PDS Biotechnology Corporation (NASDAQ:PDSB) Q1 2023 Earnings Call Transcript

PDS Biotechnology Corporation (NASDAQ:PDSB) Q1 2023 Earnings Call Transcript May 15, 2023

PDS Biotechnology Corporation misses on earnings expectations. Reported EPS is $-0.32 EPS, expectations were $-0.31.

Operator: Hello, and welcome to the PDS Biotechnology First Quarter 2023 Earnings Conference Call and Webcast. [Operator Instructions] A question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. It’s now my pleasure to turn the call over to your host, Gabby DeGravina, Investor Relations. Please go ahead, Gabby.

Gabby DeGravina: Good morning, and welcome to PDS Biotechnology’s first quarter 2023 earnings conference call and audio webcast. On the call from the company are Dr. Frank Bedu-Addo, Chief Executive Officer; Dr. Lauren V. Wood, Chief Medical Officer; and Matt Hill, Chief Financial Officer. Earlier this morning, PDS Biotech issued a press release announcing financial results for the quarter ended May 31 — March 31, 2023. We encourage everyone to read the press release as well as PDS Biotech’s report on Form 10-Q, which will be filed with the SEC shortly. The company’s press release is available on the PDS website at pdsbiotech.com. In addition, this conference call is being webcast and will be archived on the company website for future reference.

Before we begin, we need to remind everyone that on today’s call, the company will be making forward-looking statements regarding regulatory and clinical candidate development plans as well as research activities. Certain information in this presentation may include forward-looking statements including within the meaning of Section 21E of United States Securities Exchange Act of 1934 as amended and Section 27A of the United States Securities Act of 1933 as amended, concerning PDS Biotechnology Corporation and other matters. These statements may discuss goals, intentions and expectations as to future plans, trends, events, results of operations or financial condition, or otherwise based on current beliefs of the company’s operations, as well as assumptions made by and information currently available to management.

These statements are subject to risks and uncertainties that may cause actual results to differ from those forecasted. A description of these risks can be found in PDS Biotech’s most recent filing to SEC. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this conference call. Except to the extent required by applicable law of the regulation, PDSB undertakes no obligation to update the forward-looking statements included today to reflect subsequent events or circumstances. I will now hand the call over to Frank.

Frank Bedu-Addo: Thank you, Gabby. And thank you to everyone for joining our first quarter 2023 call today. We continue to be highly optimistic about the future of PDS Biotech. Our goal as a company is to develop novel cutting-edge therapies that have the potential to significantly advance and revolutionize the treatment of cancer. We plan to commercialize our lead clinical candidate PDS0101 for first-line treatment of recurrent or metastatic HPV positive head and neck cancer. PDS0101 is a novel investigational HPV-targeted immunotherapy that stimulates a potent targeted T cell attack against HPV-positive cancers. In the randomized Phase 3 VERSATILE-003 trial, PDS0101 will be studied in combination with Merck’s anti-PD-1 therapy KEYTRUDA versus KEYTRUDA monotherapy, which is the standard of care for this indication.

We look forward to initiating the trial later this year. At ASCO next month, we plan to present updated interim results for the Phase 2 VERSATILE-002 trial of PDS0101 and KEYTRUDA, a first-line treatment for recurrent or metastatic HPV16-positive head and neck cancer. We recently announced acceptance of our abstract that will be a poster presentation summarizing the interim data from this trial at ASCO 2023. We are excited to say that it has also been selected for review and discussion during an expert head and neck cancer panel discussion. The abstracts are scheduled to be published on Thursday, May 25th. On Tuesday, June 7, at 08:00 a.m. Eastern Time, after our presentations, we plan to host a conference call to further discuss the data presented at ASCO.

Pixabay/Public Domain

We’ll issue a press release to announce the details around this event. The incidence of HPV-positive head and neck cancer continues to grow rapidly. Many of these patients are very sick and there is a lack of effective HPV-targeted therapies to address the disease. Our presentation at ASCO provides us with an opportunity to continue to share promising PDS0101 data with the clinical and scientific community, and how the PDS0101-targeted immunotherapy may allow us to address the significant unmet medical need in advanced head and neck cancer. We have made tremendous progress this past year, achieving several significant milestones as we continue to advance our oncology pipeline. To date, we have demonstrated anti-tumor activity of PDS0101 in almost 100 patients across different types of HPV-positive cancers and at various stages of the disease with consistent results across all Phase 2 trials at over 30 clinical sites.

