Imunon, Inc. (NASDAQ:IMNN) Q3 2023 Earnings Call Transcript

Imunon, Inc. (NASDAQ:IMNN) Q3 2023 Earnings Call Transcript November 17, 2023

Operator: Good morning. My name is Alan, and I will be your operator today. At this time I would like to welcome you to Imunon’s Third Quarter 2023 Financial Results Conference Call. [Operator Instructions] I would like now to turn the call over to Kim Golodetz. Please go ahead.

Kim Golodetz: Thank you and good morning everyone. This is Kim Golodetz with LHA. Welcome to Imunon’s 2023 third quarter financial results and business update conference call. During today’s call, management will be making forward-looking statements regarding Imunon’s expectations and projections about future events. In general, forward-looking statements can be identified by words such as expect, anticipates, believes or other similar expressions. These statements are based on current expectations and are subject to a number of risks and uncertainties, including those set forth in the company’s periodic filings with the Securities and Exchange Commission. No forward-looking statements can be guaranteed, and actual results may differ materially from such statements.

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I also caution that the content of this conference call is accurate only as of the date of the live broadcast, November 14, 2023. Imunon undertakes no obligation to revise or update comments made during this call except as required by law. With that said, I would like to turn the call over to Dr. Corinne Le Goff, Imunon’s President and Chief Executive Officer. Corinne?

Corinne Le Goff: Thank you, Kim, and good morning, everyone. Joining me today is Jeffrey Church, our Chief Financial Officer. In addition, Dr. Khursheed Anwer, our Chief Science Officer, will be available during the Q&A session at the end of our prepared remarks. Imunon’s growth and development is dependent on four pillars. Last quarter, I spent the bulk of our time on the development of our PlaCCine prophylactic vaccines modality as an out-licensing and partnership opportunity. While I will certainly update you on this modality and we did have some interesting developments, first, I’d like to highlight IMNN-001 or DNA-based Interleukin 12 immunotherapy for the localized first line treatment of advanced ovarian cancer in combination with a standard-of-care chemotherapy, and it’s currently in Phase II clinical development.

Recall that in September 2022, we reached full enrollment of 110 patients and this year, in September 2023, we reported an additional set of interim, more mature data, showing promising progression free survival and overall survival data. In the intent-to-treat population, we demonstrated a delay in disease progression in the treatment arm of approximately 33% or more than three months benefit and preliminary overall survival data followed a similar trend showing an approximate nine month improvement in the treatment arm over the control arm. [Indiscernible] ratio of 0.78 approaches the critical defined value of 0.75 set at an 80% confidence interval for the ITT population. Since OVATION 2 is an exploratory study with totals of control plus study arms of only 110 patients, it was not powered to a P inferior to 0.05 and the current trends looks promising.

Recall that this study is evaluating the dosing, safety, efficacy and biological activity of intraperitoneal IMNN-001 in combination with neoadjuvant chemotherapy or NACT and this in patients newly diagnosed with advanced epithelial, ovarian, fallopian tube or primary peritoneal cancer. NACT is designed to shrink the tumors as much as possible for optimal surgical removal after three cycles of chemotherapy and following NACT patients undergo interval debulking surgery, followed by three additional cycles of chemotherapy to treat any residual tumor. IMNN-001 is administered weekly during the course of NACT. So we also reported for the first time data on new subset of patients treated with PARP inhibitors. When we began the OVATION 2 Phase II trial the PARP inhibitors were not part of the first-line maintenance treatment in ovarian cancer.

Now they form an important part of the patient’s treatment plan. A simple analysis of patients who received IMNN-001 and post-chemo maintenance therapy with PARP inhibitors versus PARP inhibitors alone in the control group shows positive impacts. The median PFS in the PARP inhibitor plus NACT group was 15.7 months yet PFS in the PARP inhibitors plus NACT plus IMNN-001 group was 23.7 months or eight months longer. In addition, the median OS in the PARP inhibitors plus NACT group was 14.6 months and median OS, overall survival, has not yet been reached in the PARP inhibitor plus NACT plus IMNN-001 group. So although these data are from a small number of patients, they are intriguing. We also saw continued benefits in secondary endpoints including a 20% higher R0 tumor resection score and a doubling of CRS 3 chemotherapy response score to approximately 30% in the treatment arm, versus 14% in the control arm.

