AIM ImmunoTech Inc. (AMEX:AIM) Q1 2023 Earnings Call Transcript May 16, 2023

Operator: Hello, and welcome to the AIM ImmunoTech Quarterly Update Conference Call and Webcast. As a brief reminder, all participants are currently in a listen-only mode. Note that this webcast is being recorded at the company’s request and a replay will be made available on the company’s website following the end of the event. At this time, I’d like to remind our listeners that remarks made during this webcast may state management’s intentions, beliefs, expectations or future projections. These are forward-looking statements and involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the Safe Harbor provisions of the federal securities laws that are based on AIM’s current expectations and actual results could differ materially.

As a result, you should not place undue reliance on any forward-looking statements. Some of the factors that could cause actual results to differ materially from these contemplated by such forward-looking statements are discussed in the periodic reports AIM filed with the Securities and Exchange Commission. These documents are available on the Investors section of the company’s website and on the Securities and Exchange Commission’s website. We encourage you to review these documents carefully. Additionally, certain information contained in this webcast relates to or is based on studies, publication, surveys and other data obtained from third-party sources and the company’s own estimates and researches. While the company believes these third-party resources to be reliable as of the date of this presentation, is not independently verified and makes no representation as to the accurate adequacy, fairness accuracy or completeness of or that any independent source has verified any information obtained from the third-party sources.

Joining us on today’s call from AIM’s leadership team are Thomas Equels, Chief Executive Officer; and Dr. Christopher McAleer, Scientific Officer. I’d now like to turn the call over to Mr. Equels. Please proceed.

Thomas Equels: Thank you, Operator. As it’s been mentioned, I’m Tom Equels, the CEO of AIM ImmunoTech. And at AIM ImmunoTech our motto for the company is Immunology for a Better Future. We’re working not just for the financial rewards that come from the type of research and development we do, but primarily to bring not just hope, but a cure to people with lethal malignancies, and diseases such as long COVID through our experimental drug Ampligen. We’re on target in these serious disease areas where there’s a complete unmet medical need. And in doing that, again, we’re trying to create a better future for those, many of whom have no hope right now. With regard to our quarterly call today, those of you who attended our last call, which was just a month and a half ago, recognize that we’ve had significant improvement over the past 18 months in terms of progress in our clinical trials, especially in our key priority areas of pancreatic cancer, advanced recurrent ovarian cancer and long COVID.

Now, I want to talk a little bit about our late stage pancreatic cancer program, because we had a tremendous amount of data coming through our Early Access part of that program, which establishes a very clear measure and de-risks our future clinical work because in those subjects, we’re approaching 50 subjects at this point. We’re seeing clear evidence of progression free survival, and overall survival. That is a cancer that is malignancy, which is projected for 2023 to be one of the top causes of cancer-related deaths in the world. So it’s a big market. Advanced recurrent ovarian cancer, our data that we’ve gathered over the past several months, going back to April of last year, has a very strong indicator of Ampligen’s potential as a therapeutic in a number of different solid tumors.

In addition to the progress that we made in the clinic, we’ve had a number of different regulatory approvals of INDs authorizing us to go forward with placebo-controlled clinical trials, for example, in long COVID, expressing chronic fatigue like symptoms, and for a randomized controlled Phase 2 in pancreatic cancer. So we’re making strong regulatory progress that parallels these advances in the clinics, and we’ve also made some structural changes. We have made a world renowned biotechnology pioneer W. Neal Burnette, as the Chairman of our Scientific Advisory Board, and Nancy, Bryan has joined our Board of Directors. She has a deep and strong pharmaceutical industry background, including a lot of activity that we think will be very valuable in mergers, acquisitions and licensing.

So we’ve improved the depth and quality of our management team significantly. Now, as to our pipeline, if you go to our website, you can get the details for this, but we have prioritized in repurposing Ampligen several years ago into oncology. We have prioritized two areas of clinical development that are extremely important to the future of our company. First is pancreatic cancer. We have an Early Access Program with almost 50 subjects having been treated. This was a use authorization by the Dutch government, which has been underway since late 2016. And in that program, we have demonstrated progression free survival and overall survival based on comparison with well-matched historical controls, both in locally advanced pancreatic cancer as well as metastatic pancreatic cancer.

