PDS Biotechnology Q1 2023 Earnings Call Transcript

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May 15, 2023

There are 9 speakers on the call.

Operator

Hello, and welcome to the PDS Biotechnology First Quarter 2023 Earnings Conference Call and Webcast. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. It's now my pleasure to turn the call over to your host, Gabby DeGravina, Investor Relations. Please go ahead, Gabby.

Speaker 1

Good morning, and welcome to PDSCO Technologies' Q1 2023 Earnings Conference Call and Audio Webcast. On the call from the company are Doctor. Frank Saitowato, Chief Executive Officer Doctor. Loren B. Wood, Chief Medical Officer and Matt Hill, Chief Financial Officer.

Speaker 1

Earlier this morning, PDS Biotech issued a press release announcing financial results for the quarter ended May 31, March 31, 2023. We encourage everyone to read the press release as well as PDF Biotech's report on Form 10Q, It will be filed with the SEC shortly. The company's press release is available on the PDS website at pdsbiotech.com. In addition, this conference call is being webcast and will be archived on the company website for future reference. Before we begin, We need to remind everyone that on today's call, the company will be making forward looking statements regarding regulatory and clinical candidate development plans as well as research activities.

Speaker 1

Certain information in this presentation may include forward looking statements, including within the meaning of Section 21E of the United States Securities Exchange Act of 1934 as amended and Section 27A of the United States Securities Act of 1933 as amended concerning PDS Biotechnology Corporation and other matters. These statements may discuss goals, intentions and expectations as to future plans, events, results of operations or financial condition or otherwise based on current release of the company's operations As well as assumptions made by and information currently available to management. These statements are subject to risks and uncertainties that may cause actual results A description of these risks can be found in Peds Biotech's most recent filings with the SEC. You are cautioned not to place undue reliance on these Looking statements, which speak only as of the date of this conference call. Except to the extent required by applicable law or regulation, PDSB undertakes no obligation to update the forward looking statements included today to reflect subsequent events or circumstances.

Speaker 1

I will now hand the call over to Frank.

Speaker 2

Thank you, Gabby, and thank you to everyone for joining our Q1 2023 call today. We continue to be highly optimistic about the future of PDS Biotech. Our goal as a company is to develop novel We plan to commercialize our lead clinical candidate PDS-one hundred and one for first line treatment of recurrent or metastatic HPV positive head and neck EDS-one hundred and one is a novel investigational HPV targeted immunotherapy that stimulates a potent Targeted T cell attack against HPV positive cancers. In the randomized Phase 3 Verstell-three trial, PDS-one hundred and one will be studied in combination with Merck's anti PD-one therapy, KEYTRUDA, versus KEYTRUDA monotherapy, which is the standard of care for this indication. We look forward to initiating the trial later this year.

Speaker 2

At ASCO next month, we plan to present updated interim results for the Phase 2 VERCEL002 trial of PDS-one hundred and one and KEYTRUDA, a first line treatment for recurrent or metastatic HPV-sixteen positive We recently announced acceptance of our abstract that will be a poster presentation summarizing the interim data from this trial at ASCO 2023. We are excited to say that it has also been selected for review and discussion during an expert head and neck cancer panel discussion. The abstracts Scheduled to be published on Thursday, May 25. On Tuesday, June 7 at 8 am Eastern Time after our presentations, We plan to host a conference call to further discuss the data presented at ASCO. We'll issue a press release to announce the details around this event.

Speaker 2

The incidence of HPV positive head and neck cancer continues to grow rapidly. Many of these patients are very sick and there is a lack of effective HPV targeted therapies to address the disease. Our presentation at ASCO provides us with an opportunity to continue to share promising PDS-one hundred and one data with the clinical and scientific community and how the PDS-one hundred and one targeted immunotherapy may allow us to address the significant We have made tremendous progress this past year, Achieving several significant milestones as we continue to advance our oncology pipeline. To date, we have demonstrated anti tumor activity of PDS-one hundred and one in almost 100 patients Across different types of HPV positive cancers and at various stages of the disease with consistent results across all Phase II trials at over 30 clinical sites. Substantial biomarker data also highlights PDS-one hundred and one's induction of powerful tumor infiltrating HPV-sixteen specific killer T cells.

