PDS Biotechnology Corporation

Good morning, ladies and gentlemen, and welcome to PDS Biotech's third quarter 2024 results and clinical strategy update conference call. All participants are currently in listen-only mode. Following the formal presentation, we will open up the call for question and answer session. I would now like to turn the conference over to Tom Johnson with LifeSciAdvisors. Please go ahead, sir.

Thank you, Operator, and good morning, everyone. Welcome to PDS Biotech's third quarter 2024 results and clinical strategy update call. I'm joined on the call today by the following members of the company's management team. Dr. Frank Beto-Addo, Chief Executive Officer, Dr. Kurt Shepard, Chief Medical Officer, and Lars Bosgaard, Chief Financial Officer. Dr. Beto-Addo will begin with an overview of the company's recent interactions with investors, investigators, and others regarding its clinical development plans. Mr. Boesgaard will review our financial results for the third quarter, and Dr. Shepherd will then join the call to help address questions from covering analysts. As a reminder, during this call, we will be making forward-looking statements, which are subject to various risks and uncertainties that could cause our actual results to differ materially from these statements. Any such statements should be considered in conjunction with the cautionary statements in our press releases and risk factors discussed in our filings with the SEC, including our quarterly reports on Form 10Q, an annual report on Form 10-K, and cautionary statements made during this call. We assume no obligation to update any of these forward-looking statements or information.

Now, I'd like to turn the call over to Dr. Beto Addo. Frank? Thank you, Tom, and good morning, everyone.