And then advanced recurrent ovarian cancer, as you know, late stage pancreatic cancer is almost like a death sentence. While advanced recurrent ovarian cancer is very much the same. And in advanced recurrent ovarian cancer, we’re involved in a Phase 2 at the University of Pittsburgh, combining our drug Ampligen with Merck’s drug pembrolizumab, also known as KEYTRUDA. And in that study, we’re seeing remarkable results from the preliminary data that was posted and we’re expecting a protocol driven interim report in just a few months. And it’s our hope that preliminary data will be sustained in this data report set by the protocol, because the preliminary data which was published at the AACR convention is an abstract to late breaking abstract shows that Ampligen combined with pembrolizumab in cisplatin sensitive patients, is creating significant survival advantages, including complete responses and significant partial responses in a disease where that is rarely seen at all.

So we’re very excited about that. And our long COVID program, we’ve gotten FDA authorization to commence that. We have numerous sites that are in the final stages of getting up and running. And we hope to see the — not only those sites open, but very rapid enrollment and dosing of subjects with the site selection that we have. We have a reasonable expectation that we’ll have all of these subjects treated by the end of this year or certainly in the first quarter of next year. So I’m very excited about where we’re at today. And I’d like to take a moment now to introduce our Scientific Officer. One of the things that we’ve done recently too is, as we promoted Dr. McAleer to Scientific Officer for the company, and he’s going to do a deep dive into some of these programs.

Take it on, Chris.

Christopher McAleer: Thank you, Tom. I’m happy to be here. As Tom just pointed out, the pancreas cancer is our primary focus and that is in large part due to the positive data that was collected as part of that Early Access Program in the Netherlands. As you recall, the EAP was Ampligen as a singular amount of therapy following FOLFIRINOX in patients with both locally advanced pancreatic cancer and metastatic pancreatic ductal adenocarcinoma. And that original data published in the Journal Cancers highlights the improvements in the progression free survival and overall survival over historical controls, and this graph is a reminder of that positive data. And these promising results have led to the design of both our AMP-270 locally advanced study, as well as the study in metastatic cancer that I’ll be discussing shortly.

As you will — as we’ll be opening the Erasmus Medical Center as part of both AMP-270 and the DURIPANC study, we expect any new patients to be enrolled in each of those two studies. And we will leave this Early Access Program opened as an option for patients that don’t qualify for either ongoing study. And while these data has led to the design of these two new studies, the EAP has continued to enroll additional subjects beyond that published in cancers. And we expect to have an updated analysis including updated Kaplan Meier Plots and for progression free and overall survival during our Q2 call, and I’ll be really excited to share that data, it’s quite promising. In addition, the subsequent analysis of patient blood samples has revealed differences in gene expression profiles between patients who had stable disease after 6 weeks of treatment and those who had progressed.

And as an example of that those with stable disease express markers of immune upregulation such as IRF4 LTB and CD83. But more important to that it’s given us insight into differential gene regulation in those who have progressed, such as ARG1 upregulation, which may mediate T cell suppression and ATG12 upregulation, which is implicated in autophagy. And armed with that information, we can continue to advance our understanding of Ampligen’s mechanism of action, as well as find additional potential targets for combinatorial therapies to ultimately improve patient outcome. In addition to the data that’s most striking to me is that patients taking Ampligen have shown an increase in Ki67 positive populations of both cytotoxic T lymphocytes and T helper cells, as well as an increase in the population of CD69 positive cytotoxic T lymphocytes and T helper cells, indicating that the Ki67 positive indicating that these T helper and T lymphocytes can continue to proliferate, but the CD69 expression showing that they have the ability to be activated.

And so, while we need to explore these findings further, it points to the potential of Ampligen to sustain the pool of T cells and mitigate T cell exhaustion that has been known to occur with checkpoint inhibitors, and that data has been extremely excited. And a press release and a link to that data presentation will be forthcoming as these data were recently presented by our colleagues at Erasmus Medical Center at the 2023 Pancreas Club Meeting, in Chicago. And these data have me excited because they give me evermore confidence that AMP-270 — that the AMP-270 in locally advanced pancreas cancer and the DURIPANC study in metastatic PDAC will be successful. And so I want to take a moment to address the AMP-270 study in a little further detail.