A complete tumor resection or R0 is a microscopically margin-negative resection in which no gross or microscopic tumor remains in the tumor bed. Chemotherapy response score is considered a good prognostic indicator in ovarian cancer, so that’s why those endpoints are important to look at. And safety analyses continue to show good tolerability of IMNN-001 in this setting. Now enrollment in our second Phase II study which, if you remember, is done in collaboration with Break Through Cancer Foundation has begun with the first patient treated at MD Anderson Cancer Center last month. The study is evaluating IMNN-001 in combination with Bevacizumab. All-in, the study is expected to enroll 50 patients with Stage III/IV ovarian cancer at several sites, including Memorial Sloan Kettering and Daner-Farber.

The trials primary endpoint is depiction of minimal residual disease or MRD by second look laparoscopy, and the secondary endpoint is PFS. Initial second look laparoscopy data are expected within a year following the completion of enrollment and final PFS data are expected approximately three years following enrollment completion. This trial will include a wealth of translational endpoints aimed at understanding the clonal evolution and immunogenomic features of the MRD phase of ovarian cancer that is currently undetectable by imaging or tumor markers. We will keep you updated as sites are added and, as a reminder, much of this trial is being funded by Break Through Cancer. So we are now six to seven months away from seeing the final readout data of OVATION 2 program and this is an incredibly exciting time for Imunon.

If positive, this data would be transformational to the field and which confirm how process of IL-12 being a potent immunomodulator for cold solid tumors. We will consult with the FDA on the potential regulatory path forward. Our small Phase II is showing promising trends in the ITT population and a strong benefit to standard maintenance PARP inhibitors therapy, which could inform registration study. PARP inhibitors are known to significantly increase PFS, but the improvement in overall survival is not yet established and resistance to PARP inhibitor therapy is a concern, which warrants novel combination approaches, such as with the immune agent IMNN-001. Let’s now turn to PlaCCine, our proprietary mono-valent or multi-valent DNA vaccines based on a DNA Plasmid that controls the expression of pathogen antigens, and a non-viral synthetic DNA delivery system.

PlaCCine is currently being evaluated for the development of next generation vaccines, or as we call them the vaccines of the future. We continue to bolster our preclinical data set with PlaCCine, which suggests this asset has been de-risked and is performing as anticipated. Our first PlaCCine product is IMNN-001, which is in final stages of preparation for an IND, Investigational New Drug application to the FDA. IMNN-001, which we view as a proof-of-concept, is designed to protect against [Indiscernible] Omicron XBB1.5 variant, in accordance with the FDA Vaccines and Related Biological Products Advisory Committee, to the VRBPAC committee announcement that has been made in June 2023 and that established a framework for updated COVID-19 doses.

Imunon is targeting the first quarter of 2024 for submitting the IND and then enrolling the first subject in a Phase I trial in April 2024 with rapid advancements into Phase II trial by mid-2024. So, we are excited about the body of preclinical data and we have been active in presenting this data at various conferences, both in the US and Europe. For example, last month, Dr. Anwer, presented at the third International Vaccines Congress, highlighting immunogenicity data and the development status of IMNN-001. Dr. Anwer presentation described the multiple advantages of PlaCCine over current commercial vaccine platforms, including multivariable antigen expression and T-cell responses versus protein and mRNA vaccines. In addition, preclinical studies show that PlaCCine elicits better antibody response kinetic following a single dose, and demonstrate better shelf life of at least 12 months at four degrees Celsius and at least two weeks at very high temperatures of 37 degrees Celsius.

These characteristics suggest superior commercial handling and distribution properties compared with mRNA vaccines, as well as greater manufacturing flexibility. Compared with viral or other DNA vaccines, or protein vaccines, PlaCCine vaccines habitantes in T-cell responses, safety, compliance and manufacturing flexibility. Dr. Anwer’s presentation also describes the versatility of the PlaCCine modality demonstrating activity against Marburg and influenza viruses in collaboration with The Wistar Institute and activity against Lassa virus, which is being evaluated at the NIH/NIAID. I remind you that during the third quarter, we entered into a cooperative research and development agreement with NIAID. This is a three-year agreement under which the NIAID will evaluate the immunogenicity and efficacy of two Imunon DNA-based Lassa virus vaccine candidate.