It's our pleasure to speak with you again and to provide an update on our progress in advancing our clinical programs. Our third quarter has been a very busy and productive period. Since the update we provided on August the 1st, we have been actively engaged with investors and clinicians to discuss our funding requirements and strategy for our Versatile 003 phase three trial. Versatile 003 is evaluating Versamune HPV plus Pembrolizumab compared to Pembrolizumab alone as a potential treatment for first-line recurrent and or metastatic HPV16-positive head and neck squamous cell carcinoma, or HNSCC. I'll refer to this simply as head and neck cancer. I am very pleased to report that both investor and investigator interest in our Versatile 003 trial is strong. Based on our assessment of the clinical data to date, feedback we received from investors, as well as discussions we've held with key opinion leaders involved with the study and other experts, we have made minor modifications to the Versatile 003 trial design to reduce the overall cost and the time required to achieve an interim data readout and trial completion. The updated Versatile 003 trial design will now include approximately 350 patients. The trial retains statistical power, maintains a 2-to-1 randomization, and remains within the confines of our discussions with the FDA on a registrational trial design. Median overall survival remains as the primary endpoint. And with submission of the updated protocol to our investigational new drug IND application with the U.S. Food and Drug Administration FDA this week, we expect FDA clearance decision by mid-December. The updated design is informed by the observed durability of the clinical responses in our Versatile 002 study seen over the last year. with the most recent data presented at the ESMO Congress in September. Before we dig into the Versatile 003 study, we would like to review some of the key data points from the Versatile 002 study that showed improvement in responses over the last year and that were taken into consideration in the update to the Versatile 003 study design. The data demonstrated the following. Median overall survival has remained at 30 months over the last two data cuts, and the lower limit of the 95% confidence interval improved to approximately 20 months. The best published median overall survival for pembrolizumab is approximately 18 months. Objective response rate improved from 26% to 36%. published objective response rate for pembrolizumab is 19 to 25%. Disease control rate improved from 70% to 77%. The number of patients with complete or near complete responses of 90 to 100% tumor shrinkage increased from 6% to 21%. Nine percent of patients had a complete response versus three percent a year earlier. Treatment-related adverse events or TRAEs of grade three or higher were seen in nine out of 87 patients with one out of 87 patients having a grade four TRAE and no grade five TRAEs. The TRAEs were predominantly transient injection site reactions. We are very encouraged to see that as the data from our Versatile 002 clinical trial have matured, responses continue to improve, suggesting durability of the Versimmune HPV-induced anti-tumor immune response. The encouraging patient survival in clinical responses coupled with promising tolerability as seen in the Versatile 002 trial, underscores our belief and investigator belief in the potential of the combination to be the first HPV-targeted immunotherapy for head and neck cancer, and a significant advancement in the treatment of the growing population of patients with HPV16-positive head and neck cancer. The consistent and maturing data from Versatile 002 also supports the reduction of the trial size while maintaining a favorable risk profile. In making these revisions, we were also mindful that the clinical trial landscape in head and neck cancer is evolving. Merck last month announced top-line data from the Keynote 689 trial evaluating neoadjuvant and adjuvant treatment of head and neck cancer patients with Keytruda. This prompted us to perform the necessary analysis to understand how a potential approval for Keytruda in early treatment of head and neck cancer may impact our target population of recurrent and or metastatic immune checkpoint inhibitor naive patients. It was also our goal to ensure alignment with key opinion leaders on our approach. We had meetings with and solicited feedback from an array of key thought leaders in the HPV16 positive head and neck cancer space, including several key opinion leaders and clinical investigators who intend to take part in the Versatile 003 trial. We also conducted an independent survey of over 50 US-based oncologists who regularly treat head and neck cancer patients along the entire treatment paradigm. Findings from this outreach include the following. At least 50% of head and neck cancer patients are HPV positive, and the percentage of HPV positive cases is increasing. Separately, Key opinion leaders in the United States and Europe reported that over 70% of the new patients they see are HPV16 positive, confirming the rapid increase in the population. Most HPV positive patients do not meet the inclusion criteria for the Keynote 689 study, and therefore, the potential use of Keytruda in the neoadjuvant or adjuvant setting is not expected to significantly impact the growing population of immune checkpoint inhibitor naive recurrent and or metastatic HPV 16 positive head and neck cancer. HPV positive head and neck cancers are virally driven cancers and are increasingly seen as a different disease from HPV negative head and neck cancer with a different tumor physiology. An HPV-targeted approach is believed to offer the best potential for more effective therapy. Primary surgery, which is an inclusion criteria for the neoadjuvant and adjuvant treatment in the Keynote 689 study, is more common in HPV-negative disease than in HPV-positive. And survey respondents do not expect significant impact on the Versatile 003 target population and enrollment, even if Keytruda is approved based on the results of Keynote 689. PDS Biotech, as you know, is investigating Versamine HPV, both as a monotherapy and in combination with Keytruda, in the neoadjuvant setting in HPV16 positive head and neck cancer in the ongoing Phase II trial being conducted by the Mayo Clinic. This is being studied both in patients receiving chemotherapy and in patients receiving surgery. Investigators believe that we are uniquely positioned to address the HPV positive disease state and are urging us to initiate the Versatile 003 trial at the earliest opportunity. Accordingly, we have decided to start the trial with a targeted subset of sites to be financed from our existing resources, and we intend to ramp up the number of sites the additional capital becomes available. With the FDA decision expected on our updated protocol in mid-December, we expect to initiate the first site shortly after in the first quarter of 2025. Elsewhere in our pipeline, we were pleased with the data from the MUNICER Phase II clinical trial evaluating Versamune HPV with chemoradiation to treat locally advanced cervical cancer. This data was presented at the American Society for Radiation Oncology annual meeting. The presented data demonstrated promising clinical activity and a compelling safety profile. Based on continued research, in various HPV-positive cancers conducted by PDS Biotech and independent researchers who recognize its potential, Versamune HPV appears to work in combination with a variety of therapeutic agents to generate clinical responses and promote improved survival in patients with favorable toxicity. We are exploring the next steps in the development of Versamune HPV for cervical cancer. In October, we also announced that the rationale and trial design for a study evaluating PDS01-ADC in combination with Xtandi versus Xtandi alone for the treatment of recurrent prostate cancer was discussed during an oral presentation at the 12th Annual Meeting of the International Cytokine and Interference Society, Cytokines 2024, in Seoul, South Korea. The presentation was given by Dr. Razi A. Madan, MD, head of the Prostate Cancer Clinical Research Section, Genitourinary Malignancies Branch, Center for Cancer Research, National Cancer Institute, part of the US National Institutes of Health. Now I will turn it over to Lars for a review of our results for the third quarter.

Lars?

