rates less than 25%. Now also on checkpoint inhibitor therapy, the reported median survival for these patients is less than 12 months, right? As you mentioned, today, 75% of our checkpoint inhibitor naive patients remain alive at a median follow-up of 27 months. Now as you know, in oncology, FDA approvals have been obtained for 2- to 3-month improvements in overall survival. Strategically, we believe that the most rapid path to commercialization and importantly, adoption by oncologists is to start with the checkpoint inhibitor refractory patients where the historical median overall survival, as we mentioned, is only 3 to 4 months. And where we are likely to recruit faster and therefore, hopefully quickly demonstrate safety and efficacy in a larger advanced cancer population. So once we have a larger database of supporting safety and efficacy data, we can then more efficiently address utilization in the checkpoint inhibitor naive population where the oncologists currently may have other options. So that's really how we view the checkpoint inhibitor naive -- utilization in checkpoint inhibitor naive population.

Got it. That's helpful. And we'll dive more into the regulatory piece of things in a minute. But before we get there, in addition to clinical responses, is there anything that stands out to you in terms of biomarker responses that you're seeing in patients treated with triplet?

No, that's a good question. So I think getting the biomarker data from the novel triplet regimen as presented at the SITC conference in November, was very important because it gives strong credence to the clinical results that we have reported to date, right? It also supports the immunotherapeutic activity of PDS0101 in generating the more potent multifunctional CD8 killer T cells even in this very late-stage cancer patient population. These patients, as you know, have been very heavily pretreated and many may have compromised immune systems. Remember that 100% of these patients, every single one of them have failed chemotherapy treatment. 90% of them have failed radiation treatment and 100% of them have failed treatment with the checkpoint inhibitors like KEYTRUDA and OPDIVO, right? The biomarker studies showed induction of at least a twofold increase in the HPV16 specific killer T cells, including the more potent multifunctional T cells, right? And also very importantly, 100% of the clinical responders showed an HPV16 specific T cell response. So the data suggests also that what we have -- the data suggests that we are also generating what we refer to as a pro-inflammatory response which the National Cancer Institute reported plays a role in altering the tumor's immunosuppressive forces, therefore, facilitating attack of the cancer by the potent PDS0101 generated T cells. And it was also very encouraging to see you at the SITC conference that both the National Cancer Institute and our collaborators at MD Anderson Cancer Center, independent -- have independently done biomarker studies and come to the same conclusions in advanced refractory cancer and locally advanced cervical cancer, respectively. Both reported the role of PDS0101 in generating these active multifunctional killer T cells that target and infiltrate the tumors, resulting in tumor shrinkage and prolonged survival. So the biomarker data, as I mentioned, has been very helpful in really confirming the activity of PDS0101 in supporting the clinical results to date.

Got it. And another important component of the triplet combination is PDS0301, for which you recently announced an exclusive global license with Merck KGaA. Talk to us about this licensing agreement and the importance of securing access to PDS0301 for a potentially pivotal study for the triplet, your future programs and potential partnerships?

Yes. That's a good question. So this agreement was actually important for PDS Biotech to get done. The usual expectation is that a clinical stage biotech will be seeking to out-license its technology to generate capital. We see things a little differently. Real value is created by developing or acquiring the assets that enhance our potential to develop effective products and to be a successful biotech company. We believe that with these assets, we position ourselves in a stronger partnering and out-licensing position, which if does occur, creates additional value, right? So in terms of the financial aspects of the deal, you'll see that it's really a partnership to get PDS0301 commercialized successfully. The bulk of the financial responsibilities are back-ended to commercial sales and milestones, right. The upfront was $5 million payment and Merck KGaA, Darmstadt Germany took another $5 million in PDS biotech stock, right? Merck KGaA will be entitled to up to $11 million in development and regulatory milestone payments. Do remember that these milestone payments are for the first 2 indications and also includes first commercial sales. Now Merck KGaA, Darmstadt Germany will also receive up to $105 million in commercial sales milestones for the first 2 indications, right? So Merck will also be providing the clinical drug supplies at no cost to PDS Biotech. So as you can see, this deal is structured to facilitate success for both parties and to minimize the near-term costs for PDS Biotech. Now IL-12, is a well-documented T cell stimulating cytokine. IL-12 has not yet achieved its intended potential to effectively treat cancer. There is very little benefit to administering a cytokine if the body is not generating the right type of tumor-attacking T cells. You just enhance the relevant T cells with very little clinical benefit, if any. With Versamune, however, what we believe is unique is the consistent observation across multiple trials that we are generating and inducing the right type of T cell in the body that actually targets and infiltrate the tumors. And PDS0301 is also unique in that. It also targets the tumor and enhances infiltration of these Versamune induced multifunctional T cells into the tumor and expansion of these T cells within the tumor, leading to enhanced efficacy. So our data suggests that due to the complementary effects of the Versamune technology and PDS0301 that potentially exists to significantly advance the treatment of multiple late-stage cancers. The fact that we now own the 2 most critical components of the triplet, which we anticipate may in the future be combined with any commercial checkpoint inhibitor puts the company in the driver seat and provides us with the ability to control our own destiny. Also considering the compelling results with the triplet as we discussed, owning these 2 components puts us in a much more favorable position when it comes to potential partnerships. And so -- and that's why I mentioned at the beginning that this was an important deal for PDS Biotech to get done.

