AIM ImmunoTech Inc. (AMEX:AIM) Q3 2024 Earnings Call Transcript

AIM ImmunoTech Inc. (AMEX:AIM) Q3 2024 Earnings Call Transcript November 15, 2024

Operator: Hello, and welcome to the AIM ImmunoTech Third Quarter 2024 Update Conference Call and Webcast. As a brief reminder, all participants are currently in a listen-only mode. [Operator Instructions] Following the presentation, there will be a question-and-answer session. 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 that involve risks and uncertainties. Forward-looking statements on this call are made pursuant to the safe harbor provisions of the federal securities laws and are based on AIM ImmunoTech’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 ImmunoTech files with the Securities and Exchange Commission. These documents are available in 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, publications, surveys, and other data obtained from third-party sources and the company’s own estimates and research. While the company believes these third-party sources to be reliable as of the date of this presentation, it has not independently verified and makes no representation as to the adequacy, fairness, accuracy, or completeness of, or that any independent source has verified any information obtained from third-party sources.

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

Thomas Equels: Thank you very much, operator, And I’d like to thank everyone for joining us this morning. Throughout the third quarter, we have made solid progress with the advancement of our lead product, Ampligen. By this, I mean our team continued to execute on our clinical and regulatory strategies with our Ampligen development programs across several indications. And I want to remind you that these are areas with critical unmet needs, especially in the high-value pancreatic cancer space. Importantly, we continue to deliver positive clinical trial data across our pipeline, and we believe this progress is driving significant momentum. I’ll briefly highlight our progress and then turn the discussion over to our Science Officer, Dr. McAleer, to dive deeper into our programs and our progress.

We recently announced positive preliminary data from the Phase 1b/2 study, which we call DURIPANC, evaluating the combination of Ampligen, also known as rintatolimod, and AstraZeneca’s anti-PD-L1 immune checkpoint inhibitor, Imfinzi, also known as durvalumab, in the treatment of late-stage metastatic pancreatic cancer. During the third quarter, we also announced the great news that the complete clinical patient data from our AMP-518 clinical trial supports our belief in Ampligen as a potential therapeutic for a subset of people with moderate to severe post-COVID conditions of fatigue. These data for that group are statistically significant and allow us to target the subject population for AIM’s planned follow-up clinical trial. We are amassing a growing body of data and continue to report as well as publish our data at scientific congresses and prestigious journals and publications supporting Ampligen as both a monotherapy and combination therapy with other approved drugs.

During the quarter, we announced official print publication of the data analysis from Erasmus from a long-term early access program studying Ampligen for the treatment of advanced pancreatic ductal adenocarcinoma, also known as PDAC. The manuscript appeared in the journal Clinical Cancer Research, which is one of oncology’s most prestigious journals. These data continue to provide us with further insights into Ampligen’s ability to improve progression-free survival and overall survival and enable us to identify cancer patients who might benefit more from Ampligen treatment than they would from other known cancer treatments. Building our IP portfolio for Ampligen also remains an important priority for the company, and we continue to identify ways to expand our patent estate.

We recently announced that the United States Patent and Trademark Office granted to me and our Medical Officer, Dr. David Strayer, a composition of matter and methods of treatment patent which we have assigned to AIM, comprising Ampligen in the treatment of endometriosis. As you may know, endometriosis is a painful chronic condition that affects nearly 10% of women of reproductive age, or approximately 6.5 million women in the United States. With the global endometriosis market already at an estimated $2.4 billion in 2023, it is expected to reach $3.7 billion by 2032. We believe this addition to AIM’s Ampligen patent portfolio makes the company an even more attractive partnership or buyout target. As to our finances, we are currently disputing and negotiating $4.9 million in accounts payable.

We hope for a positive resolution. Further, in a related issue, one of AIM’s D&O insurance companies has so far failed to pay a $2.5 million secondary layer of coverage. We are working to obtain prompt payment. These are major factors regarding the going concern and stockholder equity issues, which we are working hard to resolve in a positive fashion. I am very pleased with our continued progress and believe we are driving significant momentum with our positive clinical trial data, And this is fundamental to our overarching strategy of driving Ampligen towards approval and underscoring potential, big pharma collaboration and commercialization opportunities. With that, I’d like to turn it over to our Science Officer, Dr. Christopher McAleer, to discuss in more detail our progress and plans for Ampligen across our pipeline.

Chris?