The agency will assess the efficacy of PlaCCine DNA constructs against Lassa virus in guinea pig and non-human primate disease models, including both prime and prime-boost vaccine strategies. We also announced our collaboration with Wistar in January of this year and The Wistar Institute’s Vaccine & Immunotherapy Center is uniquely positioned to advance new vaccine formulations to facilitate further expansion and development of vaccine. Collaborate with outside partners, particularly those that will provide some or all of the funding or the reserves are a key pillar of our growth strategy. Now later today, Jean Boyer, our Vice President of Research and Development, will be presenting at the Vaccines Summit in Boston. Dr. Boyer’s presentation describes preclinical T-cell responses and notes that the induced immune response in vaccinated mice were persistent without decay for up to 14 months after vaccination.

So as you might think, we are very pleased with the duration of response. So we believe that our PlaCCine modality is revealing itself as an important potential option in addressing not only pandemic response but also assist the seasonal vaccine option. Its stability at regular refrigerator temperatures of 12 months, room temperature stability over at least one month, and stability at high temperatures for at least two weeks plus the immune response duration and the plug-and-play model, using the Plasmid DNA backbone, has shown excellent pre-clinical results that are so important to a commercial vaccine product. And this is particularly important as many pathogens, such as Lassa virus may arise in geographies where there are challenges with refrigeration, storage and distribution networks.

In addition, our ability to rapidly switch out antigens and load multiple antigens into the same vaccine should be instrumental in addressing the spread of disease. So in addition, our Plasmid modality uses a DNA Plasmid and a non-virus synthetic DNA technology for the expression of pathogen antigens. And our DNA-based vaccines can be administered using a standard syringe and IM injection and are independent of viruses or specialized devices for delivery like a corporation [Phonetic]. Last quarter, I touched on our work to develop two more modalities as logical extensions of our prophylactic vaccine modality. FixPlas concerns the application of our DNA technology to produce universal cancer vaccines, also called tumor-associated antigen cancer vaccines.

We have initiated preclinical work to develop a Trp2 and NY-ESO-1 tumor-associated antigen cancer vaccine in melanoma, which we call IMNN-201. This work is in a very early stage and I look forward to updating you as it progresses. We are also in early discovery of our fourth modality IndiPlas for personalized neo-antigen cancer vaccines. And we plan to enter into new collaborations that focus on developing AI-powered computational approaches, and state-of-the-art cell sequencing technologies to identify tumor antigens in patient samples, and create the next generation of personalized cancer vaccines. And as with FixPlas, we will update you as our development work progresses. Importantly, recall that we manufacture our vaccines at our own cGMP facility in Alabama and our decision to manufacture in-house offers us many strategic benefits, but notably, the controls on cost, quality and timelines.

So now I will turn the call over to Jeff Church who will discuss our financial results. Then I’ll come back and provide a review of upcoming milestones and activities. Jeff?

Jeffrey Church: Thank you, Corinne. Details of Imunon’s third quarter 2023 financial results were included in the press release we issued this morning and in our Form 10-Q, which we filed today before the market opened. Imunon ended the quarter with $19.5 million in cash and investments. Our net cash usage for operating activities was $4.5 million in the third quarter of 2023, down slightly from $4.6 million for the comparable prior year period. Cash provided by financing activities of $100,000 resulted from equity sales under our at-the-market facility. If we combined the $1.8 million of planned future sales of Imunon’s State of New Jersey NOLs, we believe we have sufficient resources to fund operations at least 12 months from the filing date of our 10-Q, which we just filed.

Let me now turn to a review of our financial results. Imunon reported a net loss for the third quarter of 2023 of $3.5 million or $0.37 cents per share. This compares with a net loss of $6.1 million, or $0.87 for the third quarter of 2022. Operating expenses were six point — I’m sorry $3.9 million in the current quarter, down 38% from the $6.3 million in the third quarter of 2022. Breaking down these items by line item; research and development expenses were $2 million, a decrease of $400,000 from the prior year’s third quarter. More specifically, R&D costs associated with development of our PlaCCine DNA vaccine modality increased to $800,000 from $500,000 a year ago, clinical costs decreased to $400,000 from $1 million in the third quarter of last year as a result of completing enrollment of the OVATION 2 study last September, which Corinne mentioned in her earlier comments.