We currently have the Gabrail Cancer Center in Canton, Ohio open and they are actively screening patients. Enrollment at that site has been slower than we expected. But we are working diligently to open additional sites, as well as looking at different methodologies to increase advertisement for the Gabrail Center site that hopefully increase their enrollment. A site initiation visit will be occurring at the University of Nebraska Medical Center next week. And we expect that site to be open and enrolling patients before the end of May. Shortly after that, we will have an additional site initiation visit at Virginia Mason Medical Center in Seattle. And beyond that we are in open contract negotiations in some degree or another with approximately 20 different sites, and planned to have additional sites in the U.S and Europe opening by year-end and that does include the Erasmus Medical Center in Netherlands.

Well, that being said, I do still expect the first patient to be enrolled in Q2. But because control patients in this particular study do not receive dosing, it is possible that the first patient — the actual first patient dosing will not be until Q3. But I am cautiously optimistic with the additional sites opening and in the very near future that we may still reach that timeline. And the — I’ll talk about the investigator sponsored DURIPANC study which will combine AstraZeneca’s durvalumab with Ampligen following FOLFIRINOX. This is a Phase 1/2 study to investigate the safety and efficacy of that treatment. As you guys have probably been aware Ampligen has shown a high combinatorial benefit with checkpoint inhibitors, specifically with the PD-1 inhibitor KEYTRUDA in both triple negative breast cancer as well as advanced recurrent ovarian cancer.

We believe the combination of the immune modulating properties of Ampligen and the ability of Ampligen to maintain the pools of T cells that I discussed previously, we combined that with a known high PD-L1 expression in pancreas cancer that durvalumab should combat, those together makes for a very intriguing synergistic combination that we believe is likely to show very great promise in extending both progression free survival and overall survival in those patients with metastatic cancer, pancreas cancer that we all aware are desperate for a cure. There are some minor comments to the Ethics Committee that need to be addressed. But otherwise, the major hurdles for the initiation of this study have been ironed out and we have speculated previously that the study will commence in Q4 of 2023.

But again, I am cautiously optimistic about our chances of actually beating that projected timeline. And to the end of further investigating the mechanism of Ampligen’s efficacy in treating cancer, such as further advancing the research from the EAP I discussed earlier, and as well as providing a molecular biology lab space to initiate investigations and other indications including other cancer indications, I have been able to secure a small lab facility at the Sid Martin Biotechnology hub that is associated with the University of Florida, their UF Innovate Program. This space will allow us to update and improve protocols and methodologies pertaining to the CMC that chemistry manufacturing control sections of what we expect to be our future NDA in pancreas cancer.

This lab will supplement the chemistry lab that we have in New Jersey and it will provide us with the necessary lab space to solicit and acquire NIH funding, which I am actively pursuing to help offset costs at a relatively low burden to the stockholders. I personally think that the — approximately 20,000 per year that we’re spending for this facility is a bargain price to give us access to almost everything we need including, lab space, analytical equipment, microscopes, incubators, and the infrastructure of a world class research facility, including biohazard waste removal and Iacocca access just to name a few. And I think this acquisition will help to advance the fundamental biology and chemistry behind Ampligen and to help ensure that we are prepared for regulatory scrutiny when that day comes.

And while oncology is our primary focus, I would be remiss to not briefly mention the advancements we have made in the post-COVID condition of fatigue. The AMP-518 study is intended to enroll 80 patients, 40 control and 40 Ampligen treated in a randomized double-blind placebo-controlled fashion. The primary outcome of that is the PROMIS Fatigue Score with other secondary outcomes, including some exploratory biomarkers, such as immune cell monitoring and advanced exploratory biomarker panel analysis that we hope will shed light on disease ideology, as well as provide some insight into responder population characteristics. We are hopeful that this responder population will be high and that hope is based off the preliminary data that we have collected as part of the AMP-511 study amendments that we made to treat patients with post-COVID conditions.