Speaker 2

Favorable tolerability has been demonstrated in approximately 120 patients to date, where the PDS-one hundred and one has been delivered as a monotherapy In combination with standard of care chemoradiotherapy or with approved and investigational immuno oncology agents. The favorable benefit to risk profile of PDS-one hundred and one warrants confirmation of its activity in a controlled Now let's discuss the details of the Versatile-three trial. During the Q1, we announced that we completed key tech transfer, scale up and manufacturing We have also continued conversations with the European regulatory agencies and are awaiting their feedback on the Versatile 3 study design. We affirm our plan to submit an investigational new drug or IND amendment to the U. S.

Speaker 2

Food and Drug Administration We'll randomize subjects 1 to 1 with PDS-one hundred and one in combination with KEYTRUDA as the active arm and with KEYTRUDA monotherapy as the comparator arm. We intend to conduct the trial at 90 to 100 clinical sites globally And to enroll approximately 330 individuals. The primary endpoints are overall survival OOS and Progression Free Survival or PFS. Additionally, there will be 2 planned interim analysis that we anticipate may provide early opportunities for discussion with the FDA Regarding accelerated approval. Initiation of this trial is a significant milestone for PDS Biotech and we look forward to starting the Versatile-three trial in the Q4 of this year.

Speaker 2

Also on our commercialization priority list is our triple combination of PDS-one hundred and one, PDS-three zero one, Our novel investigational tumor targeting IL-twelve and a commercial immune checkpoint inhibitor or ICI. This combination used in an investigational ICI has been evaluated in a Phase 2 clinical trial in all types of PV positive cancers, including anal, cervical, head and neck, penile, vaginal and vulva cancers In both ICI naive and ICI refractory cancers with highly promising objective responses and survival benefit demonstrated in both. The Phase 2 results corroborated the results of the extensive published preclinical work Done by the National Cancer Institute to understand and develop the combination. We announced a successful meeting with the FDA to discuss next steps for the program. As we last reported, we plan to commercialize this combination first in ICI refractory head and neck cancer, The largest and most rapidly growing of the HPV cancer markets.

Speaker 2

To inform the design of the registrational study, We anticipate initial data from the refractory arm of the Versatiles-two study evaluating the combination of PDS-one hundred and one and KEYTRUDA in ICI refractory head and neck cancer during the Q3 of this year. This is the exact indication and population of patients we will be treating with the triple combination. We therefore believe that it is essential for us to obtain the data from the VERCEL-two trial before finalizing the design of the potential registrational study. We will hopefully be able to provide an update on the results And clinical design in the near future. Last quarter, we announced our acquisition of Merck KGaA's novel antibody conjugated IL-twelve, now designated PDS-three zero one.

Speaker 2

Last month, we hosted our 2nd key opinion leader, KOL, roundtable discussion. The discussion, which focused on IL-twelve, included National Cancer Institute immuno oncology experts, Doctor. James Gulley and Doctor. Jeffrey Schlom. The discussion highlighted the potential of PDS-three zero one In PDS-three zero one, IL-twelve is conjugated to an antibody and utilizes the antibody to target areas of tumor necrosis.

Speaker 2

The targeting antibody brings IL-twelve into the tumor and simultaneously limits while promoting its anti tumor benefits. By targeting the IL-twelve to the tumors after a simple subcutaneous injection, As seen in the current slide, the IL-twelve is able to make the tumors more visible to T cells, also termed making the tumors hot in promoting T cell infiltration and activation within the tumor. Doctor. Shlom Engali highlighted some of the ongoing investigator initiated trials at the National Cancer Institute. I would like to review some of the studies that were highlighted by Doctor.

Speaker 2

Shlom Ingali during the KOL event last month. Examples of some of these promising preclinical results are shown on the current slide demonstrating in the first plot, Eradication of a lung cancer tumor that is resistant to ICI treatment using the combination of PDS0301 and the histone deacetylase or HDAC inhibitor. In the second plot, we again see the significant reduction of established radiation resistant tumors with the combination of PDS-three zero one and radiation. Based on these promising preclinical studies, As discussed during the KOL event, there are a number of PDS-three zero one National Cancer Institute investigator initiated Phase 2 studies ongoing under PDS Biotech's collaborative research and development agreement with the National Cancer Institute. 4 of these Phase 2 studies in combination with standard of And Kaposi's sarcoma among others.

