GeoVax Labs, Inc. (NASDAQ:GOVX) Q1 2023 Earnings Call Transcript May 7, 2023

Operator: Good afternoon and welcome everyone to the GeoVax First Quarter 2023 Corporate Update Call. My name is Jack and I will facilitate today’s call. With me are David Dodd, Chairman and CEO; Mark Reynolds, Chief Financial Officer; Mark Newman, PhD, Chief Scientific Officer; Kelly McKee, MD, MPH, Chief Medical Officer; and John Sharkey, PhD, Vice President, Business Development. [Operator Instructions] As a reminder, this conference is being recorded. At this time, I am turning the call over to Gabby DeGravina of GC Capital.

Gabby DeGravina: Thank you. Please note the following. Certain statements in this presentation may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act. These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of factors, including whether GeoVax can develop and manufacture it’s product candidates with the desired characteristics in a timely manner and such products will be safe for human use; GeoVax’s vaccines will effectively prevent targeted infections in humans; GeoVax’s product candidates will receive regulatory approvals necessary to be licensed and marketed; GeoVax raises required capital to complete development of its products, there is development of competitive products that maybe more effective or easier to use than GeoVax’s products; GeoVax will be able to enter into favorable manufacturing and distribution agreements; and other factors over which GeoVax has no control.

GeoVax assumes no obligation to update these forward-looking statements and does not intend to do so. More information about these factors is contained in GeoVax’s filings with the Securities and Exchange Commission, including those set forth as risk factors in GeoVax’s Form 10-K. It is now my pleasure to introduce the Chairman and CEO of GeoVax, David Dodd. David?

David Dodd: Good afternoon and thank you for participating in the GeoVax corporate update call. Since the start of 2023, we have expanded patient enrollment and supported the Gedeptin Phase 2 clinical trial and the two Phase 2 trials for GEO-CM04S1; also, the third Phase 2 clinical program in support of CM04S1, evaluating the vaccine as a booster among patients with chronic lymphocytic leukemia has viewed by the FDA and is expected to initiate soon. We also recently expanded our rights related to CM04S1 to include all omicron variants, monkeypox, and smallpox, further differentiating our COVID-19 vaccine. While the clinical development progress Gedeptin and the CM04S1 remain our priority, we are also focused on GEO-MVA, our vaccine against monkeypox and smallpox; as well as the implementation of the transformative MVA continuous cell line manufacturing process.

Last year, we strengthened our balance sheet adding $37 million during a very difficult investment environment especially for the biotech industry. This enabled us to expand our current clinical programs, including additional sites, while also adding near-term opportunities related to further development opportunities, including our MVA manufacturing process, and expanding our oncology programs. We expect that our cash position will support our increased clinical program expansions and other initiatives through the remainder of this year. In the interim we will evaluate opportunities to further strengthen our balance sheet, resulting from supportive stock activities, business development opportunities, and non-dilutive opportunities related to government, and NGO funding.

Gedeptin is a cancer therapy currently and has expanded multisite evaluation among patients suffering from advanced head and neck cancers. The product has received orphan drug designation and funding for the current clinical trial from the FDA orphan drug has clinical trials program. Our target population for the initial indication includes head and neck cancer patients, who are receiving palliative care, having failed other therapies and medical interventions. There are approximately 67,000 new cases of head and neck cancers annually in the US, and approximately 13,000 deaths annually resulting from head-and-neck cancers. This represents our initial targeted patient population. Worldwide, there are approximately 900,000 new cases of head and neck cancers annually, and approximately 400,000 deaths.

Patients suffering from advanced head and neck cancer represents a critical unmet medical need which we hope to address. The FDA funding the initial 10 patient portion of the clinical program underscores the recognition of this critical unmet medical need. Our focus is on completing the 10-patient study funded by the FDA. We anticipate completion of the initial 10 patient study yet this year including our review of the results. We will review those results with the FDA along with our recommendations for an expanded program, while also discussing with the FDA the potential for an expedited BLA filing. We are excited about the outlook and promise of Gedeptin within advanced head and neck cancers, as well as other opportunities related to the expanded use in other indications.