As you may recall, the small population of patients that we had showed improvements in their general fatigue, their ability to exercise, as well as decreases in the post exertional malaise that is associated with that exercise. And in addition, these patients demonstrated improvements in their focus, their concentration and their memory. And we have currently agreed upon budgets and clinical trial agreements with 10 sites and expect to have all those contracts through the legal process and signed within the next 2 to 3 weeks. Our expectation is to ship drug in the first 2 weeks of June, and have all 10 sites open and treating patients in mid to late June. Our hope and expectations from the site feasibility questionnaires is that enrollment will take no longer than 3 to 4 months, and the last patient will be enrolled in Q4.

And that’s a broad overview of the scientific and clinical advancements we’ve made thus far. And I’ll hand it back to Tom to discuss the company finances.

Thomas Equels: Thank you, Chris. Well done. As to our financial position, I think you can see that we’re in a very robust position, given the accomplishments that we have demonstrated over the past 2 years. One of the reasons for that is that much of the clinical work that we’ve done, for example, at Erasmus, the Early Access Program, much of that was funded through a variety of governmental mechanisms in the Netherlands. But we were actually paid approximately a little over $600,000 for the Ampligen that we contributed to the study, and the cost of that study, were funded through these other sources. Similarly, at Roswell, much of the tremendous current clinical achievements that we made at Roswell, were funded through various governmental grants, NIH, DoD, that type of thing.

At the University of Pittsburgh Medical Center, the tremendous advances that we made in advanced recurrent ovarian cancer, the Phase 2 with the — cisplatin sensitive Ampligen, plus pembrolizumab or KEYTRUDA, that is principally funded by a Merck Grant. And that’s a very significant Phase 2 study with projected 45 subjects. So we’re not talking about small potatoes there. So our financial situation is strong. And we have every belief that we have sufficient cash to move through the end of 2024 and accomplish our clinical and regulatory goals that we’ve set for that period. Now, if you look at where we’re at, and you see how we’ve used our dollars wisely. We are moving our clinical programs at an extremely rapid pace, especially when you consider the size of our company.

And we have the cash, but we also have the partners and collaborators that we need to make this happen. If you can see on this slide where we’re working with AstraZeneca and combining Ampligen with its drug durvalumab are in busy for advanced pancreatic cancer, metastatic pancreatic cancer. We’re working with Merck in two areas at the University of Pittsburgh, and advanced recurrent ovarian cancer Ampligen plus KEYTRUDA at Roswell Comprehensive Cancer Center, Ampligen plus Keytruda in Stage 4 triple negative breast cancer and we’re seeing fabulous results as the data comes in in those programs. So we have top notch collaborators that we’re working with, top research centers and world class researchers. Dr. Edwards is at the top of this field in ovarian cancer.

Dr. Kalinsky is one of the top immuno oncologists in the world. Dr. Van Eijck at Erasmus, probably the preeminent — world’s preeminent pancreatic cancer specialist. So, we have a good team internally, and we’re collaborating with the best of the best. Now, you may ask yourself, why Ampligen? Why AIM? Why now? Well, the reason is that we have an opportunity that presents itself right now. The biotech microcap sector has taken a beating across the board. And this allows an opportunity to take advantage of where AIM is right now. Because I do not believe if you look, you’re going to see another company position like we are with the cash, with the personnel, with the collaborators with the partners to achieve long-term clinical successes in diseases where there are extremely serious unmet medical needs in large market segments.

So that’s why AIM. And that’s why now. Our focus is on creating successes that have the opportunity to lead to big opportunities and deal opportunities down the road. And one of the reasons we repurposed into oncology was because there was a tremendous unmet medical need that we thought we might be able to address, but also for purposes of our investors and our stockholders. You look at the volume of deals in biopharma, and the largest area of volume is oncology deals, and the richest deals are oncology deals. So we have put our focus on target. We’re aiming for a target that creates long-term value. Thank you very much. Now, if anybody has any questions, we’ll open the floor for questions.

Q&A Session

Operator: Thank you. Our first question comes from the line of Jim Molloy with Alliance Global Partners. Please proceed with your questions.