Thanks, Frank, and good morning, everyone. Turning to our financial results, the net loss for the quarter was approximately $10.7 million or $0.29 per basic and diluted share for the three months ended September 30, 2024. That compares to a net loss of $10.8 million or $0.35 per basic share and diluted share for the three months ended September 30, 2023. This decrease was primarily due to lower operating expenses. Research and development expenses increased to approximately $6.8 million for the three months ended September 30, 2024. That's up from $6.4 million for the three months ended September 30, 2023. The increase of $0.4 million was primarily attributable to higher manufacturing expenses, which was partially offset by lower clinical costs and personnel expenses. General administrative expense decreased to approximately $3.4 million for the three months ended September 30, 2024. from approximately 4.1 million for the three months the preceding year. The decrease of 0.7 million was primarily attributable to lower personnel costs and professional fees. The overall operating expenses decreased to approximately 10.2 million for the three months end of September 30, 2024, down from 10.5 million for the three months end of September 30, 2023. Our net interest expenses increased to approximately $0.5 million for the three months ended September 30, 2024, and that's up from $0.3 million for the three months ended September 30, 2023. Our cash and cash equivalents at September 30, 2024 total approximately $50 million. And with that, I'll turn the call over to the operator for a Q&A session.

Thank you, sir. Ladies and gentlemen, we will now be conducting the question and answer session. If you would like to ask a question, please press star then 1 on your telephone keypad. A confirmation turn will indicate that a line is in the question queue. You may press star 2 to leave the question queue. For participants making use of speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question comes from... Louise Chen of Cantor Fitzgerald. Please go ahead.

Hi. Thanks for the updates today and taking my question here. So I have two questions for you. Just wanted to ask you, when would you expect an interim look at your Versatile 003 data? And then what's your latest thinking on the opportunity for Versatile 003 since I think the landscape has changed a little bit since when you first started the program? Thank you.

Hi, Louise. Thanks a lot for your question. So I will start with the second part of your question, the landscape considering Keynote 689. Louise, I assume that that's the correct question? How do we view the impacting change in the landscape with regards to 689?

That's correct. Thank you.

Yeah, so Keynote 689, very interesting early data. they are looking primarily at neoadjuvant and adjuvant treatment of head and neck cancer. I think when we saw that initial data, we felt it was very important to take a step back and really analyze how that could potentially impact our population of patients. As you know, our Versamil 003 trial is looking at patients who are recurrent and or metastatic, but also checkpoint inhibitor naive. And so if patients are getting treated with checkpoint inhibitors early in the treatment process, it could potentially impact the number of patients who are recurrent metastatic and checkpoint naive. So the first thing we did was to put together a steering committee of key opinion leaders who treat these specific patients, some of who were actually on this trial and really understood that Keynote 689 trial design very well. And so the other thing we did separately from that was to independently have a firm perform a survey of 50 additional head and neck cancer experts who typically treat these patients. In short, the feedback we got from the experts was that in this study, there was a very small population of patients who could be allowed to be HPV positive, but those patients would have to, one of the key criteria for this particular approach was the patients have to be eligible for surgery. In the HPV positive population, those patients are typically not candidates for surgery and very few of those patients would be recommended for surgery. So as a result, the feedback we got from the experts was that our population of HPV 16 positive patients does not appear to be potentially impacted with the Keynote 689 study, right? And that was the same response we got from the key opinion leaders who we actually met with and those who were also surveyed independently. And so those responses were consistent. Now, what we also found out from these surveys and these discussions was, as we have mentioned in the past, based upon the literature reports, the population of HPV16 positive patients appears to be increasing significantly. So head and neck cancer, as you know, has been described as a silent epidemic, with these incidences increasing significantly projected over the next 10 to 20, 30 years. This is being driven predominantly by HPV16 specifically. And what we found out from these key opinion leaders, both in the United States and Europe, is that today at least about 70% of their patients are actually HPV16 positive, which aligns very well with what the literature has projected would be the change in the landscape in head and neck cancer. So overall, The feedback we received was that this population is the right population for us to be looking at. This population of patients is increasing significantly. And the Keynote 689 study, even if Keytruda is approved in that early stage setting, would not have any significant impact on our specific population. This would impact mainly HPV negative patients, not HPV positive. So that was a favorable and important outcome for us to then proceed, have the comfort to proceed with the study based upon that thorough analysis that had been done. Now in terms of the timing, so what we expect, we will provide some updates hopefully next quarter once we start the trial and open the sites and start enrolling because the time to read out is primarily dependent upon enrollment rates. What we estimate today is that it's probably going to take us about 18 months to complete the enrollment. And shortly after that, maybe about six months after that, we expect the first interim data readout. But that will be confirmed in terms of what we anticipate those enrollment rates will be once we open up these sites next quarter and start the enrollment process. Before I hand over, I'll go to Kirk and see, Kirk, if there's anything I missed or anything you would like to add to that response.