Christopher McAleer: Thank you, Tom. We have a bit to cover today, and I will start with our programs in pancreatic cancer. DURIPANC is a Phase 1/2 trial to determine the safety and efficacy of combining Ampligen with AstraZeneca’s durvalumab in the treatment of metastatic pancreas cancer. We recently announced that the 200-milligram dose was deemed safe, and we were able to proceed to 400-milligram dosing of Ampligen. The study encountered some last-minute screen failures, and there will need to be at least one additional patient enrolled to gather the necessary dose-limiting toxicity data to complete the Phase 1b. The study is on track for the final patient to be enrolled by the end of the calendar year. Thus far, there have been no serious adverse events at either the 200-milligram or 400-milligram doses, and we expect a smooth transition to Phase 2.

As we reported earlier, two of the three patients in the low dose cohort had stable disease at the six-month time point, and the higher dose cohorts have yet to reach the six-month assessment. However, of the six valuable patients that have reached the three-month evaluation time point, and this does include both 200-milligram and 400-milligram dosing, five of the six patients, that’s 83%, have stable disease at the three-month time point. Erasmus has a large cohort of historical data, and comparably only 20% of historical patients have stable disease at that time point. The first patients in the 400-milligram cohort are approaching the six-month assessment over the next few weeks, and two of the three patients still have stable disease. When evaluating progression-free survival from the start of FOLFIRINOX utilizing the standard Kaplan-Meier time-to-event analysis, and I caveat this by saying these data are preliminary and only from these few DURIPANC patients, the DURIPANC combination has a current progression-free survival of 15 months, compared to 12 months of Ampligen alone, which is data from our EAP, and compare that to eight months with historical controls.

These are improvements in progression-free survival of four months with Ampligen alone and seven months with the combination of Ampligen and AstraZeneca’s durvalumab. To put that in the context, when FOLFIRINOX replaced gemcitabine, paclitaxel as the standard of care in metastatic pancreas cancer, the improvement in progression-free survival was approximately three months. We are encouraged by these data and we anxiously await the last patient enrollment and the dose limiting toxicity evaluation for the formal launch of the Phase 2, which we anticipate occurring in Q1 2025. Concerning the AMP-270 trial involving Ampligen as a maintenance therapy for locally advanced pancreatic cancer, we have edited the protocol according to our discussion with the FDA and we submitted the protocol to the FDA for comments in October.

While not mandatory, we were awaiting the customary 30 days to allow for FDA comments. At this time, clinicaltrials.gov has been updated. The protocol has received IRB approval, and we are disseminating the new protocol to sites to begin the enrollment process. As I stated before, this protocol expands the inclusion criteria and treatment arms to allow for those patients receiving chemo radiotherapy, and we believe the addition of these treatment arms will accelerate patient and site recruitment. I am hesitant to forecast a first patient enrollment under this new protocol as I anticipate that there will be further negotiations with current sites concerning budgets related to the new protocol design. In addition, we have compiled a targeted list of institutions to reengage with for site recruitment and we expect all of this to be in full motion within the next few weeks.

Regarding Ampligen for the treatment of ovarian cancer, as we discussed in the last earnings call, the trial combining Ampligen, cisplatin, and pembrolizumab for the treatment of advanced recurrent ovarian cancer is being wrapped up early. Dr. Edwards was so impressed with the response rate and the level of tumor infiltrating lymphocytes that he has convinced Merck to allow the trial to be downsized from 45 patients to 30. They are wrapping up enrollment and hope to submit a manuscript highlighting the data collected thus far for peer review by the end of the calendar year. And the Phase 2 study of advanced recurrent ovarian cancer combining the Ampligen containing CKM with cisplatin and a dendritic cell vaccine is open for recruitment and awaiting first patient enrollment.

Concerning our Phase 2 trial for the post-COVID condition of fatigue, the final complete study report has been approved, and the data for this trial will be posted to clinicaltrials.gov by the end of November. The exploratory biomarker data has been received, and there are very interesting findings between healthy and diseased patients, and we are engaged in conversation with other scientists and advocacy groups to determine how these data fit into the greater understanding of the disease and how best to utilize the information. In addition, it is clear that Ampligen modulates certain biomarkers pertaining to complement-mediated pathways and immune cell maturation, among others, and we are still working through the predictive nature of the biomarkers to identify responders.