Speaker 2

To date, PDS0301 has been administered to over 150 patients and has been generally well tolerated even in combination with other cancer treatments. Now I would like to emphasize These studies are being performed at no additional cost to PDS Biotech. That concludes my portion of the call. And I'd like to hand the call over to Matt to discuss the financial summary. Matt?

Speaker 3

Thank you, Frank. Let's now look at our financial results for the 3 months ended March 31, 2023. Net loss for the 3 months ended March 31, 2023 was approximately $9,700,000 or $0.32 per basic and diluted share compared to a net loss of $8,500,000 or $0.32 per basic and diluted share for the same period of 2022. The higher net loss this quarter was due to personnel costs, clinical studies costs and medical affairs expenses. Research and development expenses for the quarter ended March 31, 2023 increased to approximately $5,800,000 Compared to $5,200,000 for the 3 months ended March 31, 2022.

Speaker 3

The increase of approximately $600,000 was primarily attributable to an increase of $200,000 in clinical studies and medical affairs, dollars 800,000 in personnel costs and about $100,000 in professional fees offset by a decrease of $500,000 in manufacturing costs. General and administrative expenses for the Q1 of 2023 increased slightly approximately $3,600,000 compared to $3,300,000 for the same period of 2022. The $300,000 increase was primarily attributable to an increase of $800,000 in personnel costs, which was offset by a decrease of $500,000 in professional fees. Total operating expenses for the quarter ended March 31, 2023 in 2022. In April, we monetized our net operating loss carry forwards in the state of New Jersey, Receiving $1,400,000 for the net sale of tax benefits to an unrelated profitable New Jersey Corporation Pursuant to the company's participation in the New Jersey Technology Business Tax Certificate Transfer Net Operating Loss Program for the tax year 2021.

Speaker 3

We ended our quarter with approximately $65,200,000 in cash. The cash burn was impacted as a result of the $5,000,000 payment to Merck KGaA for the in license of PDS-three zero one and our continued prudent financial discipline and efficient execution of our ATM. I would like to reiterate that the investigator initiated trials on PS-three zero one are at no incremental cost to the company. Our cash balance We'll fund the company operations as well as research and development programs we believe into the Q3 of 2024. This completes my financial discussion.

Speaker 3

And at this time, I would like to hand the call back to the operator for the Q and A session. Operator?

Operator

Thank you. We'll now be conducting a question and answer Our first question is coming from Louise Chen from Cantor Fitzgerald. Your line is now live.

Speaker 1

Hi. Thanks for taking my questions here. So I wanted to ask you on your Phase 3 study, The Versatile 3, can you give more color on how you're looking at the interim analysis, the potential timing around the first interim analysis? And then secondly, can you provide more thoughts on the expert panel that's going to review your versatile 2 study at ASCO? And are you presenting other data at ASCO in addition to 2?

Speaker 1

And if so, what would that be? And then last question is just how do we think about SG And R and D expenses through the remainder of the year, especially in light of the fact you're going to start this Phase 3 study. Thank you.

Speaker 2

Thank you, Luis. I'll answer the first part of your question and then I'll hand over to Lauren to discuss the expert panel At the head and neck cancer session and then to Matt to discuss the SG and A. So the first part of your question, Luis, had to do with How we're looking at the interim data? How we're designing the trial around some of those interim data points? So as I mentioned, The endpoints for the trial are going to be overall survival as well as progression free survival.

Speaker 2

What we're looking at is for the interim data to be meaningful. The goal here is to design the statistical study so that we have robust statistical statistics even around the interim data points. So the first data point will be interim data points for both PFS And then of course, the final readout will be the OS readout. And so those are put in place just to make sure that we're looking at specific number of patients that will give us a significant or strong robustness around the statistics. But also we anticipate that by the time we go to have any of those discussions with the FDA, we'd also have the Versailles-two Study completed and the data from that study to also back up what we will be obtain, what we will be discussing around those interim results.

