GeoVax Labs, Inc. (NASDAQ:GOVX) Q2 2023 Earnings Call Transcript

GeoVax Labs, Inc. (NASDAQ:GOVX) Q2 2023 Earnings Call Transcript August 9, 2023

GeoVax Labs, Inc. misses on earnings expectations. Reported EPS is $-0.22 EPS, expectations were $-0.16.

Operator: Good day. My name is Jordan and I will be your conference operator today. At this time I would like to welcome everyone to the GeoVax Second Quarter Earnings Conference Call. I will turn the call over to Gabrielle.

Gabrielle 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 its vaccines 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 vaccine 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 at risk factors in GeoVax’s Form 10-K. It is now my pleasure to introduce the Chairman and CEO of GeoVax, David Dodd.

David Dodd: Good afternoon, and thank you for participating in the GeoVax corporate update call. This year we have expanded patient enrollment in support of the Gedeptin Phase 2 clinical trial and the two phase two trials for GEO CMO4S1, as well as announcing the initiation of the third Phase 2 clinical program, evaluating this next-generation COVID-19 vaccine as a booster among patients with chronic lymphocytic leukemia. We also recently expanded our rights related to CMO4S1 to include Omicron variants, monkeypox and smallpox further differentiating our COVID-19 vaccine. While the clinical development progress of Gedeptin and the CMO4S1 one remain our priority, we’re 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.

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During the second quarter, we progressed each of these priority initiatives. Currently we are funded into 2024, and we anticipate further strengthening our balance sheet as a result of supportive stock activities, business development initiatives, and non-dilutive opportunities related to government and NGO funding. As recently announced, interim data from the current Gedeptin clinical program was presented in July at the American Association for Cancer Research and the American Head and Neck Society joint conference on head and neck cancers. We are pleased and encouraged by the results, noting no dose limiting toxicities or serious adverse events definitely attributable to treatment with impaired growth in targeted lesions observed in the majority of the patients.

We anticipate completion of the current clinical program shortly, and we are already planning the next stage of clinical development relative to this promising therapy. There are approximately 67,000 new cases of head and neck cancers annually in the U.S. and approximately 13,000 deaths. 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 represent a critical unmet medical need. We are excited about the outlook and promise of Gedeptin therapy against numerous tumors and cancers. We foresee significant opportunity addressing various tumors as monotherapy, as well as the potential of combo therapy administering Gedeptin in conjunction with other therapies such as immune checkpoint inhibitors.

We anticipate publication of compelling preclinical evaluation of Gedeptin used in combination with ICIs later this year. Relative to commercialization, we anticipate partnering and collaborations in support of worldwide use for which business development activities have been initiated. We hold worldwide rights for the use of Gedeptin in 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. Increasingly, we are participating in various oncology conferences, some of which we expect Gedeptin presentations and with others Gedeptin partnering discussions. GEO CMO4S1, our next generation COVID-19 vaccine differentiates from the currently authorized COVID-19 vaccines in targeting both the antibody and cellular arms of the immune system, focused on providing a more robust and durable protection than the current vaccines.

This is critically important in addressing the high risk populations of immunocompromised individuals for whom the current vaccines and monoclonal antibody therapies 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 ablated 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 immune compromised individuals, worldwide there are an estimated 200 plus million. This is a major critical need for next generation COVID-19 vaccines to support such individuals, and we believe that CMO4S1 is the leading next generation vaccine in clinical development.

During second quarter 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 being particularly interested in novel vaccine candidates already in clinical trials. We believe the CMO4S1 is a leading example of the desired next generation COVID-19 vaccine. 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 likely exists due to our focus on high risk populations unserved by the current COVID-19 vaccines and monoclonal antibody therapies. Also, we anticipate partnering and collaborations in support of worldwide commercialization and distribution.

Regarding Project NextGen, all we can say at this time is that we’re deeply involved in the process and discussions. We hope to provide further updates soon. For the remainder of 2023 we are focused on accelerating efforts in support of the Gedeptin and CMO4S1 Phase 3 clinical programs advancing our MVA vaccines specific for Mpox and smallpox into development and further advancement of our program focused on improved MVA manufacturing processes. We also anticipate opportunities to add additional capital in support of these programs accelerating the pace of progress and reporting a milestone catalyst. Now I would 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. So starting with our income statement, I will focus on the comparative figures for the six month periods of 2023 versus 2022. We had no active grants during 2023 so far, so we reported no grant revenues as compared to a small amount in 2022. I’ll note however, that as David suggested, we are actively seeking additional non-dilutive funding for both our preclinical and clinical development programs, and we expect this may potentially be a very important component of our financing mix in the future. Research and development expenses were $7.5 million in 2023 versus $2.6 million in 2022 with the increase primarily associated with clinical trial activity for the CMO4S1 and Gedeptin programs, including manufacturing costs for clinical trial materials.

