PDS Biotechnology Corporation

Good morning, and welcome to PDS Biotech's fourth quarter and full year of 2024 earnings conference call. At this time, all participants are currently in listen-only mode. Following the formal presentation, we'll open the call up for a question and answer session. At this time, I would now like to turn the conference over to Tom Johnson, LifeSci Advisors.

Please go ahead, sir. Thank you, operator. Good morning, everyone, and welcome to PDS Biotech's 2024 results and clinical program update call. I'm joined in the call today by the following members of the company's management team. Dr. Frank Beto-Addo, Chief Executive Officer, Dr. Kirk Shepherd, Chief Medical Officer, and Lars Bostar, Chief Financial Officer. Dr. Beto-Addo will begin with an overview of the company's recent progress in its clinical development program. Mr. Bostar will review the financial results for the 2024 fiscal year. And Dr. Shepard will then join the call to help address questions from covering analysts. As a reminder, during this call, we will make 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 cautionary statements in our press releases and risk factors discussed in our filings with the SEC, including our quarterly reports on Form 10-Q and annual report on Form 10-K, and these cautionary statements made during this call. We've seen no obligation to update any of these forward-looking statements or information. Now, I'd like to turn the call over to Dr. Beto Adu. Frank?

Thank you, Tom, and good morning, everyone. It's our pleasure to speak with you again and to provide this brief update on our progress in advancing our clinical programs. 2024 and the first weeks of 2025 have been busy and productive, led by the initiation of our versatile 003 Phase III clinical trial, of averse immune HPV plus pembrolizumab compared to pembrolizumab as a potential treatment for first-line recurrent and or metastatic HPV 16 positive head and neck squamous cell carcinoma, HNSCC, or head and neck cancer. Patients with HPV 16 positive head and neck cancer represent a large, fast-growing population in need of targeted therapies to treat the underlying cause of the cancer. It is projected that by the mid-2030s, HPV16-positive head and neck cancer could be the most prevalent type of head and neck cancer in the United States and Europe. Considering the strength and durability of the clinical responses observed in our versatile 002 Phase II study, we are pleased to get this registrational trial underway and are confident in the potential of our innovative combination of Versamune HPV and Pembrolizumab to improve patient outcomes and enhance the standard of care. In the coming weeks, we expect to continue to activate additional clinical sites and look forward to the continued progression of this trial. As we announced previously, The Versatile 003 trial design includes approximately 350 patients. The two-arm registrational trial design has been given the go-ahead by the U.S. Food and Drug Administration, FDA. The two arms of the trial include a treatment arm of the Versamune HPV pembrolizumab combination versus the control arm of pembrolizumab only. Patients are enrolled in a 2-2-1 randomization. Median overall survival is the primary endpoint. The trial design is informed by the observed durability of the clinical responses in our Versatile 002 Phase 2 clinical trial seen over the last year, with the most recent data presented at the European Society for Medical Oncology, ESMO, Congress in September. These 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 17.9 months. Promising durability and long-lasting anti-tumor immune responses were demonstrated with improvement in all clinical response outcomes between the data presented in June of 2023 at the American Society of Clinical Oncology ASCO Conference and September of 2024 at ESMO, a period of a little over a year. 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%. the number of patients with complete responses increased from 3% to 9%. The most common treatment-related adverse events overall were grade 1 and grade 2 transient injection site reactions. Treatment-related adverse events of grade 3 and higher were seen in 9 out of 87 patients, or 10%, of immune checkpoint inhibitor-naive and immune checkpoint inhibitor-resistant patients in the trial. There was only one grade four treatment-related adverse event. The encouraging patient survival and clinical responses, coupled with promising tolerability as seen in the VIRST-L002 clinical trial, underscores our 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. Elsewhere in our pipeline, we were pleased to announce FDA clearance of our investigational new drug IND application for the combination of versimune MUC1 and PDS01 ADC to treat metastatic colorectal cancer. This is a significant development for the company, as several highly prevalent solid tumors are MUC1 positive, including non-small cell lung cancer, ovarian cancer, breast cancer, liver cancer, and others. We are pleased to announce that we continue our strong relationship with the National Cancer Institute and this Phase 1-2 clinical trial is scheduled to be run under our collaborative research and development agreement with the National Cancer Institute. PDS Biotech will continue to focus our efforts on progressing the Versatile 003 Phase 3 clinical trial. Last October, Data from our ImmunoServe Phase II clinical study evaluating Versamune HPV with chemoradiation to treat locally advanced cervical cancer were presented at the American Society for Radiation Oncology ASTRO annual meeting. The presented data demonstrated promising survival, clinical activity, and a compelling safety profile. Based on research and continued in various HPV positive cancers conducted by PDS Biotech and by independent researchers who recognize its potential, Versamine HPV appears to work in combination with a variety of therapeutic agents to generate clinical responses and promote improved survival in patients with a favorable safety profile. Also last October, The rationale and trial design for the National Cancer Institute-led study evaluating our IL-12 fused antibody drug conjugate PDS01-ADC in combination with Astellas enzalatamide versus enzalatamide 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 Ravi A. Madan, MD, Head Prostate Cancer Clinical Research Section, Janitor Urinary Malignancies Branch, Center for Cancer Research, National Cancer Institute, part of the U.S. National Institutes of Health. Now I will turn it over to Lars for a review of our results for 2024. Lars.

