Imunon, Inc.

Good morning. My name is Alan, and I will be your operator today. At this time, I would like to welcome you to Immunon's second quarter 2023 financial results conference call. All lines have been placed on mute to prevent any background noise. Following the speaker's prepared remarks, there will be a question and answer session. At that time, you may press star on your phone to ask a question. You may press star one. Apologies. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please keep in mind, if you are using a speakerphone, you must release your mute function to allow the signal to reach your equipment. Again, that's star 1 to ask a question during the Q&A session. I would like now to turn the call over to Kim Golodetz. Please go ahead.

Thank you, and good morning, everyone. This is Kim Golodetz with LHA. Welcome to Immunon's 2023 Second Quarter Financial Results and Business Update Conference Call. During today's call, management will be making forward-looking statements regarding Immunon's expectations and projections about future events. In general, forward-looking statements can be identified by words such as expects, anticipates, believes, or other similar expressions. These statements are based on current expectations and are subject to a number of risks and uncertainties, including those set forth in the company's periodic filings with the Securities and Exchange Commission. No forward-looking statements can be guaranteed, and actual results may differ materially from such statements. I also caution that the content of this conference call is accurate only as of the date of the live broadcast, August 10th, 2023. Immunon undertakes no obligation to revise or update comments made during this call, except as required by law. With that said, I would like to turn the call over to Dr. Corinne Lagoff, Immunon's President and Chief Executive Officer.