No, that's correct. The enrollment duration, which we're very confident of because nothing to emphasize is the number of sites that were in the Versatile 002 previous study. Almost all of them have wanted to be a part of the 003 study. So that really increases our confidence that this enrollment duration will be around 18 months, and with that first interim analysis coming six months after that. And that, of course, is driven, as Frank said, by how fast we enroll, but also by the number of deaths, the events that occur.

Thank you. You're welcome. The next question comes from Mike Mumtani of B-Rolly.

Please go ahead.

Hi, good morning. Thanks for taking our question. This is Ali on from my end. So I had a couple of questions. The first question is you showed promising data from or immunocom at Astro. I was expecting to see if you if you're planning any phase three in near future. And also, I was curious to know how you position yourself with Merus EGFR-specific in first-line head and neck cancer, which, you know, they showed pretty 75% ORR in HIV-positive patients, and they already started their phase 3. So, I know the sample number was small, but I just wanted to see your view on that. Thank you.

Thanks, Ali, for those questions. Let's start with the second portion again in terms of how we position ourselves versus Meris. I think Meris' data is quite impressive. They are focusing very differently from PDS. We are specifically looking at HPV16-specific head and neck cancer, which is the largest and most rapidly growing population of these patients. Their approach is very different from PDS's approach. It's a bispecific antibody targeting the EGFR antibodies. So you know that today's cetiximab is the EGFR antibody. If you compare the results that Keynote 048 presented, that Keynote 048 study where they looked at Keytruda, Keytruda plus chemotherapy and the EGFR antibody. The results from that study show very clearly that you had the highest objective response rate with the EGFR antibody. However, you had the lowest median overall survival with that EGFR antibody. That's published. That is one of the key reasons why the FDA made it very clear to us that in this specific indication, they are only going to approve a product based on median overall survival because objective response rates do not translate to survival. So that's very important. Now, if you look at our data, some of the data that I just walked through, looking at how the results have progressed and matured over the last year, and compare it to some of their results. For example, if you look at the patients who have deep tumor regression, 90 to 100% tumor shrinkage, you see with PDS's responses, we have 21% of those patients. So every one out of five patients has a near, almost complete elimination of their tumors. That is unparalleled. Whatever peer you look at, whether it's HPV negative, HPV positive combined, those results are clearly outstanding versus anybody else's results, right? So you're looking at just, when you talk about objective response rates, you're looking at one specific parameter. What we have done is to get comfortable in what the KOLs have done is to look at the breadth of responses overall. What's the objective response rate? Remember, objective response rate only looks at patients who have 30% or more tumor shrinkage, right? That's what objective response is looking at. So it's one narrow evaluation of those patients' responses. We look at that. We look at 90 to 100% tumor shrinkage. And very importantly, when you compare our data in terms of the durability and the robustness, largest number of patients treated to date among our peers, right? 53 patients reported. 16 months median follow-up duration. So we have not only the largest number of patients, but also the longest follow-up. So we have the durability of these responses showing that the responses are actually getting better with time, which is very important comparing contrast and immunotherapeutic approach versus tumor killing, right? If you're generating the right type of immune responses, what you want to see is you're not going to get an initial burst of killing. That immune response is being generated, and it's being generated with time. You have the memory T cell response, so you're arming the body with the ability and potential to continue that long-term attack on the cancer and provide that patient long-term survival. And that's one reason why it was very encouraging for us to be able to evaluate these results over the last year and see the consistent improvement in these results across boards. That was also very important in informing this updated design, giving us the confidence to be able to do this while continuing that risk-mitigated approach to the clinical design. Again, we have to look at the results in their entirety. to be able to really understand exactly what this immunotherapy is doing versus the more traditional approaches. And we are very confident. We've got very encouraging feedback from the experts regarding the results and the need to move this forward quickly to provide that opportunity for this growing population of patients. So Ali, I hope that answered the second part of your question. And before I go to the first part, I'll go to Kirk again before I go to the first part to see if he has anything to add to that part.

No, I think you covered everything except for the fact the specificity of our treatment with HPV positive, the merest data, although as Frank went through, somewhat impressive on responses, but no survival data. They've only treated for HPV positive patients. so that the bulk of their results are in HPV-negative patients this time. And again, emphasizing the lack of overall survival in these patients, because the FDA knows that the past large trials of LEAP-10 and also KEEN-H48, you did have good responses, but it did not translate into an improvement in overall survival.