Thank you Frank and good morning everyone. Net loss for the year ended December 31, 2024 was approximately $37.6 million or $1.03 per basic and diluted share. This compares to a net loss of $42.9 million or $1.39 per basic and diluted share for the prior year period. The reduced net loss was primarily the result of decreased operating expenses, which were partially offset by increased net interest expense. Research and development expenses for 2024 were $22.6 million compared to $27.8 million in 2023. The decrease of $5.2 million was primarily attributable to decreases in clinical costs of $4.1 million, personnel costs of $1 million, and professional fees of $0.1 million. General and administrative expenses for 2024 were $13.8 million compared to $15.3 million in 2023. The $1.5 million decrease was primarily attributable to decreases in professional fees of $1.3 million and facilities costs of $0.2 million. Total operating expenses for 2024 were $36.3 million, which compared to $43 million in 2023. Net interest expense was $2.2 million for 2024 compared to 1.3 million in 2023. This change was due to increased debt interest and lower interest income on the company's cash balances. On February 27, 2025, we announced an up to $22 million registered direct offering. The securities purchase agreements with new and existing healthcare-focused institutional investors included 11 million upfront gross proceeds with up to an additional $11 million of aggregate gross proceeds upon cash exercise in full of warrants issued to the investors. The company's cash balance as of December 31, 2024, was $41.7 million. And that balance, of course, does not include the aforementioned direct offering, which we concluded in February. With that, I'll just turn the call back to the operator.

Thank you. We'll now be conducting a question and answer session. If you'd like to ask a question at this time, you may press star 1 from your telephone keypad, and a confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to withdraw your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment, please, while we poll for the first question. Thank you. Thank you. And the first question comes from the line of Joe Pankinas with HC Wainwright. Please proceed with your questions.

Hey, guys. Good morning. Thanks for taking the questions. So first, I wanted to get a sense of the enrollment trajectory for Versaimmune 003. And I guess, well, projected timeline is number one, and I know that might be hard to project since it's very early. But the sites that you're targeting, what kind of balance are you looking at with regard to sites that are familiar with Versaimmune versus new sites that might require, you know, some level of a learning curve?

Thank you, Joe, for the question. Kirk, I'll hand that question over to you.

Yes. So we're happy that, as you know, we initiated the first site this month. And we're happy also to say that the sites that were involved, almost all of them from the phase two trial are re-engaged with us now with phase three. And as I think you referred to in your question, this helps out a lot as far as their familiarity with the drug. I think their belief in the good results. And so that's really sped us along quite a bit. As far as the patient accrual in the future, I mean, you're right. That'll be determined by how fast we bring these sites on. And so far, we're tracking very well. And, of course, how well each of the sites do perform.

No, that's helpful. Thanks. And I guess, you know, as Lars was describing, too, In this day and age, you guys are, I guess, in a good position to have a decent cash balance. So, I guess, as people look to study completion and pipeline development, how do you view the current funding environment for your current studies?

Lars, I'll hand that over to you.

Sure. Hey, Joe. Thanks for the question. Yeah, you're right, as I mentioned, we did raise 11 million recently and definitely the current funding environment and market conditions are difficult and challenging. So we're quite pleased that we were able to raise the funds in a way that enables us to start the trial. And so we're progressing as Kirk just mentioned. But of course, I think it should be clear also that we currently don't have enough uh raised or on the balance sheet for that matter to complete the trial so our plan is to raise necessary capital in a stepwise manner uh as we make progress with with our phase three trial and our plan is to essentially make use of all options available to us which includes equity uh and non-diluted sources such as debt and we will continue to balance our funding needs against dilution of current shareholders

No, that's totally fair. I appreciate that. And when you said potentially non-dilutive options, I guess maybe I'll throw the potential of business development into the mix. And, you know, what do you think that role might play in being able to bring even pipeline programs forward?

So, sorry.

So in terms of non-dilutive, right, I think that includes, as I mentioned, debt, but it includes all all various sources, right? So we don't necessarily want to get ahead of ourselves in terms of talking about specific, you know, partnerships or specific collaborations. Suffice to say, and I think it's also important, as Frank alluded to in his prepared remarks, that most of our pipeline beyond the phase three are essentially IITs in which our, you know, our funding is very limited and the funding needs are very limited as far as we're concerned. So we're focused solely on Versatile 003 with regard to our funding needs.