Thank you, Kim, and good morning, everyone. Today, joining me is Jeffrey Church, our Chief Financial Officer. In addition, Dr. Kirshid Anver, our Chief Science Officer, will be available during the Q&A session at the end of our prepared remarks. As I have discussed during previous calls, insurance growth and development is dependent on four pillars. The one I'd like to spend most of our time on today is the development of our Placine prophylactic vaccines modality as an out-licensing and partnership opportunity. Placine is our proprietary mono or multisystemic non-viral and synthetic DNA technology for the expression of pathogen antigens. It is currently being evaluated in preclinical studies for the development of next generation vaccines. We have made exceptional progress advancing this technology as a prophetic vaccine modality with important features both as a commercial product platform and as a potential solution to addressing the next pathogens of interest. I will review some of our most recent clinical data with the vaccine which suggests this asset has been the risk and is performing as we anticipated. During the quarter, Dr. Enver presented results from pre-gable studies in a vaccine COVID-19 vaccine at the Vaccine Technology and the 2023 Virus and Cells Golden Research Conference in Barcelona that demonstrated characteristics that address the limitations of current commercial vaccines by offering enhanced breadth of protection to emerging variants, Persistence and robust cellular immunity as well as stability at workable temperatures. Importantly, humoral immune responses specific to SARS-CoV-2 spike antigen were persistent over a 14-month post-vaccination period, while the T-cell responses from classic COVID-19 vaccines after 14 months were higher than a commercial mRNA vaccine. In another mouse study, the humoral response to a single dose of the commercial mRNA vaccine plateaued within 14 days after vaccination, while the response continued to increase over time with the plasmin vaccine, demonstrating improved durability. We believe that our DNA plasmid vaccine may provide greater protection against reinfection, hospitalization, or death. More recently, we have shown that Lecithin is stable for at least 12 months at refrigerated temperatures and for at least one month at room temperature. I can't emphasize enough how important these attributes are to a commercial vaccine product, especially as many new pathogens may arise in geographies where there are challenges with refrigeration storage and distribution networks. In addition, our ability to rapidly switch out antigens and load multiple antigens into the same vaccine should be instrumental in addressing the spread of disease. Beyond the development of a next-generation COVID-19 booster vaccine, which I will come back to in a minute, we at Immunon are interested in developing the placebo therapy across many pathogens of interest, like filoviruses or RNA viruses, where a DNA-based approach may be beneficial To date, the US and global public health policy and commercial vaccine manufacturers continue to play catch up with the reoccurrence of existing infectious disease threats and new emerging pathogens. Emerging fevers, which are caused by viruses like Lassa or Marburg or Ebola, are prime examples and are among the most serious threats to public health, both in the endemic regions of West Africa and worldwide, due to high mobility and mortality rates. These viruses cause lethal hemorrhagic fevers in several cases and are classified as risk approaches which need to be handled in biosafety levels for facilities. There are also potential biodefense threats if used as biological weapons against civilians. turn to IMNN's 101, our first clinical vaccine designed as the next generation COVID-19 booster. All the preclinical studies in mice and NHPs have supported the development of a pre-IND package that we submitted earlier this year to the FDA. We have just received the written response from the FDA, and I am pleased to tell you that the FDA provided encouraging feedback on our data and clinical development plans. which gives us comfort that we are well on track to submit an IND in the first quarter of 2024 and enter the clinic soon thereafter. The IND will be for a proposed Phase 1-2 program, which is designed to provide proof of principle in humans. The FDA also confirmed that the plug-and-play strategy for our platform was acceptable. So this confirms the flexibility and the versatility of our modality, which allows for the rapid production and development of any vaccine by simply changing the antigen coding cassette. MNN101 is a monovalent COVID-19 vaccine candidate of the Omicron XBB15 variant, as per the FDA's recommendation. You remember that the FDA's VIAFAC, the Vaccines and Related Biology Products Advisory Committee, met on June 15 this year to discuss and make recommendations for SARS-CoV-2 strains for updated COVID-19 vaccines for use in the United States beginning in the fall of 2023. So the plug and play model using the plasmid DNA backbone has shown excellent results, not only in COVID-19 strains, but our early work also suggests a plasmid vaccine would could be useful in multi-parks, known also as MParks. Initial data appear to confirm the validity of Plessin as a platform with broad applicability. You know, mice immunized at the zero and 14 with an MParks vaccine, and this is it, three separate immunological responses associated with the virus. And we also have generated immunological responses against flu and flu viruses in pre-table work. Last quarter, I mentioned that we are developing tumor modalities as a logical extension of our prophylactic vaccine modality. Sixth class concerns the application of our DNA technology to produce universal cancer vaccines, also called tumor-associated antigen cancer vaccines. We have initiated preclinical work to develop a TRIP2 and NYSO1 tumor-associated antigen cancer vaccine in melanoma, which we call IMNN201. This new modality is based on antigen selection and optimization, along with the option to include a potent immune modifier on a single nucleic acid vector. This represents a promising strategy to induce a specific and long-lasting immune response against tumor antigens. We have completed our initial proof of concept study looking in a mouse melanoma model at the potential prophylactic benefits of monovalent TRIP2 and bivalent TRIP2-NYSO1 vaccines. We are very happy with the results as the fixed-class vaccination followed by a tumor challenge delayed the tumor growth and improved survival. Now, the therapeutic studies Evaluating the therapeutic benefits of our vaccines and consisting of a tumor challenge followed by vaccination are ongoing and will be completed in the second half of the year. And we are also in early discovery of our fourth modality in the past for personalized neoantigen cancer vaccines. I'd like now to touch on IMNN001, our DNA-based immunotherapy for the localized treatment of advanced ovarian cancer currently in Phase II development. Recall that last September, we reached full enrollment of 110 patients, and we expect to report an additional set of interim more mature data in the second half of 2023. Enrollment with our A study with breakthrough cancer is now open at MD Anderson, and the Breakthrough Cancer Foundation is working to add more sites. This study, as you remember, is looking at MNN001 in combination with a vaccine. As part of our strategy to reduce reliance on outsourced manufacturers, In June, we unveiled our new CGMP clinical materials production facility on the Hudsville, Alabama campus of the Hudson-Alpha Institute of Biotechnology. The facility will support RNA efficiencies and lower development costs for infectious disease and cancer vaccines and non-viral DNA-based immuno-oncology therapies. This new capability complements our existing CGMP quality control facility for testing clinical products at the Huntsville site. We have designed and built our own manufacturing capabilities to produce GMP-grade plasmid DNA and DNA-facilitating agents to support Phase I clinical studies with our plasmid infectious disease modality and our IndiPlus and FixPlus cancer vaccine modalities. The PSP DNA and DNA satiating agents are key components of the final vaccine formulation with GMP fill and finish carried out at the CDMO partner site. Our scientists can now select any protein from the human or pathogen proteomes to be engineered. Our existing labs also have the ability to conduct testing and run experiments in a variety of animal disease models. These internal capabilities will allow us to control both the cost and the process. I will turn the call over to Jeff Church now, who will discuss our financial results. Then I'll come back and provide a review of upcoming milestones and activities. Jeff?