Substantial biomarker data also highlights PDS0101’s induction of powerful tumor infiltrating HPV16-specific killer T cells. Favorable tolerability has been demonstrated in approximately 120 patients to date whether PDS0101 has been delivered as a monotherapy in combination with standard of care chemo-radiotherapy or with approved an investigational immune-oncology agents. The favorable benefit to risk profile of PDS0101 warrants confirmation of its activity in a controlled registrational trial. Now, let’s discuss the details of the VERSATILE-003 trial. During the first quarter, we announced that we completed key tech transfer, scale up and manufacturing activities required to initiate a global multi center Phase 3 registrational trial. We have also continued conversations with the European regulatory agencies and are awaiting their feedback on the VERSATILE-003 study design.

We affirm our plan to submit an investigational new drug or IND amendment to the U.S. Food and Drug Administration, or FDA, in the third quarter of 2023. The controlled Phase 3 registrational trial will randomize subjects 1:1 with PDS0101 in combination with KEYTRUDA as the active arm and with KEYTRUDA monotherapy as the comparator arm. We intend to conduct a trial at 90 to 100 clinical sites globally, and to enroll approximately 330 individuals. The primary endpoints are overall survival, or OS, and progression-free survival, or PFS. Additionally, there will be two planned interim analysis that we anticipate may provide early opportunities for discussion with the FDA regarding accelerated approval. Initiation of this trial is a significant milestone for PDS Biotech and we look forward to starting the VERSATILE-003 trial in the fourth quarter of this year.

Also on our commercialization priority list is our triple combination of PDS0101, PDS0301, our novel investigational tumor targeting IL-12 and a commercial immune checkpoint inhibitor, or ICI. This combination used in an investigational ICI has been evaluated in a Phase 2 clinical trial in all types of HPV-positive cancers, including anal, cervical, head and neck, penile, vaginal and vulvar cancers in both ICI naive and ICI refractory cancers with highly promising objective responses and survival benefit demonstrated in both. The Phase 2 results corroborated the results of the extensive published preclinical work done by the National Cancer Institute to understand and develop the combination. We announced a successful meeting with the FDA to discuss next steps for the program.

As we last reported, we plan to commercialize this combination first in ICI refractory head and neck cancer, the largest and most rapidly growing of the HPV cancer markets. To inform the design of the registrational study, we anticipate initial data from the refractory arm of the VERSATILE-002 study evaluating the combination of PDS0101 and KEYTRUDA in ICI refractory head and neck cancer during the third quarter of this year. This is the exact indication in population of patients we will be treating with the triple combination. We, therefore, believe that it is essential for us to obtain the data from the VERSATILE-002 trial before finalizing the design of the potential registrational study. We will hopefully be able to provide an update on the results and clinical design in the near future.

Last quarter, we announced our acquisition of Merck KGaA’s novel antibody conjugated IL-12, now designated PDS0301. Last month, we hosted our second key opinion leader, KOL, roundtable discussion. The discussion which focused on IL-12 included National Cancer Institute immune-oncology experts, Dr. James Gulley and Dr. Jeffrey Schlom. The discussion highlighted the potential of PDS0301 to overcome some of the current limitations of cytokine therapy. Unlike traditional IL-12, in PDS0301, IL-12 is conjugated to an antibody and utilizes the antibody to target areas of tumor necrosis. The targeting antibody brings IL-12 into the tumor and simultaneously limits IL-12’s presence in the blood. This results in the potential to enhance IL-12 safety while promoting its antitumor benefits.

By targeting the IL-12 to the tumors after a simple subcutaneous injection, as seen in the current slide, the IL-12 is able to make the tumors more visible to T cells, also termed making the tumors hot, and promoting T cell infiltration and activation within the tumor. Dr. Schlom and Gulley highlighted some of the ongoing investigator-initiated trials at the National Cancer Institute. I would like to review some of the studies that were highlighted by Dr. Schlom and Gulley during the KOL event last month. Examples of some of these promising preclinical results are shown on the current slide demonstrating, in the first plot, eradication of a lung cancer tumor that is resistant to ICI treatment using the combination of PDS0301 and the histone deacetylase, or HDAC, inhibitor inhibitor.