Totally fair. Appreciate all the comments, guys.

The next question is from the line of Mayank Montani with B-Riley Securities. Please receive their questions.

Yes, good morning, team. Thanks for taking our questions and pleased to see the Phase 3 Versatile 003 trial kicked off. I see you saying, Presley, there are multiple interim readouts built in the study and your total patient sample size came in a bit lower than perhaps what you had originally thought. We would love to hear the rationale for that and also, obviously, any color you can give on how you've built in these OS interims

And then I have a follow-up.

Hi, Mike. Thanks a lot for your question. So, yes, you are correct that the trial size was initially over 400. As I alluded to in my remarks, we have seen significant durability of the responses and also significant improvement of all the clinical outcomes over the last year. good durability of the median overall survival, which is going to be our primary readout for this trial. So based upon the durability of the responses and the increases in those responses, we're able to go back to our statisticians to tighten the trial design based on the fact that we had a lot more confidence in those numbers due to the prolonged follow-up of those patients. And so that took it from over 400 patients down to 350 patients with the same power, by the way. So we retained the statistical power. That amended IND was then presented to the FDA who gave us the go-ahead with this redesigned trial. And so as you know, median overall survival, as you mentioned, is our primary data readout. And so the goal here based upon the data we've seen in our Versatile 002, which is highly encouraging, was to give us the opportunity, if we are able to replicate these results in the phase three clinical trial, give us that opportunity to be able to discuss results early on with the FDA. And so our design built in two interim data readouts. The first interim data readout will come approximately six months after full enrollment into the trial. And these endpoints are based on specific death events. So they're based on a certain number of death events occurring by that time. And then 12 months after that, we give ourselves another interim data readout And so really what this trial design does based on median overall survival, which has been really durable, is to give us that opportunity to have early discussions with the FDA regarding potential accelerated approval pending what the data readouts look like at that specific time. Kirk, is there anything you would like to add to that?

No, Frank. I think you covered it well. Yeah, I think the important thing is that we do have a good opportunity at the first interim analysis to go back to the FDA with a survival data for hopefully an accelerated review and then an approval. But no, I have nothing to add to what you said before.

Thank you. Yeah, so what we see on clinicaltrials.gov, 2029, essentially you're saying that the timeframe for first readout could be maybe half of that period if I had to kind of get to the bottom line here. Frank?

Yeah, I don't think we want to get ahead of ourselves. And also, as Kirk said, it will take us a few months to understand the enrollment rates, how these sites are enrolling patients, because as you know, really the timeline for a clinical trial is absolutely dependent on the trial recruitment rates. So it will take us a few months to get a good handle on how quickly these patients are coming in. The good thing, as Kirk mentioned, is the fact that most of our Versatile 002 sites are interested in participating and are participating in this phase three clinical trial. So we are hopeful that that familiarity with the trial design, with the process of enrolling patients, will help speed up the process and also the really promising data which has been generated in the phase two, which has given a lot of these investigators quite a bit of confidence in both the trial design and the Versamune HPV product itself. So we're hopeful that we'll have a pretty rapid enrollment, but it will take us a few months to get a handle around what the projected timelines could be.

Yeah, that was quite evident in your December KOL event. Just switching gears quickly on the initial tumor indications of priority for the MUC1 candidate, and it seems like you're doing a PDS01-ADC combination strategy here, at least within CRC, and just maybe higher level, you know, is the work on IL-12-ADC head and neck on pause now, and you're letting these ISDs sort of drive data generation activity, including obviously in the prostate setting that you have with Xtandi. Thanks again for taking your questions.