Thank you, Corinne. Details of Immunon's second quarter 2023 financial results are included in the press release we issued this morning and in our Form 10-Q, which we filed today before the market opened. Immunon ended the second quarter with $24.1 million in cash investments and accrued interest receivable. Our net cash usage for operating activities was $6.8 million in the second quarter of 2023, up from $5.4 million from the prior year period. The increase was primarily due to the cash settlement in April 2023, along with related legal costs for arbitration with a former contract manufacturer for Thermadox. Cash used by financing activities of $6.2 million during the second quarter of 2023 resulted from the early repayment of the company's loan facility with Silicon Valley Bank. This was offset by equity sales under at the market equity facility. Combined with the $1.8 million in planned future sales of Immunon State of New Jersey net operating losses, We believe we have sufficient capital resources to fund the company's operation through 2024. Let me now turn to a review of our financial results. Immunon reported a net loss for the second quarter of 2023 of $5.6 million or $0.61 per share. This compares with a net loss of $6 million or $0.87 per share in the second quarter of 2022. Operating expenses were 5.5 million in the second quarter of 2023. It was down about 10% from the 6.1 that we reported in the second quarter of 2022. Let me break down each one of these light items. Research and development expenses were 3.1 million in the second quarter of 2023, a decrease of about $100,000 from the prior year's second quarter. More specifically, research and development costs associated with our Placine DNA vaccine modality increased to 1.3 million from one, increased from 1.3 million from $600,000 a year ago. R&D costs support the Ovation study as well as the Phase III Optima program decreased to 1, to 0.3 million from 0.8 million in the second quarter of 2022. R&D costs associated with the preclinical development of Immunon 001 decreased to $0.4 million in the second quarter compared to $0.8 million in the same period of 2022. Other clinical and regulatory costs were $0.4 million this year compared to $0.7 million the prior year. CMC, or manufacturing costs, increased 0.7 million this year from 0.3 million, reflecting the development of the in-house pilot manufacturing capability, which Corinne referred to earlier, for DNA plasmids and nanoparticle delivery systems. General administrative expenses were $2.3 million in the second quarter of 2023 compared to $2.9 million for the comparable prior year period. This decrease was primarily attributable to lower non-cash stock compensation and lower professional fees, including legal fees, offset by higher compensation expenses related to the CEO secession plan, which we announced in mid-2022. Other non-operating expenses were $85,000 in the second quarter of 2023. That compared to $65,000 in the prior year period. The company incurred an early debt extinguishing expense of $300,000 on its loan facility with Silicon Valley Bank, which was offset by higher investment income from short-term investments due to the higher returns we're seeing on these investments. Recall that in April 2023, We repaid the loan to First Citizens Bank, which is previously Silicon Valley Bank, for a total of $6.4 million, which included principal interest, prepayment fees, and end-of-term fees. The $6 million collateral account, which we classified as restricted cash, was released and utilized to pay off the loan. Investment income from the company's short-term investments increased by $300,000 for the second quarter compared to the prior year due to higher returns on these investments. Just a brief look at the first half of the year, both first and second quarter. For the six months ended, we reported a net loss of $11.2 million. It compares to $16.5 million in the same period of 2022. Operating expenses were $11.2 million in the first quarter of 2020. I'm sorry, the first half of 2023, which was an 8% decrease from the 12.1 that we reported in the same period last year. Net cash used for operating activities was $10.8 million for the first six months of 2023 compared to $13.4 million for the same period in 2022. This decrease was primarily related to a one-time payment of $4.5 million in interest expense and related costs resulting from the sale and subsequent redemption of $30 million of Series AB convertible redeemable preferred stocks in the year-ago period. Cash used by the financing activities of $3.7 million during the first six months of 2023 resulted from, as I mentioned earlier, the earlier repayment of our loan facility with Silicon Valley Bank offset by $2.7 million of sales of equity under or at the market facility. We also received net proceeds of $1.4 million from the sale of unused New Jersey net operating losses in the first quarter of 2023. Our projected cash utilization for the balance of 2023 is approximately $4.5 million per quarter. The majority of expenses are related to the development of our Placine modality. We will now turn the call back over to Corinne.

Thank you, Jeff. Immunon is tightly focused on harnessing the power of the immune system by developing novel DNA-based approaches in immuno-oncology and infectious diseases. We believe that the non-viral DNA will be a key driver of the future of global medicines. We are very excited about the potential at Immunon to improve the health of millions, if not billions of people, while creating significant value for our shareholders. Along our achievements, we have the risk our placebo modality across several pathogens of interest by demonstrating the immunogenicity and safety of our vaccines. We have generated compelling data in SARS-CoV-2 and IMN101, the next generation COVID-19 signal booster will be in the clinic in Q1 next year. We also have generated excellent immunological response for vaccines against pathogen of concern, especially monkeypox, through Lachiavirus, Mavrivirus. We unveiled a state-of-the-art manufacturing site in Hensfield to reduce our reliance on others. We entered into collaborations designed to advance our technology, and we are actively building capabilities for the development of cancer vaccines. Looking forward, we expect to reach several value-creating milestones over the next six to 18 months. Among them are reporting additional insulin data on MNN001 for ovations to study and the combination study with the vasizomab in advanced ovarian cancer, and reporting top line data from the ovation to study, studying also the IND for SARS-CoV-2 vaccine, and announcing proof of concept vaccine data as well for another virus program. We are very excited to tell you about our programs in more detail in an R&D day that we plan to hold this fall. We will have several Ethiopian leaders discussing our work during this virtual program. So please keep an eye out for more details in the coming weeks. With that, I open up the call to your questions. Operator?