In the second plot, we again see the significant reduction of established radiation resistant tumors with the combination of PDS0301 and radiation. Based on these promising preclinical studies, as discussed during the KOL event, there are a number of PDS0301 National Cancer Institute investigator-initiated Phase 2 studies ongoing under PDS Biotech’s collaborative research and development agreement with the National Cancer Institute. Four of these Phase 2 studies in combination with standard of care are being performed in a number of solid tumors, including prostate, colon, gallbladder cancer, and kaposi sarcoma among others. To date, PDS0301 has been administered to over 150 patients and has been generally well tolerated even in combination with other cancer treatments.

Now, I would like to emphasize that these studies are being performed at no additional cost to PDS Biotech. That concludes my portion of the call, and I’d like to hand the call over to Matt to discuss the financial summary. Matt?

Matt Hill: Thank you, Frank. Let’s now look at our financial results for the three months ended March 31, 2023. Net loss for the three months ended March 31, 2023, was approximately $9.7 million or $0.32 per basic and diluted share, compared to a net loss of $8.5 million or $0.32 per basic and diluted share for the same period of 2022. The higher net loss this quarter was due to personnel costs, clinical studies costs and medical affairs expenses. Research and development expenses for the quarter ended March 31, 2023 increased to approximately $5.8 million compared to $5.2 million for the three months ended March 31, 2022. The increase of approximately $600,000 was primarily attributable to an increase of $200,000 in clinical studies and medical affairs, $800,000 in personnel costs and about $100,000 in professional fees, offset by a decrease of $500,000 in manufacturing costs.

General and administrative expenses for the first quarter of 2023 increased slightly to approximately $3.6 million compared to $3.3 million for the same period of 2022. The $300,000 increase was primarily attributable to an increase of $800,000 in personnel costs, which was offset by a decrease of $500,000 in professional fees. Total operating expenses for the quarter ended March 31, 2023 were approximately $9.4 million compared to a total operating expenses of approximately $8.5 million for the three months ended March 31, 2022. In April, we monetized our net operating loss carry forwards in the state of New Jersey receiving $1.4 million to the net sale of tax benefits to an unrelated profitable New Jersey Corporation pursuant to the company’s participation in the New Jersey Technology Business Tax Certificate Transfer Net Operating Loss Program for the tax year 2021.

We ended our quarter with approximately $65.2 million in cash. The cash burn was impacted as a result of the $5 million payment to Merck KGaA for the in-license of PDS0301 and our continuous prudent financial discipline and efficient execution of our ATM. I would like to reiterate that the investigator-initiated trials on PDS0301 are at no incremental cost to the company. Our cash balance will fund the company operations as well as research and development programs, we believe, into the third quarter of 2024. This completes my financial discussion. And at this time, I would like to hand the call back to the operator for the Q&A session. Operator?

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Q&A Session

Operator: Thank you. We will now be conducting a question-and-answer session. [Operator Instructions] Our first question is coming from Louise Chen from Cantor Fitzgerald. Your line is now live.

Operator: Thank you. Our next question is coming from Leland Gershell from Oppenheimer. Your line is now live.

Operator: Thank you. Next question today is coming from Kalpit Patel from B. Riley Securities. Your line is now live.

Operator: Thank you. [Operator Instructions] Our next question is coming from Robert LeBoyer from Noble Capital Markets. Your line is now live.

Operator: Thank you. Next question today is coming from James Molloy from Alliance Global Partners. Your line is now live.

Operator: Thank you. We reached the end of our question-and-answer session. I’d like to turn the floor back over for any further or closing comments.

Frank Bedu-Addo: Thank you very much. So, to all, we really appreciate you joining today’s first quarter 2023 earnings conference call. We are extremely pleased with the progress we have made this quarter. We continue to be excited about our upcoming milestones this year, especially for our lead clinical candidate, PDS0101. We look forward to continuing to update you on our progress. I wish you all a great week, and thank you very much.

Operator: Thank you. That does conclude today’s teleconference and webcast. You may disconnect your line at this time, and have a wonderful day. We thank you for your participation today.