Well, thanks a lot, Mayang. Very good question. So you're right that today our focus is on the Versatile 003, and that is where the company is applying our capital. But to the point you made, we have actually been very successful in partnering with the National Cancer Institute and other top-tier academic institutions, right? So those institutions are able to independently progress some of these phase two trials, including what we're doing with the MAC-1 and PDS-01-ADC. So the combination is based on the published preclinical studies that were done by the NCI, where they looked at various combinations with a versamine-based product, as well as PDS-01-ADC, and also with checkpoint inhibitors. And we saw very strong synergy. between diverse immune-based product and PDS01-ADC. So as you know, PDS01-ADC is a tumor targeting IL-12. What IL-12 does is it activates T cells, but by getting it into the tumor specifically, we're able to really activate those T cells within the tumor microenvironment itself, right? So we believe this is a highly promising combination. So does the National Cancer Institute. And there are a number of tumor types that express, highly express MUC1. We've selected colorectal cancer as the first target to demonstrate that proof of concept in that phase one, phase one, two human clinical trial. But then that then allows us to progress into multiple tumor types, just very similar to what we've done with adverse immune HPV, right? So as Lars mentioned, when we talk about non-dilutive funding, We have done this quite effectively with a number of programs to progress all these programs in cervical cancer, the triple combination, all types of HPV cancers, and now Mach 1 with our collaborators who are putting their capital to work to progress these programs for us. And then you mentioned the triple combination. With the triple combination, our current plan is to follow what we deem to be potentially the simplest regulatory strategy. which will also feed into our product lifecycle management strategy for both Versamune and PDS01-ADC. So one scenario is to get the Versamune HPV plus Pembro approved. So once that doublet is approved, we can then add PDS01-ADC to that approved combination to develop a second generation product that may treat patients who are both checkpoint inhibitor naive in addition to those who are checkpoint inhibitor resistance. As you know, in the recent JAMA Oncology publication that we announced, we see extremely promising survival results, both in checkpoint inhibitor naive and checkpoint inhibitor resistant patients. And we see this across board with all types of HPV-related cancers, right? In that publication, they show data from anal cancer, cervical cancer, vaginal vulva, in addition to head and neck cancer. So these present us with some real opportunities as we develop the product and also potentially get the second generation product out there after the doublet has been successfully approved. Mayank, I hope this answered your question.

Yes, there were multiple parts. Thank you for taking all of them. And I'll hop back in the queue.

No problem. Thank you.

The next question is from the line of James Malloy with Alliance Global Partners. Please proceed with your question.

Good morning. Thank you for taking my questions. Just to follow up on that last point, Frank, so the phase three triple, would that even start before the phase two double trial wraps up, or is that something that will wait for the phase two double trial data before going into the phase, starting the phase three triple?

Hey James, as I just said, we're doing this as part of our anticipated product lifecycle management strategy and also following the simplest regulatory strategy. So the simplest regulatory strategy would be to get the doublet approved. Once the doublet is approved, we can then add the IL-12 on top of that approved doublet. It simplifies the regulatory pathway of having multiple investigational products involved in the trial right and so based upon our discussions with the FDA and suggestions that have been made we see this as potentially the simplest regulatory strategy and also a good product lifecycle management strategy in head and neck cancer specifically right the initial focus is on checkpoint inhibitor naive patients but once we add IL-12 on top of that potentially this could address both ICI naive and and ICI-resistant patients based upon the data that was recently published in JAMA Oncology.

Perfect. Thank you very much. And then- You're welcome.

What's the expectation for the MUC1 sort of kicking off and sort of the next cut point for potential data? And then the TARP, the Phase I TARP, is that still on track for potential IND in 2025?

No, so let's start with the Mach 1. So with the Mach 1, as I mentioned, that is going to be led by the National Cancer Institute. And so the IND has been successfully filed, and we've had the green light from the FDA. And so right now, what we would do would be we would be dependent on the National Cancer Institute's timelines. And so we will wait to hear from them in terms of their intended start date. So, again, we don't want to put any start dates out there until they have been confirmed by the National Cancer Institute. They will be leading the trial while we focus on the Versatile 003 trial design.

Very similar approach to the triple. Understood.

And then is the TARP, 102-IND and TARP expressing cancers, is that still potentially possible? On for 25, is that also NCI-led?

No, the TARP, right now we're focusing on the Mach 1 and the reverse immune HPV. We have not presented any timelines yet for the TARP. The TARP, as you know, is the focus there is prostate cancer. Approximately 95 and higher percent of prostate cancers express the TARP antigen. But for now, once we get a better handle on how the Mach 1 is progressing, And the Versatile 003 will then provide some guidance on how we intend to progress the TAR program. But we have not provided any guidance to date on progression of the TAR program. Today, our focus is the Versamine HPV and also now handing the Mach 1 over under our creator to the National Cancer Institute for further development.

Great. Thank you very much for taking the questions. You're welcome. Thank you. At this time, I'll turn the floor back to Dr. Bedouin for closing remarks. Thank you very much, operator.

So, in closing, we are very pleased to have initiated the Versatile 003 Registrational Trial this quarter. This study is the first phase three clinical trial specifically in the growing population of HPV16 positive head and neck cancer. We are excited based on the strong Versatile 002 results and our fast track designation about the potential for Versamine HPV to be the first product of its kind on the market in head and neck cancer. We expect to provide final results from our ongoing phase two Versatile 002 study later this year. Our engagement with investors and clinical investigators has validated our approach and the long-term opportunity that we believe the HPV16-targeted immunotherapy presents in the HPV16-positive head and neck cancer indication. We look forward to keeping you updated on our progress. Thank you very much.

Thank you. This will conclude today's conference. We disconnect your lines at this time. We thank you for your participation.