The increase is also reflective of higher personnel costs as we brought on two additional executive level employees this year, which added depth to our regulatory and quality control functions. General and administrative expenses were $2.9 million in 2023 versus $2.1 million in 2022 with the increase mostly associated with higher personnel, consulting and patent costs. So, overall net loss for the first six months of 2023 was approximately $10 million or $0.38 per share versus $4.7 million in 2022 or $0.47 cents per share, again, with the increase being driven by the CMO4S1 and Gedeptin clinical trial activity. Turning now to the balance sheet, our cash balance as of June 30 were approximately $18 million as compared to $27.6 million at the end of 2022.

The change in the cash balances is reflective of $9.8 million used in operating activities. There were no significant financing or investing activities so far during 2023. Our outstanding common shares stand at 26.4 million. Funding our four ongoing Phase 2 clinical programs is the most significant use of our cash and our top financial priority. But I’ll note that the recently initiated fourth trial that being for CLO is being fully funded primarily through non-dilutive sources with GeoVax providing some relatively minor support for analytical costs. Our cash runway is sufficient to fund these programs through the milestones expected to occur through the end of this year and into early 2024. So, I’ll be happy to answer any questions during the Q&A.

And I’ll turn the call back now. David.

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

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Q&A Session

Operator: [Operator Instructions] Your first question comes from the line of Robert LeBoyer Noble Capital Markets.

Robert LeBoyer: Hi and congratulations on all the progress that you’ve made in the past quarter. My question has to do with your mention of a combination trial with the checkpoint inhibitors, and I was wondering if there was any data that was going to be presented or any plans for the rest of the year. You had mentioned expansion of the current trials and completing enrollment, but I was wondering if there was any intention to start another arm or what the potential for combination therapy is right now?

David Dodd: Sure. Robert. This is David. I’ll answer and then Kelly, if you want to add anything else. What I would say is, right now it’s in preclinical work, we’re supporting that work of the evaluation of Gedeptin in conjunction with ICIs. There is a manuscript that’s in development. Again, this is preclinical work that we anticipate that manuscript will be published – that our guidance and understanding is yet this year. And we’ll continue to evaluate it, but at this time, we’re not working in the clinic in any combo therapy. We’re focused right now on the current clinical program. Kelly, do you want to add anything to that?

Kelly McKee: Sure. I mean one of the really exciting things about Gedeptin is that its mechanism of action is essentially tumor agnostic with respect to solid cancers, solid tumor cancers. And so, I think we have an opportunity to sort of survey the cancer landscape, if you will and target a number of different tumor types. And in that regard we are exploring sort of next steps in the head and neck cancer space. But we’re also in discussions with some academic investigators who have expressed an interest in looking at Gedeptin in breast cancer patients. And if we proceed in that direction, I think, the likely opportunity will be for us to go in with a combination Gedeptin checkpoint inhibitor trial. The design of which is again sort of in early – the early phases of discussion. So really can’t go into details on that, but that that’s probably going to be our next non-agent head and neck cancer target.

Robert LeBoyer: Thank you.

David Dodd: Okay. Thank you very much.

Mark Reynolds: Thank you, Rob.

Operator: Your next question comes from the line of Kumar Raja from ROTH Capital.

Kumar Raja: Thanks for taking my questions. So I had a question about the booster trial. In terms of data when can we expect data from this trial? Will we have any interim data from this trial?

David Dodd: Kumar, are you asking about the healthy volunteer booster or the booster for the CLL patients?

Kumar Raja: I’m asking about the CLL trial?

David Dodd: Okay. Kelly, you want to address that, please?

Kelly McKee: Yes. So the CLL trial just began enrolling a couple of weeks ago, and so it’s still in the early phases of study. The expectation based on our discussions with the principal investigator at the City of Hope Medical Center and their team is that we’ll have that trial fully enrolled within about a six-month period. Now the primary readout is a month or so after the second vaccination, which is three months after the first vaccination. So you sort of do the math and I think you’re likely to see at least an initial view of outcomes – of immunologic outcomes and safety outcomes sometime towards the end of 2024, early 2025. The study itself is a follow up period of a year, so it won’t be completed for six, 12 months after it’s fully enrolled, so whenever that time point hits. Does that answer your question?

Kumar Raja: Yes. What I’m trying to get into is like, will you be waiting for all these 80 patients to be enrolled? Or will you be releasing some data out, let us say data from like 40 patients or something like that? Will you be providing us any update in the interim?