Speaker 2

Okay. And, Lauren, I will hand over to you to discuss the panel at the ASCO conference.

Speaker 4

Yes. Thanks, Frank, and thanks, Louise, for your questions. So following the presentation of our poster at the Head and Neck poster session that will be held on Monday afternoon, June 6, there will be an ASCO poster discussion of several presented poster abstracts. The expert panel will be looking not only at Versatile 2, but several other approaches to the treatment of head and neck cancer. And during this poster discussion, there will be a specific assessment of the data that's presented and points of discussion by members of the panel.

Speaker 4

We're excited about this because it is an opportunity for greater awareness of Versatiles 2 as well as in the context of discussion of all of the potential approaches that are being presented during the meeting for the treatment of this very challenging population.

Speaker 2

Lauren, I'll add to that that Doctor. Catherine Price from Mayo Clinic We'll be presenting the PDS, PDS Versailles-two study.

Speaker 4

That is correct.

Speaker 2

Okay. Matt, we'll hand over to you for the Q and A.

Speaker 3

Thanks, Frank. Louise, great question. So essentially what we envision going forward in our Objections with respect to the cash burn is that we will steadily ramp up to until we get to about $12,000,000 to $13,000,000 A quarter in cash burn, that's primarily going to be associated with that increase will be associated with R and D expenses, primarily, we don't expect significant increases in administrative costs, except for the manage the company. What you need to add on to that is our non cash stock comp expense, which ran this quarter about $2,000,000 Louise, is that helpful?

Speaker 1

Yes, it does. And this $12,000,000 to $13,000,000 you plan to achieve that By the, say, the Q4, is that what the kind of burn it's going to be? And then if you're saying your add on 2s was like 14% to 15% on a GAAP basis?

Speaker 3

Yes, that will get up there probably by 3rd Q4 of this year.

Speaker 1

Okay. Thank you.

Operator

Thank you. Our next question is coming from Leland Gershell from Oppenheimer. Your line is now live.

Speaker 5

Thank you for the updates and taking my questions. A few questions from me, just again on VersaMune sorry, Versatile 3 with respect to the planned interim analysis. So do you expect to have criteria established with the FDA with respect to what could allow you to potentially garner accelerated approval or would you expect that to be kind of a discussion with the agency when you have those data? 2nd, as there may be a possibility for us to see what could be benefit with the PDX-one hundred and one plus KEYTRUDA combination as a doublet, but in the ICI refractory population as we're still awaiting data Derek from Versatile 2, is there any chance that we you may explore that in addition to the triple combo down the road for those patients. And then finally, the data that were reviewed at the recent event with respect to the entinostat Combination looks quite promising.

Speaker 5

I'm wondering if that's inspired any thoughts of clinical trial work with HTAC inhibitors. Thank you.

Speaker 2

Lilian, thanks a lot for those questions. So starting with the Versedal 3 trial And whether we've discussed those interim points and whether or not they'll be acceptable for accelerated approval with the FDA. As you know, the FDA will not make commitments to whether or not a product will be approved based on accelerated or interim results. It's always let's wait and see the data and have that discussion, right? So the way we have approached this is just to make sure that we have designed in enough patients and that the statistical design is robust enough that those interim data points together with the Versatile 2 results that we give ourselves a really good opportunity to potentially have a positive discussion with the FDA at that point.

Speaker 2

However, also we'll mention that the FDA is currently reviewing our protocol. So the FDA did agree to review our protocol before we actually file the amended IND. So at least we'll have some alignment with the FDA on the approach we're taking before we start it hopefully. And then as relates to PDS-one hundred and one plus KEYTRUDA in the Versed IL-two trial, I think as we've mentioned a number of times, in terms of the checkpoint inhibitor refractory patient population, We are committed to moving that forward together as a triple combination with the PDS-three zero one, which is our tumor targeted IL-twelve. The studies that were performed at the National Cancer Institute were very clear in indicating the benefit of IL-twelve In that checkpoint inhibitor refractory patient population specifically, right, we saw the impact of high dose versus low dose.