We foresee significant opportunity in addressing various tumors as monotherapy, as well as potential combo therapy in conjunction with other therapies such as immune checkpoint inhibitors. We also anticipate potential synergy with the GeoVax Mark-1 tumor-associated antigen approach. Relative to commercialization, we anticipate partnering and collaborations in support of worldwide use for which business development activities have already been initiated. We hold worldwide rights for the use of Gedeptin and all indications. The vast array of unmet medical needs within oncology represents significant opportunities for GeoVax to advance novel approaches, addressing various cancer patient needs worldwide. Throughout 2023, we are participating in various oncology conferences, some of which we expect Gedeptin presentations and with others, Gedeptin partnering discussions.

GEO-CM04S1, our next-generation COVID-19 vaccine differentiates from the current authorized COVID-19 vaccines in targeting both the antibody and cellular arms of the immune system, focusing on providing a more robust and durable protection than the current authorized vaccines. This is critically important in addressing the high-risk populations of immune compromised individuals for whom the current authorized vaccines and monoclonal antibodies are inadequate. Such populations include those with various blood cancers, renal disease, sickle cell anemia, HIV positive, autoimmune diseases such as lupus, and those on immune suppressive therapy. In general, patient groups with abated immune systems unable to respond adequately to approved mRNA vaccines are at such high risk.

In the U.S., there are approximately 12 million to 15 million individuals within this overall population, with over 200 million worldwide. There is a major critical need for next-generation COVID-19 vaccines to support such individuals. And we believe the CM04S1 is the leading next-generation vaccine in clinical development. Our recently published article in the New England Journal of Medicine highlights the critical need for a vaccine to induce both antibodies and T-cells for optimal protection against SARS-CoV-2 infection. CM04S1 is specifically constructed to include the spike protein and the nucleocapsid protein, and to induce a broader focused immune response specific to those proteins on the SARS-CoV-2 virus. Clinical evaluation demonstrated the CM04S1 does, in fact, induce both strong antibody and T-cell responses against both the spike and nucleocapsid proteins.

The results of this clinical study were reported last year in the Lancet Microbe publication of the Phase 1 data. The adoption of T-cell immune responses is especially critical among those patient populations, who have immune systems with depleted ability to mount effective antibody responses. New safety and immune response data from the Phase 2 trial were presented at the World Vaccine Congress in Washington DC, during April of 2023, highlighting the potential effectiveness of this vaccine in patients undergoing different types of treatments for hematologic cancer. Clinical testing of this vaccine continues to provide compelling data supporting development and alternate use in the targeted patient populations. While the noise of COVID seems to have died down, SARS-CoV-2 continues to evolve with threatening variants of concern.

It is well accepted that the current authorized vaccines are not sufficiently protective and that their durability is unsatisfactory. In fact, just a few weeks ago, the White House announced Project Next Gen, a $5 billion initiative, the follow-on from Operation Warp Speed seeking COVID-19 vaccines with enhanced breadth of protection against variants and improved durability, particularly being interested in novel vaccine candidates in clinical trial or capable of entering clinical trials within the next nine months. We believe the CM04S1 is the leading example of the desired next-generation vaccines. We have considerable interest both domestically and internationally in participating in our clinical development program. We believe that an opportunity for an expedited regulatory path will likely exist due to our focus on high-risk populations unserved by the current COVID-19 vaccines as well as the monoclonal antibody therapy.

Also, we anticipate partnering collaborations and support of worldwide commercialization and distribution. Our focus for the remainder of 2023 includes accelerating efforts in support of Gedeptin in the CM04S1 Phase 2 clinical programs, advancing the GeoVax MVA vaccine specific for monkeypox and smallpox into development, and further advancement of our program focused on improved MVA manufacturing processes. Presentations are expected at various scientific and medical conferences to update the progress on both Gedeptin and CM04S1. We anticipate reporting further preclinical information related to the use of the Gedeptin technology used in conjunction with immune checkpoint inhibitors yet this year. Regarding GEO-MVA, it is a vaccine against monkeypox and smallpox.