Other preclinical development costs were $300,000 compared with $600,000 in the prior year. Our CMC costs increased to $0.5 million from $300,000 a year ago. This reflects the development of the in-house pilot manufacturing capabilities for DNA Plasmid and nano-particle delivery systems and the manufacture of supplies for IND enabling studies as well as the Phase I/II clinical trial for our COVID vaccine. General and administrative expenses were $1.9 million in the third quarter of 2023 compared to $3.9 million in the comparable prior year period. This $2 million decrease was due to lower non-cash stock compensation expense, professional fees, primarily legal costs, employee-related costs and insurance. Other non-operating expenses were $400,000 in the third quarter of this year compared to $26,000 for the prior year.

This increase was due to higher interest income from the company short-term investments. I’ll just briefly touch on our financial results for the first quarter — I’m sorry for the first nine months of the year. For the nine months ended September 30, 2023, we reported a loss of $14.6 million or $1.64 per share. This compares with a net loss of $22.7 million or $3.42 for the same nine-month period of 2022. Operating expenses were $15.1 million in the first nine months of 2023, an 18% decrease from $18.4 million for the same period of 2022. Cash used for operating activities was a little over $15 million for the first nine months of 2023. This compared to $18.1 million for the same period of 2022. The decrease was primarily due to a one-time payment of $4.5 million in interest expense resulting from the sale and subsequent redemption of $30 million of Series A & B convertible redeemable preferred stocks in the year ago period.

Cash used by the financing activities of $3.7 million during the first nine months of 2023 resulted from the earlier repayment of the company’s loan facility with Silicon Valley Bank that totaled $6.4 million, which was offset by $2.7 million of sales of equity under our at-the-market facility. We also received net proceeds of $1.6 million from the sale of unused New Jersey NOLs in the first quarter 2023 and, as I mentioned earlier, we have an additional $1.8 million of NOLs sales that we anticipate this year and next. Our projected cash utilization for the balance of 2023 is approximately $4.0 million for the fourth quarter. The majority of expenses are related to the development of our PlaCCine modality including the development of in-house pilot manufacturing capabilities mentioned earlier.

I’ll now turn the call back to Corinne.

Corinne Le Goff: Thank you, Jeff. Imunon is tightly focused on harnessing the power of the immune system. Our goal is to provide more potent and durable immunity for millions of people with cancer or infectious diseases, while creating significant value for our shareholders. Collaborations are a key component of our strategy and we are committed to ensuring that Imunon has the most talented advisors available to help us achieve our goal. To that end, we are delighted to expand our scientific advisory board with the additions of Dr. Patrick Ott, Clinical Director of the Melanoma Disease Center and the Director, Clinical Sciences, of the Center for Immuno-Oncology at the Dana-Farber Cancer Institute; and Dr. Sachet Shukla, Assistant Professor in the Department of Immunology, Division of Basic Science Research at MD Anderson, where he also serves as Director, Computational Biology ECLIPSE or Evolution of Cancer, Leukemia, and Immunity.

The third quarter and recent weeks were exceptionally busy and full of achievements with more expected milestones to come. Among them, we reported compelling interim data with IMNN-001 in the OVATION 2 Study in advanced ovarian cancer, particularly in a subset of patients taking PARP inhibitors in combination with chemotherapy, and IMNN-001. Our next milestone from this study is to report top line data in mid-2024. We de-risked our PLACCINE Modality across several pathogens of interest by demonstrating the immunogenicity and safety of our vaccines. We have generated compelling data in SARS-CoV-2 and IMNN-101, our next-generation COVID-19 seasonal booster, will be in the clinic in April with human clinical data expected in the second quarter of 2024.

We also have generated excellent immunological response against pathogen of concerns, especially Monkeypox, flu, Lassa virus and Marburg virus. We unveiled a state-of-the-art manufacturing site in Huntsville, Alabama, to reduce our reliance on others, which is intended to give us control not only on quantities of material but also quality and costs. And we entered into collaborations to advance our technology with more to come and to build capabilities for the development of cancer vaccines. Before we take your questions, I want to mention that we will be available for one-on-one meetings with the investment community in the week of January 8 in San Francisco, concurrent with the Annual JPMorgan Healthcare Conference, so please contact our investor relations firm, LHA, if you would like to schedule a meeting.

With that I open up the call to your questions. Operator?