And that's why they've emphasized that this should be the endpoint of all these trials, including ours. Thank you. Thanks a lot, Kirk.

And so Ali, to go to the first part of your question with the ImmunoServe. So as you mentioned, we were extremely encouraged with the results from the ImmunoServe trial. So ImmunoServe, as you recall, compared our Versamune HPV plus chemoradiotherapy in locally advanced cervical cancer. The standard of care today allows for a good a good evaluation in terms of comparing with where the stand-up care is today. The stand-up care is the same CRT combined with Keytruda. So that gives people a really good reference point in terms of how this is performing potentially. And what we reported was that in our study, the patients get five doses of versamine HPV. In the patients who got all five doses of Versamine HPV, the 36-month overall survival rate was 100%. We have never seen that in any of these studies to date. In the patients who had at least two doses of Versamine HPV, the 36-month overall survival rate was 84.2%. Again, very encouraging. When you look at Keytruda plus the same chemoradiotherapy, the 36-month overall survival rate reported and published today is 82.6%. So very encouraging results. When we go to progression-free survival, again, very similar results. When you look at the 36-month PFS rate in the patients who took all five doses of Versamine HPV, 36-month PFS rate was 100%. If you look at the published Keynote A18 study with Keytruda plus CRT, again, I think that's in the high 60% range. Again, so very encouraging results. We saw complete responses of 88% in patients who got two or more doses of the Versamune HPV. So based upon that data, what we have done is we've assembled, gone to, again, key opinion leaders, because we always want to make sure we're making very informed decisions, putting together an advisory board to discuss the results and determine what the next steps should be in getting this out to hopefully an approval in the near future for cervical cancer. But that process of talking to the experts reviewing the data, reviewing the landscape, and looking at the right positioning for this particular product in the cervical cancer space is currently ongoing.

And we'll provide an update on that once that decision is made. Thank you so much. You're very welcome.

The next question comes from Robert Laboya of Noble Capital Markets. Please go ahead.

Good morning. The previous design of the Versatile O3 trial had an arm with the combination of First Immune HPV, Pembrolizumab, and PDS-01-ADC, similar to the Triple Therapy Phase 2 trial. What is the status of that arm and plans to develop ADC01?

Hi, Robert. Thanks a lot for your question.

So you're probably remembering a number of iterations ago. So we had actually proposed initially to the FDA that we would have a three-arm trial. The FDA in principle was in agreement, however, As you recall, you may recall that the FDA also agreed that the fastest approach to an approval would be to focus on the two-arm study first. We proposed a dose optimization for the IL-12, the PDS-01-ADC, which the FDA agreed with. However, the FDA also requested a couple of additional safety studies that we felt could potentially extend the duration before we get to that data readout. And so both PDS and the FDA agreed that the fastest approach would be to focus on the double and do that dose optimization in parallel. And so that's the approach we're taking today, moving forward as quickly as we can with the double, get that double to the finish line, and then we will do that dose optimization of the triple of the PDS-01-ADC in parallel and then determine what the best timing would be to add that to the double. Robert, does that answer your question?

Yeah. Any timing on the development of those safety studies?

No. To date, all our focus is on getting Versatile 003 up and running. Once we get Versatile 003 up and running next quarter, we'll then get back to that dose optimization study. But the current focus is primarily on getting Versatile 003 up and running.

Okay, great. Thank you very much. You're welcome.

Ladies and gentlemen, we have reached the end of our question and answer session. I will now hand over to Dr. Bidu Oddu for closing remarks.

Thank you very much, operator.

I will close by saying that we are very eager to get back into the clinic with our Versatile 003 trial early in 2025. We are confident that the updated trial design can enroll in a timely fashion and that our fast-track designation, mature and durable survival data, and cost-effective plan for Versamine HPV can position us well to be the first product of its kind on the market in head and neck cancer. Our engagement with investors and clinical investigators has validated our approach and the long-term opportunity we believe Versamune HPV presents in the HPV-positive head and neck cancer indication. We look forward to keeping you updated on our progress.

Thank you very much again.

Thank you, sir. Ladies and gentlemen, thank you for attending, and you may now disconnect your