Great. And I think that segments nicely into our next question, something that you discussed before as important for your company and the FDA is to ensure that every part of the triplet is contributing to efficacy. I guess what's the kind of totality of the package that you plan on [indiscernible] to the agency to get them more comfortable with the contribution of each component from the triplet?

Yes, that's an interesting topic. We believe that the FDA will want to understand the contribution of each of the agents towards the clinical outcomes. We also believe that in addition to preclinical data, clinical demonstration of the roles of each of these immunotherapies in the triplet will be important. The FDA will also usually want to understand the safety profile of each of the targets. Each of these targets -- each of these agents, sorry, as a monotherapy and also in the combination. So as you may imagine, a lot of work has been done for PDS Biotech and the National Cancer Institute to be comfortable that we have a compelling and informative data package for discussion with the FDA. Our published preclinical studies, which are quite extensive, to clearly delineate the roles of each of the 3 agents. What these studies also show is that when you look at immunological characteristics such as on the T cell diversity after treatment, tumor infiltration of the killer T cells after treatment and tumor shrinkage. All 3 agents are seen to play an important role. But very importantly, PDS0101 forms the anchor. Now what I mean by this is that there are 2 immunotherapeutic synergies observed. PDS0101 synergizes with PDS0301, which is the IL-12 to decrease the T cell diversity and make the T cells more uniformly recognize the tumors. This increases T cell infiltration into the tumors and induces tumor shrinkage. Very similarly, PDS0101 again, synergizes with the checkpoint inhibitor to do the same. Without PDS0101, these synergies are eliminated, right? So when both synergies are present in us -- in the triplet, the optimal results are obtained and reported. So in human studies, we clearly showed the role of PDS0301, where we see improved clinical outcomes at the higher tested dose. We also clearly show the role of PDS0101 as we discussed, which activates the HPV16-specific T cells, which then correlate with clinical benefit, right? There were also 7 patients whose tumors were HPV16 positive. And in these 7 patients, administration of the triplet did not lead to any tumor shrinkage, thus confirming the critical role of PDS0101 in the triplet. Checkpoint inhibitors have already been approved for HPV-associated cancers and the safety profiles are very well documented. The safety studies for PDS0101 and PDS0301 have also been well documented, and we've already discussed the promising safety profile of the triplet. So as a result of these extensive human and preclinical studies, we look forward to meeting with the agency, and we expect to get important and constructive feedback on how best to progress into these registrational trials.

Got it. That's helpful. And you have 2 other PDS0101 based regimens advancing through the clinic. Let's move on to the doublet combination of PDS0101 plus KEYTRUDA in patients with recurrent or metastatic HP 16 (sic) [ HPV16 ] positive head and neck cancer. At ASCO, you showed a 41.1% ORR and a 9-month OS of 87.2% in 17 patients. What stands out to you the most regarding the doublet's efficacy?

The preliminary results from this PDS0101 plus KEYTRUDA study have been highly encouraging. And we remain very optimistic based on the consistent results we've seen across multiple trials. In this study specifically, we are particularly encouraged by the unique combination of efficacy and safety that has been observed to date. The objective response rate of 41% more than doubles what has been reported in KEYNOTE-048 for KEYTRUDA monotherapy and even KEYTRUDA plus chemotherapy. However, in the first 43 patients whose safety results have been reviewed by our independent data monitoring committee. Not a single one of these patients has experienced treatment-related Grade 3 or higher toxicities as reported in KEYNOTE-048 for KEYTRUDA monotherapy and KEYTRUDA plus chemo. We, therefore, believe that if we continue to see similar or better safety as well as efficacy compared to KEYTRUDA in the registrational trial, this puts us in a favorable position when it comes to adoption by oncologists. The percentage of patients seen clinical benefits, which is -- which we calculate as stable disease and objective responses is 77%, which, again, for us, is highly encouraging.

