PDSB - NASDAQ

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'll open up the call for question-and-answer session. I would now like to turn the conference over to Tom Johnson of LifeSci Advisors. 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 am joined on the call today by the following members of the company's management team, Dr. Frank Bedu-Addo, Chief Executive Officer; Dr. Kirk Shepard, Chief Medical Officer; and Lars Boesgaard, Chief Financial Officer. Dr. Bedu-Addo will begin with an overview of the company's recent interactions with investors, investigators and others regarding the clinical development plans. Mr. Boesgaard will review our financial results for the third quarter and Dr. Shepard 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 10-Q and 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. Bedu-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 1st, we have been actively engaged with investors and clinicians to discuss our funding requirements and strategy for our VERSATILE-003 Phase 3 trial. VERSATILE-003 is evaluating Versamune HPV + 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 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%. 9% of patients had a complete response versus 3% a year earlier. Treatment related adverse events or TRAEs of grade 3 or higher were seen in 9 out of 87 patients, with 1 out of 87 patients having a grade 4 TRAE and no grade 5 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 Versamune HPV induced antitumor 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 HPV 16-positive head and neck cancer.

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 HPV 16-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 U.S. 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 HPV 16 positive, confirming the rapid increase in the population.

Now I will turn it over to Lars for a review of our results for the third quarter. Lars?

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 30th, 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 30th, 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 $3 months ended September 30, 2024, down from $10.5 million for the 3 months ended September 3, 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 totaled approximately $50 million. And with that, I'll turn the call over to the operator for our Q&A session.

Thank you, sir. [Operator Instructions] 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 want to ask you when would you expect 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 and I assume that's the correct question? How do we view the impacting change in the landscape with regards to 689?

That's correct. Thank you.

Yes. So KEYNOTE-689, very interesting early data. They are looking primarily at neoadjuvant and adjuvant treatment of head and neck cancer. But 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 Versamune-003 trial is looking at patients who are recurrent and/or metastatic, but also checkpoint inhibitor and 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. Right? 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 had 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. 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 in these discussions was, as we have mentioned in the past, based upon the literature reports, the population of HPV 16-positive patients appears to be increasing significantly. 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 HPV 16 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 HPV 16-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 site and start enrolling, because the time to read out is primarily dependent upon enrollment rates. What we estimate to date 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, but 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 VERSATILE-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 Mayank Mamtani of B. Riley. Please go ahead.

Hi, good morning. Thanks for taking our question. This is Ali from Mayank. So I had a couple of questions. The first question is, you showed promising data from IMMUNOCERV at ASTRO. I was expecting to see if you are planning any Phase 3 in near future? And also I was curious to know how you position yourself with Merus EGFR bispecific in first-line head and neck cancer, which they showed pretty 75% or in HPV-positive patient and they already started their Phase 3. So I know the sample number was not, it 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 Merus. I think Merus’ data is quite impressive. They are focusing very differently from PDS. We are specifically looking at HPV 16 specific head and neck cancer, which is the largest and most rapidly growing population of these patients. Their approach is very different from PDS’ approach. It's a bispecific antibody targeting the EGFR antibodies. So you know today cetuximab is an 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’ responses, we have 21% of those patients. So everyone 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 be get comfortable in what our 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. 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. 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. Compare and contrast an immunotherapeutic approach versus tumor killing. 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 board. 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. And so again, we have to look at the results in their entirety, right, 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 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 four HPV-positive patients, so that the bulk of their results are in HPV-negative patients at this time. And again, emphasizing the lack of overall survival in these patients because the FDA knows that the past large trials of LEAP-010 [ph] and also KEYNOTE-048, you did have good responses, but it did not translate into an improvement in overall survival. And that's why they 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 IMMUNOCERV, so as you mentioned, we were extremely encouraged with the results from the IMMUNOCERV trial. So IMMUNOCERV, as you recall, compared our versus immune HPV+chemoradiotherapy in locally advanced cervical cancer. The standard of care today allows for a good evaluation in terms of comparing with where the standard of care is today. The standard of 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 Versamune, HPV in the patients who got all five doses of Versamune 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 Versamune HPV the 36-month overall survival rate was 84.2% again very encouraging. When you look at Keytruda plus the same chemo radiotherapy 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 Versamune 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 assemble gone to again key opinion leaders because we always want to make sure we are 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 LeBoyer of Noble Capital Markets. Please go ahead.

Good morning. The previous design of the VERSATILE-003 trial had an arm with the combination of first immune HPV, pembrolizumab and PDS01ADC 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 PDS01ADC, 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 PDS01ADC in parallel and then determine what the best timing would be to add that to the double. Robert, does that answer your question?

Yes. 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. Bedu-Addo for closing remarks.

Thank you very much, operator. So 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 Versamune 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.