We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you're using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. Our first question comes from Amalie Burton of HC Wainwright. Go ahead.

Hi. Thanks for taking the question. I guess, too, on the COVID program, First, can you touch on the remaining steps and studies that you might need before you could submit the IND in the first quarter? And then do you plan to have the phase one slash two study just be in general healthy volunteers, or do you think you might focus development on either like elderly or immunocompromised patients? And then just clarifying, timelines for Ovation too. I think you previously talked about interim data in the third quarter. Is that still happening? And then is top line data supposed to still on track for the first half of next year? Thank you.

Thank you, Emily. I'll start with the timelines on Ovation. Yeah, so I confirmed that we should have additional interim data in the third quarter. And for the top lines, we're still planning on having the top lines at the end of this second quarter, 2024. To your question on COVID, and I'll ask Dr. Kershid Enver to complete my answers. Yeah, so we'll be ready to submit our IMD in the first quarter. What we are working on at the moment is the production of the clinical vector. So we are pretty much set and very much on track for this submission of IND. And when it comes to the Phase 1-2 trial design, we'll be looking at generally healthy volunteers. I think your question on looking at immunocompromised patients actually is an interesting one, or more elderly patients. That's something that we actually will address with our advisors that could be a subsequent study. Krushi, do you want to add to what I just said?

Yeah, sure. I think you've covered it well. Emily, at least two sets of studies that are IND enabling are currently in progress. One is to look at the safety of IND. animals, so that's a safety talk study due to start soon, and a biodistribution study where the plant is made and the delivery system goes and how long it takes to clear. So those are the two fundamental IND enabling studies that will complete the submission of the IND. And as Corinne said, I really for phase one study, you'll be healthy volunteers, but clearly for phase two part, we could look into some stratification, as Corinne said, maybe some elderly with morbidity, but discussion with our .

Okay, great, that's very helpful, thank you.

Thank you. You're welcome.

Our next question comes from David Bouts from ZACS, go ahead.

Hey, good morning, everyone. Thanks for taking the questions. First one's on the plasine technology. Do we have any idea right now about how long the antigen is going to be expressed in someone who gets immunized with plasine? Are we talking days or weeks or months? Do you have any clue right now?

Hi, David. Yes, we certainly do. Chris, can you please answer the question?

Yeah. Yeah, of course. Well, David, you know, compared to mRNA or protein, the DNA stays for longer period of time, especially in skeletal muscle. So with other genes, such as the recorder gene, we have seen the expression for several weeks. So I anticipate the expression of the antibody would last several weeks. after a single injection or even months.

Is there any concern about tolerance development or even an allergic reaction with such long expression of the antigen?

The levels of the antigen are not high or super max to be able to cause any intolerance issue. That generally happens if you have an antigen protein bolus given over time, you know, super physiological levels, then you see intolerance. So these are levels that are enough to initiate immune responses. I don't anticipate intolerance. But again, we haven't specifically looked for that. Okay.

What I'd like to add as well, David, is, you know, we believe that the increased expression of the antigen or longer expression of the antigen is in fact a benefit because it gives time to your immune system to build memory cells, right? And that's maybe the concern a little bit with mRNAs that, you know, memory cells are not always present.

Okay. That sounds good. And then as far as the Phase I study goes, I guess how do you determine which – which variant you're going to target for that. And then can you change which variant you target between going from, say, the phase one to the phase two?

That's a great question. So, you know, I mentioned that the FDA every year will tell manufacturers which variant to go after. So they're going to use the same principle as they do for the flu vaccines, right? So they met, the VRPAC in 2015, they said what the manufacturers need to put into production is Omicron SBB15, which is what we did. The FDA agreed that that was the right thing for us. And then we'll do a phase one slash two, which means that as soon as we stop the phase one, when we get the safe dose from the phase one, we'll go immediately into a phase two program with the same variants.

Okay, so is this system being set up kind of like the flu vaccine is where you're not going to have to basically do animal studies again every year with a different variant? You're just going to be able to plug it in and use that, whichever variant? Okay.

And that's what I mentioned, you know, that's why we're so pleased that the FDA confirmed what we call our plug-and-play strategy. So then you don't have to redo your tox studies in animals when you change the cassette.