Speaker 2

And so it was clear what the role of IL-twelve is in those specific patients. However, what we're looking at in the doublet PDS-one hundred and one plus KEYTRUDA is not to determine whether we move that forward versus the triple, but rather to understand how we finalize the statistical design Of that trial, right? That will give us information on how that doublet is performing in that specific patient population to let us understand exactly what how much delta or buffer we could potentially have versus the standard of care today, right? We just want to make sure that we've taken We've done all these trials for a reason. Each one of these trials is providing us with very important and very significant data.

Speaker 2

And we believe we actually owe that to ourselves and to our shareholders to just make sure that we've extracted all the information that to how we may design and go into that trial. So that's really what we are obtaining from that trial is, are those patients As the doublet providing improved overall survival, for example, how does that compare to what we saw with the triple combination? And how should we design that endpoint based upon what we've seen with the doublet versus what we've seen with the triplet, right? So it's really just going to inform how we design the statistical portion of that study. And the third question you asked was around the HJAC inhibitors.

Speaker 2

Yes, The study the data that was generated in the preclinical studies at the National Cancer Institute with the HDAC inhibitors is extremely promising. And as you know, as I mentioned, this is one of the Phase 2 clinical trials that are currently ongoing at the National Cancer Institute. And one of the benefits with the HDAC inhibitors is that A couple of them already FDA approved. So we can actually perform those studies in FDA approved HDAC or commercial HDAC inhibitors. But you are correct, the preclinical data so far with the combination of PDS-three zero one and the HDAC inhibitors that's been provided by the NCI is extremely promising.

Speaker 2

And for PDS, the benefit of these studies ongoing also are that they are being performed at no additional cost to PDS. So we also get that potential benefit as we've done with a number of our PDS-one hundred and one studies also. Guillen, I hope this answered your questions.

Speaker 5

Yes. No, it did. Thank you. Look forward to

Speaker 2

asking. Thanks a lot.

Operator

Thank you. Next question today is coming from Kapit

Speaker 6

This is Andy Fletcher on for Kelpeth. Thank you for taking the questions. A couple from us on updated results for VersTile 2 at ASCO. Can you give us a sense of how many patients' worth of data we should expect? And are you anticipating the data to be mature enough to present 12 month OS or median OS from the study?

Speaker 2

So Andy, thanks a lot for the question. I'll talk about the first part and I'll hand over to Lauren. Today, the number of patients that in that portion of the trial hasn't been made public yet. The abstracts will be public, I think as we said on May 25th. So all that information regarding the size of the trial, where we are today, number of patients and so forth will all become public on May 25.

Speaker 2

Lauren, is there anything you want to add to that?

Speaker 4

No, just that we will be looking to update the data that was presented in June of last year, where in our initial population of 17 subjects, we had 9 month PFS rates of 54% and overall survival rates at 9 months. So that data will be updated in a larger population for a longer duration of monitoring and the specific details will be in the release that comes out on May 25.

Speaker 6

Okay. Thank you. And then one follow-up. It sounds like 1 has been successfully manufactured for the Phase 3. What CMC related work still needs Be performed and what are the key bottlenecks before filing an amended IND in the 3rd quarter?

Speaker 2

So Tom, the traditional PMC characterization related to manufacturing. As I mentioned, I think, on the last quarter, we transferred our manufacturing process from our clinical manufacturer to our potential commercial manufacturer. And so we have to go through that tech transfer as well as scale up. And you are correct, the Phase 3 clinical product has been successfully manufactured This manufacturer and now successfully released. One of the key things we have to do is to change the CMC package to reflect the new manufacturing process.

Speaker 2

So as you go from a small scale to a large scale, one of the reasons why it's very important to do that Transfer effectively is that some of the processes might change slightly, right? Or they may be slightly different mixes and machinery that are used to make the product, Right. So those have to be properly detailed and those changes reflected in the CMC package. The other critical thing is as move to the new manufacturer, the analytical methods that are utilized to release the product have to be validated, Right. So those are some of the things that we are currently doing now on track to be able to get this thing done.

Speaker 2

And as I mentioned, I think last quarter, we're looking to file the IND in the Q3 of this year. So those CMC activities really related to properly characterizing the manufacturing process, properly characterizing the release processes, right, and how the material is released, the stability program, for example, have to have a certain number of months of stability before we actually file the IND. So all those are the CMC activities currently ongoing And we are still on track for that IND filing in Q3.