And you received FDA Fast Track designation and successfully aligned with the agency regarding a registrational trial for the combination with KEYTRUDA. What should we anticipate from this program over the next 12 months, and should we anticipate an update on overall survival in 2023, as the data continues to mature?

Yes. So this program is progressing well. As I mentioned, we've already met with the FDA on this program. We have been given excellent guidance on what the FDA would like to see in the registrational trial. We do expect to get the registrational trial underway later this year. And we do hope to see more data on the overall survival of these patients in the next few months, which we hope will continue to shed light on the differentiation of the data and the durability of the observed therapeutic benefit of the PDS0101 KEYTRUDA combination, similar to what we've reported with the triple combination. This, we believe, is due to -- related -- or due to the type of immune responses being generated and the induction of the memory T cell response also. So yes, we are hopeful that we will be able to provide more data, especially on the overall survival later in the year.

Great. Now let's turn to your collaboration with MD Anderson for PDS0101 plus chemo radiotherapy in patients with locally advanced cervical cancer. At SITC, we saw tumor shrinkage in 9 of 9 patients with a complete response in 8 of these patients. How does this strong response rate compared with the standard of care chemo radiotherapy without PDS0101?

Yes. The MD Anderson trial is important because among the 3 trials for which we have provided data, this is the only one that is not combined with another immunotherapy. Here the observed immune response is only attributable to PDS0101 and the improved therapeutic benefit over chemoradiotherapy is again solely attributable to PDS0101. Now even though MD Anderson reported 9 out of 9, which is a 100% clinical response and 89 complete response rate. This compares about a 70% to 74% response rate with chemoradiotherapy alone. The bigger concern that oncologists grapple with, was cervical cancer, it's recurrence or continued spread of the cancer in these high-risk patients who, in [ our study ] as you know, have what we call bulky tumors over 5 centimeters in size or metastasis into the lymph nodes. In many cases, recurrence may start as early within as early as 6 months after treatment, right? So in 8 of the 9 patients who had a complete response, no recurrences have been seen to date at 1 year. These patients will be observed for about 2 years. So highly encouraging data to date, and we'll provide updates as they become available and considering the fact that this is an investigator-initiated trial, so we don't always have full control over when the data is presented. But so far, very encouraging and we are looking forward to receiving more data on these patients.

Got it. And maybe to push a little bit there. Obviously, as you said, this is -- you're somewhat at the mercy of MD Anderson with releasing data. But any more color on what we should anticipate from this collaboration over the next year?

Yes. I think it will be continued recruitment of these patients, as SITC, even though the data was presented on 9 patients. They did mention in their presentation that they had recruited 17 patients, right? Those patients were much earlier. And so those patients continue to be evaluated. One of the very interesting results that they also presented that we hope to continue to see was looking at the circulating tumor DNA, which is the circulation of tumor cells into patient's blood, right? They did observe that after chemo radiotherapy, there was actually a spike in their presence of circulating tumors in the patient's blood. But what they also did show and see was that, as the CD8 T cell and response increase as induced by PDS0101, but circulating tumor DNA went down to zero. Therefore, providing strong encouragement that this could potentially mitigate recurrence of the cancer, right? So these are some of the results, interesting early results that we want to continue to observe and monitor as patients progress from 1 year to 2 years and beyond.

Got it. And to close this out here, you've talked about the importance of activating and expanding the right population of T cells. Now that you have clinical results from 3 programs of PDS0101, how are you viewing the totality of your data towards meeting these key goals?

Yes. Andrew, you're correct. This is -- this, we believe, is quite important. I try to let people understand that simply activating a T cell doesn't result in a clinically beneficial results. You have to activate the right type of killer T cell that will recognize and infiltrate the tumors, first of all. It has to have the right potency, meaning that it should be a multifunctional killer T cell. And these killer T cells should also be induced in the right quantity. Right now, this potential to achieve this result was clearly demonstrated in our Phase I PDS0101 monotherapy trial. Both MD Anderson Cancer Center and the National Cancer Institute reported their biomarker study results at the SITC conference in November, independently confirming induction of these tumor infiltrating multifunctional killer T cells. Now very importantly, we are now seeing consistent data across the 3 trials, demonstrating the induction of clinically effective killer T cells that shrink tumors and outstanding clinical benefit so far, right? So to directly answer the question, the totality of the data reported in over 100 patients to date as well as the consistency among 3 Phase II trials and the Phase I trial strongly suggests that we are achieving the goal of inducing therapeutic levels of these powerful tumor attacking T cells even in very late stage terminal cancer patients.

Got it. And with that, I think we're at time. Frank, thank you so much for joining us today, and I look forward to more updates from PDS Bio in 2023. And thank you to the audience for tuning in.

Thank you very much. It's been a pleasure.