This is a time-consuming process as we investigated over 2,000 different proteins. We’ve utilized machine learning algorithms like principal component analysis with least squares differentials to parse the data. It is clear that there are distinct populations of patients, and we are still determining how best to use these data to target the optimal population for enrollment. In addition, I was invited to attend the RECOVER-TLC, that’s treating Long COVID kickoff meeting at the NIH campus in Bethesda. It was a wonderful opportunity to discuss the successes and failures of the original RECOVER program and to lay groundwork for the design of the next treatment strategies, as well as a wonderful opportunity to network with public and private partners that are interested in funding and treatments for Long COVID.

As many may be aware, the RECOVER-TLC program has launched a portal for submission of potential therapeutics to be tested as part of this initiative. We have submitted Ampligen as a candidate to be included in their clinical trials, and if chosen, the NIH would assume the costs and would, with consultation with AIM and other partners, drive the clinical and regulatory pathway of Ampligen for the treatment of Long COVID. We are hopeful that Ampligen will ultimately be chosen to be included in this program. Now, I’d like to switch focus for a minute. While these calls and presentations tend to focus on the clinical trials wherein AIM is testing Ampligen in treatment of diseases and disorders, we are also always working behind the scenes to identify and exploit any inefficiencies possible to make Ampligen a better, more desirable product for potential partnerships and buyouts.

I’ve felt since I joined AIM that the polymer manufacturing process could be improved and potentially shortened, which would ultimately save money. To that end, we have spent the past year working with Sterling Pharma Solutions, which is our manufacturing partner in the United Kingdom, to optimize and streamline the production of the individual Poly I and Poly C12U polymers that are the building blocks of Ampligen. Through an upfront investment of a little over $200,000 in R&D experiments and the combined creativity of the AIM and Sterling science teams, we have been able to remove certain processing steps that utilize hazardous chemicals, while also shortening the polymer production time by approximately 40%. And all of this is with a minor loss of yield, but importantly still meeting the established release and quality specifications.

This optimization should save AIM an estimated $2 million total in the ongoing method transfer and validation process with Sterling, while also reducing future costs by about $200,000 for each batch of Ampligen. And now, I’ll hand it back to Tom to discuss the company financials.

Thomas Equels: Thank you very much, Chris. I’d like to direct everybody to Slide number 9, excuse me, Slide number 8, which addresses our audited financials, and state that we’ve covered a lot of our fundamental progress today. Our priorities, our focus, our enthusiasm, our vision, and our mission have never been clearer. The strength of our growing body of data across multiple indications is both robust and highly encouraging. We are driving significant momentum across multiple clinical programs and studies that are demonstrating Ampligen’s significant potential to address high value and high need indications, especially in the pancreatic cancer space. Over the course of 2024, our team has made important progress in executing our clinical strategy, facilitating potential partnerships, including with big pharma, and leveraging commercialization opportunities to create value.

The entire AIM team is dedicated to helping patients in need and delivering enhanced value for our shareholders. I would like to inform you that AIM ImmunoTech has found a definitive proxy statement and related proxy materials with the SEC in connection with the 2024 annual meeting of shareholders. And in connection therewith, its directors and executive officers, Peter W. Rodino III and Robert Dickey IV, are participants in the solicitation of proxies from our shareholders in connection with such annual meeting. AIM shareholders are strongly encouraged to read such proxy statement and all other related materials filed with the SEC carefully and in their entirety as they contain important information about the 2024 annual meeting. As you may know, a group of activist investors has nominated four individuals to replace our entire Board.

We have issued a detailed public letter on this, but I want to make a few points on this call. For the third year in a row, several individuals of this group are trying to take control of our Board. We have serious reservations about this group’s members, which include individuals with checkered pasts and close ties to security law felons. This, in our view, indicates they would not be good stewards of stockholder resources. The group has also made clear in their proxy materials that they personally will seek substantial monetary reimbursement for over $5 million for their 2023 failed attempt to take over the Board, in addition to whatever expenses they may incur in connection with this year’s annual meeting, each without giving shareholders a direct say.

Needless to say, AIM’s cash is essential to funding our runway for ongoing research and clinical trials. Keeping up the positive momentum we’ve seen across high-value indications, which Chris and I have discussed earlier in this call, is what will allow us to unlock long-term value for all shareholders. Each of our incumbent directors strongly believe that if the activist group gains control of the Board, our progress and momentum would be put in jeopardy, and the company’s cash position could be severely depleted if and when they reimburse themselves. The bottom line, in our view, the activist group is looking out for itself, not for all shareholders, and the election of their nominees who have not even put forth any serious plan for the future of the company, would be detrimental to all stakeholders.