Okay, great. Thanks for taking the questions.

The next question comes from Kemp D'Oliver from Brooklyn Capital Markets. Go ahead.

Great. Thank you. Just to continue on with the vaccine discussion. So, do you expect you would have phase one data in the second half of 24 given the timing of the IND filing?

I believe so. Yeah, that's what we are. exciting to do. Thank you. Okay.

All right. Thank you. And then you had originally hoped to file the IND by the end of the year. We're not talking about a significant change in the timeline, but I'm curious, does the change in the timeline reflect the timing of FDA feedback or reflect the pre-IND functions that you're, or the IND enabling functions that you're doing now?

Right now, thank you. Yes, we thought we could be a bit faster with our pre-IND filing. You're correct. I think the shift in the timelines reflects the fact that we wanted to make sure that we would pursue a variant that is the one recommended by the FDA. So we wanted to wait for the June 15 CLPAC meeting. And then, of course, you know, if the feedback on our pre-ND package was a bit delayed compared to what we had thought as well. So that's the reason.

Great. Thank you very much.

Once again, if you have a question, please press star, then 1. Our next question comes from James Malloy of Alliance Global Partners. Go ahead.

Hi, good morning. Thank you for taking my question. Most of them answered, but I had a question on the combo with Avastin, Phase 1-2 underway. What's the expectation for the potential interim look for that and moving into the Phase 2 portion of that trial?

Good morning, James. So, as I mentioned, this trial is under the sponsorship of the Breast Food Cancer Foundation. We're supposed to have four centers enrolling patients in this clinical trial. The first center, MD Anderson, is up and running. They have not enrolled the patients yet, but they are definitely up and running. And we are expecting the other centers to join the study in Q3. Yeah, I mean, maybe September, October timeframe this year. So it's a phase one slash two, which means that the first phase of this trial is really to evaluate the dose that we need to administer to patients in combination with a vaccine. And then the phase two will come after. So it's a bit difficult at the moment to give you exactly when we can get some first data. But certainly, you know, in the course of 2024, we have more certainty as the new phase the new centers involved. Christian, do you want to add anything to what I said? I know you've been talking with the investigator as well.

No, you're right. I mean, the initial part, as Corinne said, is to demonstrate safety in combination with the Rasten and chemo. And once the four sites that we have targeted come on board, the phase one portion should not take much I don't want to put a date or time, but I think it's just starting now. So phase one portion should not take a longer time before we get into phase two. So September, October, October time, we anticipate all sites to be on board. So another matter of perhaps I would say, you know, three to four months after that.

Great. Thank you. And is there, I have a sort of model expectations for maybe another combo at some point with Updivo. Is that something that you guys are still looking at for epithelial ovarian cancer? I just, yeah.

So I think I would say in theory, I believe that, you know, there is a lot of value in testing IL-12 accommodation because mechanistically that makes a lot of sense to add, you you know, an IL-12 with a checkpoint inhibitor, for instance, right? Because it's all about modulating the tumor microenvironment. So we might think about this. I mean, you know, we do one thing at a time, right? The reason why we engaged in a combination trial with Avastin now is because we had very compelling synergistic data in a preclinical model in mice. But, you know, it's not out of the question to think that combination with a checkpoint inhibitor could be an interesting trial as well.

Absolutely. So I know you have limited resources, as everyone does. Actually, to that point, has there been any discussion to the effect of any larger pharma partners coming in to partner to help with the R&D?

On the IL-12 program, you asked specifically?

Really, IL-12, we're really across the board. Right, yes. Looking at technology, that's pretty good. We want to get in on that.

So, yes, I mean, collaboration and partnership will be key to our operating model. So we'll certainly, we'll stick partnerships. That's why we are so eager to get into a phase one program with our vaccine modality so that we can get to this proof of principle in humans And then I'm sure that that will open doors for collaborations after that.

Outstanding. Thank you for taking the questions.

Thank you.

This concludes our question and answer session. I would like now to turn the conference back over to Dr. Corinne Lagoff for any closing remarks.

Thank you very much. As you know, we have been using the phrase vaccine of the future to describe our work. And this is exactly what our vision is, is to be the provider of safe and effective vaccines that are superior to current vaccines in terms of durability and protection that are stable at workable temperatures that can be manufactured rapidly to respond to evolving pathogens. and offer better compliance for mass immunization with no need for a device or virus. We also believe our technology holds excellent promise in immunology. So we look forward to keeping you informed of our progress for joining us, and we look forward to speaking with you again at our upcoming R&D Day event. Have a very nice day.

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