Our intent is to be the first and primary US based supplier of an MVA based vaccine to protect against Mpox or monkeypox, or smallpox, providing expanded supply and access worldwide, especially related to low and middle-income countries which have consistently experienced significant difficulty in the supply of many critical vaccines. We are advancing this initiative and look forward to reporting progress quarterly. Last year of 2022, we strengthened our balance sheet, adding $37 million during a time of which many biotech firms were furloughing programs and or people. We feel that our capital development success has reflected investor support and belief in the value growth opportunities underway at GeoVax. We continue to receive strong interest related investment capital, which we will evaluate, but we’re focused on execution towards our 2023 goals, strengthening shareholder value and achieving critical reporting milestones for our development programs.

Now I’d like to turn the presentation over to Mark Reynolds, GeoVax Chief Financial Officer, for a review of our recent results and financial status. Mark?

Mark Reynolds: Thank you, David. I’ll begin with a brief overview of our income statement. And I’ll first point out that we reported no grant revenues during 2023 as compared to a small amount in 2022, which is reflective of the wind down of our grant from the U.S. Army for our last fever preclinical program. I’ll note, however, that we are actively seeking additional non-dilutive government funding for our preclinical and clinical development programs, and we expect this to be an important component of our financing mix in the future. Research and development expenses were $2.8 million in the first quarter of 2023 versus $1.3 million in 2022. The increase was planned and expected and is associated with clinical trial activity for our CM04S1 and Gedeptin programs.

The increase is also reflective of higher personnel and consulting costs as we staffed up during 2022. G&A expenses were $1.5 million in the first quarter of ‘23 as compared to $1.2 million in ‘22, with the increases also associated with higher personnel and consulting costs as well as patent costs. So, overall, net loss for the first quarter of 2023 was $4 million or $0.15 per share, versus $2.4 million in 2022 or $0.34 per share. Again, with the increases primarily associated with the ramp-up of organizational infrastructure and other costs associated with the CM04S1 and Gedeptin clinical trials. Turning now to the balance sheet, our cash balances at March 31 were $23.9 million, as compared to $27.6 million at December 31. The change in cash is reflective of $3.8 million used in operating activities.

There were no significant financing or investing activities during the first quarter. Our outstanding common shares now stand at 26.4 million. Funding our three ongoing Phase 2 clinical programs is obviously the most important use of our cash and our top financial priority. Our cash runway is sufficient to fund these programs through the milestones expected to occur over the course of this year, as David previously mentioned. We believe the advancement of our clinical programs will create an attractive investment opportunity for new fundraising activities, and I’ll be happy to answer any questions during the Q&A period. So I will now turn the call back over to David.

David Dodd: Thank you, Mark. My colleagues and I will now answer your questions. Joining us for the Q&A session are Dr. Mark Newman, Kelly McKee, and John Sharkey, our Chief Scientific Officer, Chief Medical Officer, and Vice President of Business Development respectively. I will now turn the call back to the operator for instructions on the question-and-answer period.

Q&A Session

Operator: Certainly. [Operator Instructions] Jason Kolbert with Dawson James, your line is open.

Operator: Vernon Bernardino, H.C. Wainwright.

Operator: Kumar Raja with Roth Capital, your line is open.

Operator: James Molloy with Alliance Global Partners, your line is open.

Operator: Robert LeBoyer with Noble Capital Markets, your line is open.

Operator: There are no further questions at this time. I would like to turn the call back over to David Dodd for closing remarks.

David Dodd: Thank you and thank you everyone for participating in this update call and sharing our achievements progress and outlook. We greatly appreciate your interest. Our biggest focus and greatest challenge is to see an accelerated pace of patient enrollment, getting to data milestones sooner, so we can talk about greater database of results. And we will continue to stay focused on that, that’s what we are focused on, Gedeptin, CM04S1, and the other development programs we have talked about today. Our goal is that by doing this, we will be able to build shareholder value, stakeholder value, and of course, providing a motivating career development opportunities for our team. We want to thank our Board of Directors, our staff, our advisors, and all other parties, including some of you who have been asking questions, who continue to support, advise, and guide us towards achieving success.

With that, we wish you all a great evening. Have a great weekend. And again, thank you for your interest in GeoVax.

Operator: This concludes today’s GeoVax call. We thank you for your participation. You may now disconnect.