That is all I’m going to say on this subject on the call. So I ask that your questions be limited to our business and financial results from the quarter. So with that, I’d like to turn now to questions-and-answers. Operator?

Q&A Session

Operator: [Operator Instructions] Our first question comes from the line of [Chad Yahn] (ph) with Maxim Group. Please proceed with your question.

Unidentified Analyst: Hi, guys. Thanks for taking the question, and congrats on the progress. I was wondering if you could provide some additional color on the next steps for the Long COVID program and what the potential next studies on there could look like?

Thomas Equels: Well, thank you very much for the question. And we’re utilizing the data that the analysis has just been completed to formulate a profile for inclusion in that next trial. The group that’s been identified as having a significant response with statistical significance is in the moderate to severe category of the disease. And I’d like to allow Dr. McAleer to address a few points related to the specifics of the data and also maybe the input that we see generally from the biomarkers.

Christopher McAleer: Thank you for the question. I think The path forward will partially depend on whether Ampligen is chosen in the RECOVER-TLC program. If it’s [recovered] (ph) for the TLC program, most of that clinical design will be part of their platform study and the readouts and such will be driven in combination with our input by the NIH, also funded by the NIH. If it’s not chosen, we have looked through the data and we found that those who are most severe, the home ambulatory patients, respond best to Ampligen. We’ve also found blood biomarkers that show those that have markers of anemic events and/or immune cell deprivation seem to respond better to Ampligen as well. And so the design of the trial will incorporate those elements, right?

So we’re looking at the most severe, moderate to severe patients that have particular biomarkers, that we’re looking at that likely the outputs will be something related to fatigue or post-exertional malaise and the design will likely be some sort of Phase 2/3 trial.

Thomas Equels: And if I might add, the AMP-518 as a part of our concept was to have a relatively broad net for inclusion so we could identify not just who responded well to Ampligen, but where we did not get a significant response in the patient population. So it did its job. We do see a segment of that population, which Chris just described, where there’s data that establishes an opportunity to help people move from home ambulatory to community ambulatory, which is a big step in terms of therapeutic improvement. And that data was statistically significant.

Unidentified Analyst: That was very helpful. Thanks, gentlemen.

Thomas Equels: You’re welcome.

Operator: Thank you. Our next question comes in line of Ed Woo with Ascendiant Capital Markets. Please proceed with your question.

Ed Woo: Yeah, congratulations on all the progress. I was curious about, you mentioned that you were able to reduce the cost and time to produce a batch of Ampligen. How much does it cost and how much time does it take to produce the batch? And also, is there any opportunities to improve that going even further?

Thomas Equels: Ed, we do have plans to continue to work on developing efficiencies in the manufacturing process. And in the bigger picture, if we are able to reach an arrangement with a larger pharma company for development and actual commercial distribution of the drug, that will allow for mass production of the Ampligen rather than production of small lots, which mass production techniques will create tremendous savings on a per-val basis. Chris, do you want to go into some of the things that we’re working on right now?

Christopher McAleer: Yes, I don’t necessarily want to go into the details of it. We’re looking at the patentability of the process that we have ongoing. Right now, the polymer production process is about 400,000 per batch of Poly I, Poly C12U. We have reduced that down to approximately 200,000 with this production. It is still a batch production process. I do believe that we can turn that into a continuous flow process, but we’re doing this iteratively. I think when we get that to a continuous flow process, we can probably increase production by three or four-fold for the same production cost. These changes that we’ve made to the polymer production don’t necessarily affect the fill and finish process of taking that API into Ampligen, which currently is in batch production.

However, that batch production of Ampligen is currently limited by the quantity of polymer that we can make at any one time. When we go to a continuous flow process of the polymer production and create that into larger quantities, we can increase the batch size production of Ampligen from approximately 9,500 vials to, I believe, somewhere around the 30,000 to 35,000 in production. And in doing so, we can locally project the reduction in cost by about 60% to 70%, which would take us somewhere from the 600,000 down to the 250,000.

Thomas Equels: Dr. Woo, does that answer your question?

Ed Woo: Yes, it does. Thank you very much, and I wish you guys good luck. Thank you.

Thomas Equels: Thank you. Thank you for your interest.

Operator: Thank you. Ladies and gentlemen, this concludes our question-and-answer session, and thus concludes our call today. We thank you for your interest and participation. You may now disconnect your lines.