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Q&A Session

Operator: [Operator Instructions] The first question comes from Emily Bodnar of HC Wainwright. Please go ahead.

Emily Bodnar: Hi, good morning, and thanks for taking the questions. I wanted to ask on OVATION 2, the recent data that you had. So obviously you talked about the benefit you had with PARP inhibitors and assumingly also benefit in BRCA-positive patients. But you had a previous interim data readout where you mentioned that you had a benefit in BRCA-negative patients. So curious if you can maybe speak to why you think you might be seeing the switch there and why you think there is synergy with PARP inhibitors and then just discuss how you’re thinking about next steps, whether you’re planning to evaluate IMNN-001 broadly or specifically a combination with PARP inhibitors? Thanks.

Corinne Le Goff: Thank you very much Emily. So I would start and maybe I’ll let also Khursheed answer your questions. So you’re absolutely correct. Like if you remember last year, we did preliminary data cut, with very immature data and we showed benefits in BRCA-negative population. Now that we have more patients and more events, so this data cut was with 70 events across both arms, we are showing a benefit in the ITT population and we specifically decide to look at patients treated with PARP inhibitors because the gray [Phonetic] color signature with BRCA doesn’t give the full answer. As you know, patients receive PARP inhibitors, if they are BRCA-positive, even BRCA-negative patients get PARP inhibitors, as it has been demonstrated that it can increase progression free survival in HRD positive patients.

And so we wanted to be a bit more accurate in our description in designing this group of patients who would want it to look at. And as you know, HRD, which is homologous recombination deficiency, is very common, 50% of women with advanced ovarian cancer have tumors that test positive for HRD and only half of these BRCA mutations. So it’s very interesting to look at patients treated with PARPs, regardless of their BRCA status, and then to get the granularity, and we’ll get this data as we get to the top line data. So, what is our assumption here in terms of what’s happening with the PARP inhibitors, so recall that the PARP inhibitors are administered after the chemotherapy. We discussed this with our advisors and their hypothesis is that IL-12, so IMNN-001, kind of sensitizes the tumor for the PARP inhibitors.

So that’s what they are thinking, which makes sense if you want and because I hope disease that IL-12 as being a very potent immune modulator agent can turn cold tumor into hot tumor. So as we progress, of course, we will talk to the regulators, we want to discuss with them the regulatory path and we should do this sooner than later in anticipation of the topline results in June. Maybe Khursheed, if you’d like to add to what I have said,

Khursheed Anwer: No, I mean, I think you’ve covered pretty much Corinne but I just wanted to start with Emily’s last part of the question, which you just kind of addressed that potential mechanisms. So, Emily, as you know, back in Phase I study we did report change in the tumor microenvironment from the treatment, where we saw increase in CD8 positive cells to immunosuppressive marker ratio. That suggests that the environment was transitioned from immunosuppressive to more stimulatory. So that itself, as Corinne said, you have this environment now, before PARP come in, your tumor environment has changed to be more fighting against tumor, that could be one potential mechanism. In other words, you’ve sensitized the tumor for PARP.

As you know PARP causes cell death, DNA repair doesn’t happen and that releases antigen and if you have a good immune stimulatory environment that released antigen will potentiate the immune responses. That’s a potential mechanism and I think that’s it, but I think that potentially, theoretically it makes sense. Now, first part of your question was about BRCA negative and Corinne did eloquently pointed that out as well, that was early data, but also the molecular signature wise, it’s a lot more to learn in ovarian cancer. Initially, we defined it as BRCA positive, BRCA negative, that’s more of a somatic but in tumor also, you have this homologous recombination deficiency. And that’s a lot of variability there, IT there, there are several enzymes, some are deficient in some patients, some are not deficient in other patients.

So we’ll also try to look into the database to better understand the micro-signature, not just BRCA positive, BRCA negative, but for the subtypes as to really what’s the extent of deficiency and see if we can make some correlate. If you do that, then you really lower the sample size, because you only have about 70, you’re not going to further break down but I think that’s what we’re trying to look into further understand these results, understand the mechanism, maybe some preclinical studies. But also what’s next type of broad application you asked or maybe more limited to, I think PARP combination, certainly direct us to our specific type of application. But as you learn more about molecular signature from this ongoing study, more data will come in, perhaps that’ll shape up our future direction strategy.