James Molloy: Hey, good morning. Thank you for taking my question. I had a question on the top three on Slide 6 on the deck you have sent out with the presentation this morning. On the top three oncology opportunities, so ignore the fourth because it’s an Early Access, the three defined clinical trials you walk through which one of those — which are — which of the three are just having the nearest term catalyst top or interim catalyst? And which of those are investigator-sponsored versus AIM is controlling entirely those trials?

Christopher McAleer: So the DURIPANC AMP — I’m sorry, the DURIPANC study is an investigator-sponsored, so is the advanced recurrent ovarian cancer. The AMP-270 locally advanced pancreas cancer is AIM controlled. In terms of best interim data that’ll be in the advanced recurrent ovarian cancer, that’s an optimal stage design. That is run the number of patients enrolled for that Stage 1, Stage 2 design has been completed. The formal interim report is being drafted now for us. It’s expected to come sometime in June. It couldn’t get an exact date, but it should be in June. So in terms of immediate line, it would be the recurrent ovarian cancer followed by the DURIPANC. That’s the Phase 1, Phase 2 running. And we expect that it’s a three and three design in the Phase 1, we expect that as safety data to come in with some preliminary efficacy data, probably in mid Q2 of 2024. I hope that answers your question.

James Molloy: DURIPANC — Thank you. And the DURIPANC, that’s the Ampligen, durvalumab …?

Christopher McAleer: DURIPANC it’s the metastatic pancreatic ductal study.

James Molloy: All right.

Christopher McAleer: Ampligen and durvalumab.

James Molloy: PDAC study. Okay, great. Then when …

Thomas Equels: If I might add James — James, if I might, our enthusiasm about the study that we’re beginning with AstraZeneca utilizing Ampligen and durvalumab is based upon our experience in both Stage for triple negative breast and advanced recurrent ovarian cancer, seeing a tremendous synergy when Ampligen was combined with KEYTRUDA. Realize KEYTRUDA’s PD-1 checkpoint blockade therapy that we think in terms of mechanism of action, we should see the same results when combined with the durvalumab which is PD-L1.

James Molloy: Thank you. Dr. McAleer, then you’re saying on the metastatic PDAC with durvalumab, that’s a launch in fourth quarter ’23? When do you anticipate an interim look there, or when you data?

Christopher McAleer: So the — well, it’ll be open-labeled. So we’ll have that data as it progresses. But the stage, so it’s a Phase 1, Phase 2 . The — I expect based on the enrollment that we’ve had at Erasmus for that to likely be at the end of Q2 of 2024, the transition from the Phase 1, Phase 2. That may bleed into Q3. I don’t want to — I probably should just say Q3 to be safe, but those are my expectations.

James Molloy: Understood. Thank you very much. And then a quick follow-up on the locally advanced pancreatic adenocarcinoma with FOLFIRINOX. The first patient enrollment expected in second quarter ’23. This trial, I believe was opened in third quarter ’22. Is that — was there a sort of a — it seems a long time between opening and in first patient things will start rolling along now, or what — was their special circumstances, we kind of delayed the first patient coming in.

Christopher McAleer: So we had IRB approval in Q3 of — I’m sorry, yes, we had IRB approval in Q3 of 2022. The first site Gabrail Cancer Center opened in Q4 of 2022. We were optimistic based on their site feasibility questionnaires that they will be able to enroll approximately one patient every month. That has not come to fruition. The holidays were obviously an issue, nobody wants to start treatment over that timeframe. We also — the legalities of clinical trial agreements was taking longer than we have with these larger institutions. We also had one or two drop out just based on our inability to pay the per patient costs. We’re talking three or four times the average that we have for negotiated budgets across the three or four sites of which we finalized budgets with.

But we, as I stated earlier, we do have University of Nebraska to be opened in the next 2 or 3 weeks and Virginia Mason Medical Center to follow that by another week or two. And we are finalizing budgets and clinical trial agreements with at least three or four other sites now which I expect those to happen in June or July. So hopefully based on those site feasibility questionnaires, if they’re accurate, that we will have the enrollment speed up drastically here in the second half of the year.