Speaker 6

I appreciate the additional color. Thank you for taking the questions.

Speaker 2

No problem. Thanks a lot.

Operator

Thank you. Our next question is coming from Robert Laboyre from Thank

Speaker 7

you. Can you give us any Any guidance as to when these interim analysis in the VERSATILE trial will be expected in terms of timing on the calendar or whether it's going to be triggered by a number of events, whether it's progression or any of the Criteria in the trial or enrollment or anything else to get an idea of when to expect them?

Speaker 2

Yes, I think we'll make that public in due course. Currently, we are waiting feedback from the FDA. We want to make sure that the FDA has blessed the trial before we start making some of those timelines going into detail regarding some of those timelines. First things first, let's Yes, let's get alignment with the FDA as we anticipate we will have later this quarter. But we are designing the trial based upon the enrollment rates that we have observed in Versedial 2, right.

Speaker 2

We've observed some really good recruitment rates. We have many sites extremely interested in the Phase 3 trial based upon the results that you're seeing Currently with the programs and the results we've already made public. And so we are hopeful that we will be able to at least meet or The enrollment rates that we've seen with Versedile 2. As I mentioned, we are looking at 90 to 100 sites globally, so hopefully a large number of sites will one of the key reasons here is to really speed up enrollment and facilitate performance of this trial. But we will make those public in due course once we finalize, once the IND has been successfully submitted.

Speaker 7

Okay. That also answers my second question. So thank you for taking the questions and congratulations on all the progress.

Speaker 2

Thank you very

Operator

much. Thank you. Next question today is coming from James Molloy from Alliance Global Partners. Your line

Speaker 8

Hey, good morning guys. Thanks for taking my questions. Have you guys given an update or are we still anticipating the Triple combo, the 301 of Bintra with data here in the Q4 of 'twenty 3. And then could you talk a little bit or characterize how partnership discussions are going to give, talked in the past about partnerships for Versatile. And is this is much of this waiting on the ASCO data or where do things stand or how do you see the partnership environment currently?

Speaker 2

Thanks a lot, James. So the first part of the question related to the triple combination. The triple combination, as you know, we've already mentioned this, The median overall survival for the refractory population. However, with the in the naive population, we mentioned, I think In Q4 of last year, the last readout demonstrated that at 27 months, 75% of the patients were still alive. So at 27 months, we have not yet reached median overall survival.

Speaker 2

So we expect that sometime this year, this quarter or next quarter, hopefully there'll be an update on the survival in that particular patient population, the CPI naive patients. So that those patients are still being tracked and followed. So that could potentially be the update we'll have from the triple combination trial with Bintra. And as you know, for the gut moving into the Phase through our registrational trial, we will be switching away from bintro to a commercial checkpoint inhibitor. And with the partnering discussions are ongoing.

Speaker 2

As you know, we have been extremely opportunistic as we look for potential partners and how we move some of these programs forward. One of the key things that facilitates those discussions as you know is Phase 3 protocol and progression into Phase 3. Very often your prospective and potential partners want to know how the product is going to be commercialized What the potential is that you'll successfully go through that Phase 3 registrational trial. So where we are today is significantly facilitating those discussions and also help them to progress some of those discussions that we may be having with prospective partners. But As you know, business development is one of the key areas of focus here at PDS today.

Speaker 2

And so those discussions, as you may expect, are progressing with Prospective Partners.

Speaker 8

Andre, thank you for taking the questions.

Operator

Thank you. We've reached the end of our question and answer session. I'd like to turn the floor back over for any further or closing comments.

Speaker 2

Thank you very much. So to all, we really appreciate you joining today's Q1 2023 earnings conference call. We are extremely pleased with the progress we have made this quarter. We continue to be excited about our upcoming milestones this year, especially For our lead clinical candidate, PDS-one hundred and one. We look forward to continuing to update you on our progress.

Speaker 2

I wish you all a great week And thank you very much.

Operator

Thank you. That does conclude today's teleconference and webcast. You may

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