Thomas Equels: And also with regard to that, with regard to that point, James, at Erasmus, they typically as we’ve seen from the Early Access Program, have a backlog of subjects, because Dr. Van Eijck and his team are world renowned in this area and sort of a focal point for treatment in Europe. And to that end, I do expect the Erasmus Medical Center to open as part of the AMP-270 sometime in the summer. We have QP release and drug supply that needs to go over, but all that should be done and sometime in this summer, Erasmus will open up and they are typically high enroller.

James Molloy: What — I know the Erasmus study has been going for a while, what’s taking them so longer to get on board to start enrolling?

Thomas Equels: The regulatory process, even though we have an FDA authorized trial, they have to go through the European regulatory process for purposes of conducting that trial in the Netherlands. And that is taking a bit longer than the FDA process, and also there’s certain arrangements that we have to make for drug delivery and that type of thing. But everybody is moving as fast as possible to get Erasmus as a part of AMP-270. And then the Early Access Program has been continuing, so that we haven’t stopped treating people at Erasmus. But once the studies are open, then those patients who previously would flow into the Early Access Program will now be directed into the clinical trials.

James Molloy: Great. Thank you very much. Thanks for taking the questions.

Thomas Equels: Thank you. You’re welcome.

Operator: Thank you. Our next question comes from the line of Ed Woo with Ascendiant Capital. Please proceed with your questions.

Ed Woo: Yes. Thank you. Congratulations on the progress. My question is on your inventory of Ampligen. What does your inventory look like? And how hard or easy would it be to get additional supplies for your tasks for your clinical trials?

Thomas Equels: Well, right now, we always budget our clinical activity against existing inventory. And so we don’t overextend ourselves. But we are in the process of creating new lots of Ampligen, which I’ll let Dr. McAleer address the details of that process. But it involves both contract manufacturers for new polymer as well as additional fill and finish lots. Chris?

Christopher McAleer: Yes. So thank you. I think I answered this question a bit ago. So the — we currently have enough Ampligen. All these things are predicated on that Ampligen continues to meet its stability testing, which we do every 6 months. With that being said, projections still look promising for all the Ampligen to continue for quite some time. But the — right now we have enough Ampligen to do both the DURIPANC study, the AMP-270 based on projections of the amount of time that they’re going to be taking Ampligen since it’s not a fixed time, it’ll be until progression. Based on the preliminary data we have from the EAP about how long patients will be on Ampligen plus a 25% buffer. Then addition to the long COVID trial that we have, beyond that we have approximately 8,000 or 9,000 vials, which would be enough to do another Phase 2 or a small Phase 2.

I have enough polymer intermediate active ingredients to make the final Ampligen, which we will do sometime around December to do a final fill and finish of another approximately 9,000 or 10,000 vials. I have contracted out manufacturers to help us both make Ampligen, but improve the process. Currently our yields are not as high from the initial product, I think we can improve that. So for every lab we have to improve the amount of polymer eventually improve the amount of Ampligen that we get at the end of that, and that should the next lot of polymer should be made some time in the middle of 2024. So we have enough Ampligen to continue the trials. We have, if we want to carry on with something beyond that, this particular point that the long COVID becomes promising.

As the data comes as promising as we believe it will be, the next study we should be primed to do that. And then we have backfill of Ampligen and beyond that in the pipeline.

Ed Woo: Thanks for answering my questions. And I wish you guys good luck.

Thomas Equels: Thank you very much. We appreciate your interest.

Operator: Thank you. I will now hand the call back to Mr. Equels for any closing remarks.

Thomas Equels: Well, I think in closing, I want to reaffirm that we have been striving to move forward as rapidly as possible with our lead product Ampligen. We’re making strong and steady progress in the area of pancreatic cancer in all aspects. We’re also on track for the opening of an important pancreatic cancer program, which is the one we’re doing in conjunction with AstraZeneca . And that could lead to some breakthrough results if we’re successful there. And we have every expectation that the program interim report in advanced recurrent ovarian cancer will confirm the preliminary data, which was spectacular published as breaking abstract at the American Association of Cancer Research Convention in New Orleans. So we’re moving forward. We have the cash and the team to execute, and we are very blessed to have the data coming in that supports our program.

Operator: Thank you. This does conclude today’s teleconference. We appreciate your participation. You may disconnect your lines at this time. Enjoy the rest of your day.